Having a car in the United States can make your life way easier. Since a lot of cities are made for car owners, it would be great to have one, since the public transport system was designed for the minority who don’t own a car. If you need one, and you want to know how to save money to buy a car (either new or used), keep reading this article so you can use some smart money-saving tactics to get one.
You can use a car to go to school, university, work or even to other areas of the city to visit friends or family
Have in mind of course, that if you use your car only for entertainment/necessity and don’t use it for a business, it will become a liability.
1. Find the type of car you want to buy
You will have to choose some aspects before knowing how much money you will have to save to buy a car. Determine if you want a used or new one, and what type you will need based on the main use you will put it, as this will also influence the price.
However, you must choose the type of vehicle taking into account the following things:
- Do you want an environmentally safe car, a compact one, or a large one like a sports utility vehicle?
- Do you want one that’s fast and has a big engine, or is fuel-efficient per mile?
- What features would you like and how important do you consider those related to security?
- Will you only use it to transport yourself from your home to school or work, and vice versa?
- Are you planning to use it to travel on the road? Maybe you need a vehicle with a lot of space to store your things there.
Knowing the answers to these questions can make it much easier to save to buy a car.
2. Choose the way you want to pay it
There are a number of ways to buy a car, such as paying for it in full, leasing it, or financing it. You will have to choose the most suitable type of payment for you before knowing the amount you will have to save.
If you have a good credit history, you can obtain a personal loan from an institution, such as a bank. An Installment Loan is another option similar to applying for a loan but offered by the seller.
Typically, you’ll have to pay a 10-20% guarantee, then make monthly payments until the rest of the amount is paid.
You can also lease the car, which means that you will make monthly payments for a specified period.
3. Choose the amount you want to spend on buying your car
After choosing the type of car you want, you must calculate how much you are willing to pay for it, either in monthly payments or saving to pay for it at once.
To do this, you will need to have a budget and measure all your expenses per month to see how much money you’re saving.
4. Calculate your current income and expenses
If you know exactly the amount of money you earn each month and the expenses you make, this will give you an exact idea of what you can do without and the time it will take to save.
Do your research on other expenses that you will have to make since you will not only have to save for the car, but also for insurance and taxes. It is also a good idea to have a little extra money for any repair, especially if you are buying a used one.
5. Start a record of your spending habits
This will give you a very clear notion of everything you buy, and it will show you everything unnecessary on what you spend. This way, you will have an idea of how much money you can save for the car if you identify these expenses.
1. Open a savings account
If you don’t have one yet, this will be a great time to open one, as you can put money into it without worrying about spending it.
Tell the bank what you are saving for, so they can help you get the most appropriate type of account for your needs
2. Designate a certain amount from your monthly salary to your savings
If you have the option of direct deposit, this process can be done automatically if you tell the compensation department to deposit part of your salary in your savings account, instead of sending everything to your checking account.
3. Get a piggy bank
Sometimes the old methods are the best.
If you have a savings account, this will be great for your paycheck, but you will also need something to put your spare change in.
You will be surprised how much you can save with the remaining change. Whenever you use cash, you should make the change and put it in your coin jar.
4. Buy only what you need
Make sure you stay focused on saving and avoid unnecessary expenses for a while or that could affect your budget for your new car.
You have to be aware that there will always be some sort of emergency, but you still need to ensure that you buy only what you need during the month if you want to buy the big stuff.
- Don’t forget the insurance costs. Many believe that insurance is more expensive for new cars, but this is not always the case, as recent models tend to provide better safety features
- Don’t choose the cheapest option either. Find something that you like and that will last for a long time.
- Save diligently, the more you save effectively, the sooner you’ll get the car.
- Beware of scams and false advertising. You can buy a car from a third party (like eBay or Craigslist), but you will need to make sure that the seller has the right to sell it and that the vehicle is as described.