Is it time for a new car? Is your car on its last wheels, or are you buying a car for the first time? The financial crisis temporarily put a damper on millennials’ ability to purchase things like new cars and houses. Young people were building massive student loan debt to come out into a job market with no available jobs and this meant the number of millennials buying new cars was down. However, things might be looking up in that department, at least according to many recent stats and figures.
If you’re planning to buy a new car, it can help to have a plan. Know how much you’re trying to save (for the entire car or for a down payment on a newer car) and also when you need to have the money. Be as specific as possible with your savings goals. Know what you’re working toward and it will help you get there. In addition, here are four more tips to help you.
Here are four tips to help you save for a new car:
- Determine what type vehicle you want and when you plan to make your purchase. This will give you an idea of how much money you’ll need and how long you have to save it. Use this information to determine how much you need to save each payday in order to have the money available when you’re ready.
- Reduce your expenses anyway you can. Start by downgrading your cable package and cut back on your utility bills. Start paying off any extra debts you have and put that money into savings each month. You can also reduce your daily spending to increase the amount of money you can save each payday.
- Open a savings account specifically for your new car. Have all of the money that you want to save for the car sent directly to the savings account each payday. This way, it’s separated from the rest of your money so you’re not tempted to spend it instead of save it.
- Keep your old car in good running shape. By servicing your current car and keeping it in good running condition, you’ll save money on maintenance costs and you won’t be pushed to buy a new one. It will also help you get more for your current vehicle if you plan to use it as a trade-in, reducing the cost of your new car even more.
Use the tips above to help you save money for a new car but don’t get discouraged if you determine you won’t have the full amount by the time you’re ready to make that purchase. By putting down a sizeable amount of money for the down payment, you’ll save money in the long run because you won’t have to borrow as much to buy the car. It will also lower your interest rates and make paying the loan off easier and quicker.
Do you have any tips you’d add to our list?