Driving a reliable car is imperative. It’s how you get your kids to school and yourself to work. It’s not an option for many who live in rural areas where public transportation is a school bus, and getting to work involves using your personal car as there are no other options. Unfortunately, cars lose their value quickly. They are expensive, and they can leave you in serious debt. Driving a brand-new car off the lot means instant depreciation of at least $5,000, which means you put down a large down payment or you drive off the lot further in debt than you arrived. No one appreciates debt, so it’s time to learn how to save for a new car using cash.
Calculate the Cost of A New Car
What do you want to drive? Do you have a small family or a large one? Your new vehicle must be large enough for your family to fit, so you’ll need to consider this. Now take into consideration what you can buy this car for. It’s recommended you do not purchase a brand-new car. Try one that’s slightly used or a model year old. This helps you save significantly on the price of a car since someone else already took the depreciation of this car on your behalf. It’s basically a brand-new car, but it might have a few thousand miles on it. The savings are worth it. Now you know what you can buy the car you want for after researching it, and it’s time to save.
Take A Look at the Budget
What can you afford to put away for a new car? Is there room in the budget to save $1,000 per month until you’re able to reach the desired amount of a down payment to keep your monthly payment within the budget or to pay cash for a new car? Can you afford to save only $200? Whatever you can afford to save, you need to save. Add it to the budget as an expense until you can afford your new car.
Cut Down Other Expenses
There are other expenses you can cut down if you take the time. Do you need to pay $150 per month to your cable company when you really watch Netflix and spend time watching your favorite shows live on the internet? You don’t. Call the cable company and cancel that plan. Can you lower your cell phone bill by choosing a smaller plan? Can you lower your credit card payments by asking for a lower interest rate? Call everyone on your list of expenses each month and ask for a lower package or switch to a new company that offers a smaller payment.
Take all the savings from these efforts and apply them to your new car fund. You’ll be surprised what you can accomplish in terms of savings by simply asking for a discount. It’s easier than you might expect, and it’s always beneficial to your finances.
Apply Unexpected Funds to Savings
Do you receive a tax refund? Use it for your new car. Did someone leave you a bit of money? Use it for a new car. Any money that’s not expected each month should be applied to your new car. If you’re someone who works for an hourly rate rather than salary, take each additional amount of overtime pay and apply it to a new car.
Don’t Settle for A Car
Now that you have the funds to shop, do it. Don’t buy the first car you see. Negotiate, walk away, and wait for someone to call you back with a deal. You know what you want, what you can afford, and you won’t deviate from that. As long as your requests are reasonable, there isn’t a car dealer who isn’t willing to work with you to make a sale and increase their commission. It’s simple, and you can save money on a new car by negotiating, which is another way of saving money for a new car.
Driving a reliable car is important, but it’s not something that has to be unaffordable. You can make sure your car is paid for in cash or your monthly payment is within your budget by using these savings methods when it’s time to purchase a new car. Don’t let yourself fall into the trap of accumulating excessive debt just for a new car.