Cars are continuously evolving with brand-new models. Newer models are more efficient and technologically suave than previous models.
This being the case, it is perfectly normal for people to want a new car after some time to replace their old one. There may be a difference, however, in what we want and what is realistically affordable.
Saving for a new car is always a good idea, even if replacing your existing car is a few years down the track.
Below are some great tips for affording a new car:
Price of the car
Before you start saving, you should know how much the car costs and how much you are willing to pay. Some people prefer paying for the car in full. They have saved up enough money to do that and are happy to part with the money in one lump sum.
Others prefer monthly payments. If this is the case, know how much the car is worth and if you can afford the monthly payments as well as the down payment.
If you only come up with a portion of what you need, you may want to seek out an affordable car loan to add to the amount you already have so you can purchase the car you want.
When it comes to the time frame, it should be both realistic and attainable. Your time frame should give you space and ability to continue living as you are, whilst putting a little aside for the purchase of a new car.
While it is common for time frames to range depending on one’s ability to save and afford a car, your time frame should also be realistic. No point saving for ten years for a car that you may no longer be interested in.
Opening a savings account
If you are serious about getting a new car, then opening a separate savings account should be a priority. With this account set, you will be able to save regularly and have a clear goal for what this account is for.
You can set aside a regular amount to go into this account, so you are budgeting well and keeping all your finances in order.
Look for a side job
Since you are planning on saving, a side job will help immensely in contributing to the income you make. While it may be a bit tiresome on your part, especially if you work from 9 am to 5 pm, it will help considerably when it comes to reaching weekly or monthly targets.
A side job also minimises the time frame significantly as you now have two incomes contributing to the new car project. It may be you can make a little extra money from home by selling unwanted goods on eBay, Gumtree or the like.
Limit your spending
While saving money to buy a car, some unnecessary spending should be avoided at all costs. This might be challenging for some people, but it is extremely necessary, especially if you are looking to buy your car as soon as possible.
Most of your money should be redirected to save for the new car. Avoid temporary wants for the time being.
Cars come with other expenses that you as an individual should be ready to handle. Consider the cost of insurance. This will vary depending on the model of the car you choose.
Weigh up the pros and cons of buying a used car and a new car. Consider what is the better deal financially.
The efficiency of the car will have an impact on fuel costs. Diesel or petrol is another consideration.
Sell your old car
If you are saving to buy a new car, why not trade in the old one and use the money for the purchase of your new car.