Did you know that more than 55% of adults in the United States don’t have enough savings to cover a $1,000 emergency?
With concerns about inflation and difficulty building a savings account, many people struggle to buy a new car.
If you want to afford a new car and don’t have anything saved, there are a few tips to get you started.
Continue reading to discover the best strategies for saving for a car so you aren’t left with debt and bills!
1. Identify Your Needs
Writing your wants and needs for a vehicle can help when it comes to saving for a car.
After you write a list of your wants and needs, highlight the needs. This list can help you find a suitable vehicle that meets your standards but isn’t outside of your price range. It’s tempting to finance a vehicle out of budget, however, if you have your list, you’ll stay on task and get the most for your money.
When you go to a car dealership, bring your list so the sales rep can find the best matches.
2. Take a Part-Time Job
Whether you’re a student saving up for your first vehicle or have some free time on your hands, a part-time job can help.
If you put all the money you earn from working part-time toward a vehicle, you’ll be prepared to pay the fees and insurance. To avoid getting overwhelmed working 2 jobs or attending school and work, take a stress-free position. You can make money doing something you enjoy and you can start saving for your car.
Many people are working side gigs and remote positions to supplement their income and prepare for a successful future.
3. Reduce Spending
If you have a habit of stopping by the coffee shop each day, you may want to consider investing in a coffee pot.
Small expenses may not seem significant, but they can dip into your savings and prevent you from getting a new car. Cutting back on grocery bills is proving to be a challenge in 2022 but with enough budgeting and sale-searching, you can add more to your savings. If you struggle with online purchases and credit cards, you can unlink them from accounts and put the cards in a folder.
4. Consider a Used Vehicle
Researching used vs new cars in your area can help you find the most affordable options.
Used vehicles are typically checked for damage and dealerships can resell them at a discounted rate. Saving for a vehicle will take less time if the total bill is cheaper. Although it’s tempting to get a new vehicle, many used ones will feel like they are fresh off the lot.
Before you sign your paperwork, make sure you understand all of the additional fees and warranties.
5. Automate Transfers
With groceries, bills, and gas prices rising, it can be difficult to transfer money from your checking to your savings.
Instead of having money go to checking, put a portion toward your savings. When you don’t see the money in your checking account, you forget about the savings and can watch your money grow. Although it may involve an adjustment period, this is a great way to secure funds for a vehicle.
This practice will help you live below your means and save for upcoming expenses. You can discover the world by getting into this simple habit and monitoring your account.
6. Improve Your Credit Score
If your credit score is suffering, your wallet might suffer when you go to buy or finance a vehicle.
Interest rates increase the lower your credit score is. By reducing debt, paying student loans, and making timely payments, you can improve your score.
Most websites won’t make you pay for reviewing your credit score. If you have a credit card, visit the lender’s website to see if they have a credit checker. Depending on your score, you may need to spend several months or years preparing and paying back debts.
The reason your interest scores will increase with a poor credit score is that you’re seen as a higher liability. Low scores indicate risks for financial lenders who want to avoid lending to people that won’t pay them back.
7. Save More Than Necessary
When you save more money than you think is necessary, you are prepared for making a purchase.
Many hidden fees come with buying a vehicle, whether you get a new or used car. Having the extra money can cover these inevitable costs along with car detailing and maintenance needs. If you have a lot of money left over, you can keep it in an account for gas, car repairs, and oil changes.
Extended warranties are another expense you want to prepare for. You should click for Carmax extended warranty info and learn about the prices.
Saving for a Car Doesn’t Have to Take Long
It shouldn’t take decades to get a new vehicle, especially if your current one is breaking down.
If you’re saving for a car but not seeing the results you want in your account, these tips can help. Cutting back on spending habits can go a long way, but if you want to watch your account grow, you need to work and automate transfers. Your credit score can influence future interest rates and bills, so don’t forget to improve your number.
You can drive around in your new car with extra money for gas bills when you purchase with a plan.
Make sure you read our blog for more info about purchasing a car and money-saving tips to help you get one!