Growing a cash stash to buy a car is a lot easier when you follow our seven simple saving strategies.
Buying a car is super exciting, but it can also be a bit nerve-wracking. After all, it’s a major purchase, and not one you’re likely to make very often.
The good news is that no matter whether you’re buying your first or fifth car, the same tips for saving apply!
Saving is never as much fun as spending... but when it comes to buying a car, there are plenty of incentives to grow a honeypot of cash.
Even if you can’t save the full purchase price of that soon-to-be-your's car, it’s still worth growing a deposit. It’s money you can use as a down payment to secure the car of your dreams if you’re buying from a dealer or private seller.
Plus, the more you have in savings, the less you need to borrow. That means a smaller loan, which helps you save on interest charges.
Saving can be a lot easier when you have a goal to work towards, but it’s not just about setting a target figure. Knowing the sort of car you plan to buy can help you visualise yourself behind the wheel. It can be a great motivator to stay on track with your savings.
To select your ideal car, shop around to see what you can afford. Take a few test drives to be sure it’s the right make and model for you. Then, when you have a car in mind, shop around to compare prices. This will give you a savings goal to aim for.
The purchase price of the car may not be the only cost to plan for.
You may also have to allow for the cost of stamp duty. This is a state or territory government tax payable when the car is transferred into your own name. If you’re buying from a dealer, ask if stamp duty is included in the ‘on-road costs’ – it should be. If you buy privately, you’ll have to cover the cost of duty yourself.
Either way, stamp duty is based on the cost of the car, so it’s a good incentive to haggle for a better deal.
Don’t forget insurance too. You should have comprehensive cover in place before you head out on the open road. Now’s the time to compare the cost of cover with different insurers, so you’ll be ready to go with a good deal when you buy your car.
Check out our comprehensive guide to the costs of running a car here.
The trick to saving for a car is to set a realistic amount that you can regularly tuck away without too much financial squeeze. Aim too high, and you could become discouraged and throw in the towel. Aim too low, and it’s going to take longer to reach your goal.
A personal budget is one of the best tools you can use to know how much you can realistically save.
A budget shows how much money is coming in, and how much is going out in living expenses and other costs. The difference between the two – income and outgoings – shows how much you can save.
Apps make it easy to draw up a budget. Check out free budgeting apps like Pocketbook or MoneyBrilliant to get started.
The beauty of a budget is that it also lets you see where you can cut back spending – without too much scrimping, to fast-track your savings. A few sacrifices can make a big difference. Try skipping the Friday night takeout for a while, bring work lunches from home, and make a habit of thinking if you really need impulse buys.
Put your savings on autopilot by setting up a regular transfer of funds out of your everyday account, and into a high-interest savings account. Time the transfer for paydays to be sure the money is in your account. Then sit back, relax and watch your savings grow. Easy.
You may have a date in mind for when you’d like to buy a car. If not, set one. Creating a deadline lets you crunch the numbers to know how much you have to save each payday to meet your savings target.
Your bank’s website is sure to have an online savings calculator. It can show how long it will take to reach your savings goal based on your regular deposits. It’s also a chance to play around with the numbers to find the savings plan that works for you.
If you already own a car, it can be sold or traded in when you buy your next car. You’ll almost certainly get a better price by selling privately. The main point is the value of your existing car can count towards your savings target, helping you reach your goal sooner.
Paying for a car with cash savings has a lot going for it. The downside is that saving takes time. That’s more money spent on public transport and more inconvenience.
If you want (or need) a car sooner rather than later, it’s time to think about other ways to pay. A car loan is a straightforward option with the benefit of clear repayments, and a fixed term.
A Nimble Secured Car Loan can put you behind the wheel of your new car in hours. Not years. It’s the fast way to get into a car of your own – and hang onto your savings for other goals.