Just like owning a home is exciting, so does acquiring a car. The excitement is beyond words. However, you need an excellent strategy to save up for you to be able to buy one. Saving up reduces the amount of money you need to borrow.
Before purchasing your car, you need your finances right. Even after you buy the vehicle, you will need some savings for unexpected expenses.
Do you want to buy a car? Below are some compiled tips to help you own that car you’ve wanted for the longest time.
Weigh your options
There are several ways you can pay for a car. You can opt for a specific auto dealer’s financing option. Two, you can get an auto loan from specific lenders who offer such options. You can also go for the hire purchase option. Leasing is also an option instead of fully owning the car. Lastly, you can pay the car’s full amount in cash, with your own savings.
Decide what would work for you without financially straining you or making you go into debt.
Buying in cash or not?
The question you need to ask yourself is, “Can I pay the amount in full?” If the intention is to pay in cash, you need to save up for the whole amount. However, if you are looking for auto financing, you can save up for the down payment. The idea is, whatever option you choose, save up for a large down payment so that you ease up your monthly payments.
If you go with the auto financing option, calculate how much you can afford per month. You can look up an auto loan calculator and you can key in your budget and get all the details. Leave room for the usual car expenses such as oil and gas.
The timespan for buying the car
Once you’ve decided what option you’ll go with, you need to know the ‘when.’ If you plan to buy a car in two months, how do you plan to make changes for you to accommodate the plan?
By now, you should have come up with a budget. Know how much you are willing to spend on a car. If you go for auto financing, get a lender who offers great rates. Sometimes, the excitement of getting a new car may get over our heads, and we end up getting ridiculously high payment rates. At this point, later in life, you find a better lender with better rates, and you feel the need to refinance. You can get a list of auto refinance loans at Crediful.com to make better decisions.
Be realistic when setting a timeframe. You don’t expect to be earning about $3,000 and want to purchase a car that costs $20,000 in three weeks. Choose an affordable vehicle that won’t be a headache when it comes to paying for it.
Check your spending habits
Buying a car needs discipline. If the plan is to buy a car in four months, you need to get a hold of your spending habits. Analyze how much you spend in a month and remove any unnecessary items from your list.
You may eat out three times a week; change that to once a week. If you buy new designer clothes every month, pause the habit until you buy the car. Saving should be a culture. Teach yourself the discipline to only spend on the necessary things.
Saving for your car should be pretty serious. It can be as severe as automating payments. Have a savings account that’s specifically designed for the vehicle. Set automatic payments every two weeks or monthly.
Also, you need to have a savings schedule. You could save every week or every fortnight. The idea is having a saving schedule which you will strictly stick to it. Sacrifices have to be made for the car purchase to become a reality.
If you get an extra change of as small as $2, keep directing them to your car account. With time, you notice a huge difference, and you’ll be surprised at how much you can save with that change you get at the grocery store.
Shop around for your ideal car
Get online and start searching for your perfect vehicle. Since you already know what you want, the point is actually to look for the best car deals. Keep looking as you could get better financing options than you already knew.
Physically go to dealership shops to see the car you are saving up for. Have a feel of it and do a test drive. This will help you maintain the saving discipline and not get tempted to spend on other unnecessary things.
Saving for a car should be exciting because the end goal is you driving your newly acquired car. Follow the tips above and get to own a car. Remember that you need a car you can afford. Good saving for your dream car!