5 Easy Steps Steps to Saving For a New Car
Buying a car is thrilling, but expensive. With average prices coming in at over $31,000, combined with insurance costs, registration fees, sales tax, and finance charges if you can’t save up and pay cash for a car, you’re looking at a big dent in your wallet.
It helps to have a plan in place before you set out to buy a new car. It also helps if you’re disciplined but that’s a whole other story. Here’s how to get started.
1. Calculate your desired car payment
If you can’t pay in full and don’t mind a car payment, start by calculating how much you can afford each month for a new vehicle. This means you need to pull your financial records and get a good look at how much you spend vs. how much you make every month. Leave some wiggle room for maintenance, like oil changes or new tires.
2. Calculate The Down payment
The internet is a great thing. It helps you figure out how much you need to put down at the time of purchase for that new car. Cars.com has a great online calculator Spend a few minutes testing out different down payments and payments terms. You can get a general idea of how that affects your monthly expenses, and how much you can likely afford.
3. Decide when you want or need a car
Once you have a good idea of how much you can afford, including down payments and monthly loan installments, you’ll want to factor in timing. If you need something now to replace your older, unreliable car, then you’ll have less time saving up the cash. The key? Don’t be unrealistic and don’t be impatient. Delaying your purchases for a few months, even if it means you take the bus,will make a nice, cushiony difference on your finances.
4. Make savings mandatory
Sticking to a plan and actually putting money aside is the hard part. Who wants to save when you can spend your money on Friday night beers. Rather than debating every purchase you make, simply set up an automatic direct deposit into your savings account. That way, you remove temptation and increase your savings. Everyone wins! Except for the guys on Friday beer nights.