SO you want to purchase a new car and you are thinking of the best strategy to implement savings-wise.
Saving for a car can either be simple or difficult depending on how you go about it. It should be stated that the time it takes you to reach your goal is dependent on your income and the expenses you currently incur.
This article is going to provide you with effective and practical tips you can implement in saving for that car of your choice.
Figure out your down payment
From the price of the car you want to purchase, figure out how much you should deposit for your down payment and begin to save towards it. For a used vehicle, it is advisable to put a down payment of 10% and for a new vehicle, 20% is more ideal.
Having your down payment ready significantly reduces the financial tedium of buying a car because it puts you a step ahead and reduces how much you may need to borrow. Saving it may not be the easiest thing to do, given that you may already have responsibilities that may hinder you from doing so effectively but it is definitely worth it.
Plan for car-related expenses
One thing some people tend to be unaware of is the need to budget for the expenses that come with buying a car. All you may have in your mind is the image of the Mercedes CLS for sale sign that may have prompted you to desire a new car.
Car insurance, spare parts and other car-related expenses should be detailed and given a budget of their own. This way, you can include them in your budget while saving for your car. This would ensure that you are not caught unawares by expenses you didn’t plan for.
Implement automated savings
A great way to save for your down payment and other car-related expenses is through automated savings. You can set this up with your bank and there are a few internet applications that also offer this service.
Decide on how much you can realistically put aside each month and whenever your monthly salary comes in, it should be automatically deducted from your account and inaccessible to you until you reach your goal or till a stipulated date.
Put your current car up for sale
If you currently have a car, a god way to fast-track getting a new one is by selling it or trading it in for a newer one. Selling your car by yourself may not be the easiest thing to do but there are online platforms that you can utilise to make the process easier.
If you do not want to go through the hassle and your car is in good enough shape, you can trade it in and supplement it with your savings to get your desired one.
The tips should be helpful but remember to tailor them to your lifestyle. Creating unrealistic saving goals can be detrimental so make sure that you factor in your day to day expenses when crafting a savings plan. For more tips and information on car purchases, visit Sandown today.