Purchasing a new vehicle is a big expense that may take some time and careful consideration to pull off. Whether you’re buying a used car or a brand new car, it’s certainly no secret that car prices have seen a significant increase in the past few years. The ever changing market means that the car buying process can be unpredictable, so here’s everything you need to know when it comes to saving money when buying a new car.
Decide How Much Money To Save
First and foremost, you need to decide how much money you need to save for your future purchase, and this will depend on a number of key factors such as:
- What type of car are you hoping to buy?
- Do you want to buy the car outright or take out a car loan?
- What is a realistic timeframe for purchasing your car?
These are the three key questions you’ll need to answer in order to come up with a reasonable figure for your savings goal.
For example, if your current car is completely written off and you need to buy a car now, you probably need a quick and simple method to save for a downpayment for a car leasing option.
On the other hand, if you’re looking to upgrade your vehicle in the next couple of years and hoping to buy a used car outright, you have a longer timeline to work with.
With all of these considerations in mind, you can then plan your finances in line with these goals.
Consider Maintenance Costs Too
Once you have purchased or leased your car, the expenses don’t stop there. Within your financial plan you need to consider the recurring maintenance costs and make sure you’ve budgeted for them too. Some of the main ongoing expenses for your vehicle include:
- Annual car services
- Fuel or electric charging costs
- Insurance payments (monthly or annual)
- Unexpected repairs and general maintenance charges
Reserving some of your budget to ensure you have some leeway to cover these ongoing costs for the months and years ahead will help you to take care of your car. Maintenance and proper servicing for your vehicle may be an expense, but it’s the best way to increase the lifespan of your car and keep it up and running for longer.
Start Saving: The Checklist
Here is your go-to checklist to help you save money when buying a new car:
Decide On Your Budget
Your monthly budget will take into account your current income and regular outgoings, which will provide you with an in depth overview of your finances. This will then help you to work out how much money you can afford to put aside each month to save towards your new vehicle. Once you have drawn up your budgeting plan you should try and stick to it as closely as possible!
Reduce Unnecessary Expenses
When you create your chosen budgeting plan it may highlight some expenses and outgoings that aren’t entirely necessary. This money could be added to your savings pot, so you may have to forfeit a few luxuries until you can afford your new vehicle. This could include canceling television subscriptions, making packed lunches to take to work and reducing your mobile phone tariff.
Consider Side Hustles
If your current monthly income isn’t quite cutting it, why not consider a long-term or temporary side hustle to help you build some savings? You can use your skills and experience to make money and create a small business to contribute to your regular income.
Sell Your Old Car
If you’re currently in possession of any cars or vehicles currently, now is your opportunity to sell them and use this money towards your new one. Selling a bicycle, an old car or even unwanted furniture and clothing in your home can help you to grow your savings and meet your financial goals.
Reduce Maintenance Costs
Saving on the maintenance costs of your car will help you to reduce your monthly expenses so that you always have some savings to fall back on. A well maintained car is going to cost you less money in the long run, so it’s important to book your car in for a regular service, replace the oil regularly, use the correct tires, and fill your car with the correct type of fuel too.
Try To Get a Discount If Possible
When you’re looking to buy a car, you should always be on the lookout for discounts and deals. Although you may not be able to find a super affordable deal for your vehicle type, here are a few top tips to keep an eye out for.
- Buy your car during the holiday season
Car dealerships can’t resist a discount during the festive months such as Christmas, Thanksgiving and Valentine’s Day. This is because consumers are raring and ready to spend their money so a good discount will help over the line.
- Visit a Variety of Dealerships
At any given time different car dealers will offer certain deals to entice their customers. Make sure you visit a wide range of dealerships so that you can compare and contrast the prices for each of them.
- Check Out Manufacturer’s Websites
Look around and read the manufacturer’s websites directly as there may be certain loyalty schemes that will help you to buy your next car.
Final Considerations
The ease of buying a car will vary depending on your budget, your current financial situation and the type of car you’re hoping to purchase. As soon as you have saved enough money for a downpayment, you can look into viable car loans and leases so that you can get a newer and more reliable car. On the other hand, you may want to put a rigorous savings plan in place so that you can save up to buy a car outright. From this point, you may want to look into methods to reduce maintenance costs so that you can run your car in the cheapest way possible.
All in all, you can save money when buying a new car using a variety of different methods, so consider the best options for you!
