Getting the money saved up for your first car can seem like a daunting task, especially when you have to pay thousands of dollars for a car. Let's say that you just got your first license.
You want to buy your first car. How on earth can you save up enough when you only earn minimum wage.
Don't worry; we will show you some expert tips and tricks that you can use to save up money.
Get a Goal Prepared
First, you will have to prepare a goal. You should plan to save around 20 percent on your first vehicle. This is how much you will have to pay on a down payment.
Let's say that you will buy a car that costs around $30,000. At 20 percent down payment, you will have to save an estimated $6,000 before you can finance a vehicle.
Another aspect that you need to consider when you go to fund a new car is that you will also have to pay taxes on it. You will also have to come up with the dealership fees, which can quickly approach the cost of an extra $1,000.
Used: The Better Option
Especially for a first-time driver, it can make sense to take this route. New cars depreciate fast after you have driven them off the lot.
They lose an estimated 10 percent of the value within the first year.
You can avoid this by buying one of the used vehicles. How much money you can save will depend on the year, make and model.
The one thing that you have to consider with these vehicles is that you don't receive as good of a warranty.
Also, you will still have to pay taxes, fees, emission fees, and compliance fees.
However, it tends to be more affordable, which is one of the reasons that people have chosen to finance a used vehicle rather than spring for a new automobile.
Lower How Much You Spend
You will never reach a goal of saving money for a vehicle if you always spend your money. To get anywhere, you will first have to lower your amount of spending.
Instead of going out to the restaurants, make your meal at home.
Some of the other novel ways that you can save money for your first car include:
- Use coupons at the store.
- Pick up an extra side job.
- Open a bank account that gives you the most interest.
- Sign up for a rewards program on your credit card.
When it comes to saving money, you have a variety of different methods that you can use to save money.
The best way to save money is to take the time to figure out what will work best for you. For shopping, take the time to identify the one that will save you the most money.
Choose the Right Car Loan
Getting a car loan can help you to buy a newer vehicle for a fraction of the cost. You should, however, take the time to identify the right loan for the job because some loans won't give you the best rate on interest.
Another thing that you may want to keep in mind when you go to apply for an auto loan is that the more you pay upfront, the less that you will have to pay in interest later. You have the choice between a secured and an unsecured loan.
Typically, you will want to go for a secured loan because it will cost you less in interest.
With an unsecured auto loan, these are typically intended for people with poor credit, and the interest rates can be higher.
The one thing is that you typically can only get a secured loan with the newer vehicles.
If you have to make a lump sum payment of the auto loan at some point during the loan, you should negotiate for this in advance so that you pay as little as possible.
Valley Auto Loans is one of the companies that you can use to help you with this.
Design a Budget and Stick to It
The only way that you will ever be able to put enough money together for your first car is through saving for it.
You will have to take the time to design a budget that works for you and stick to it. In general, when we have seen budgets that work the best, what we found was that the people who had the easiest time sticking to budget kept a realistic one.
This means that you don't want to set a budget where you will have to have ridiculous amounts of willpower because it will be much harder for you to stick with it.
Let's say that you want to save up $6,000 over the course of a couple of years. To accomplish this goal, you will have to save around $60 every single week. This adds up to $250 per month.
If you plan to take out a car loan, this is one of the faster ways that you can reach your goal. You will need to save a minimum of 20 percent.
You have a couple of different ways that you can motivate yourself to continue saving.
For example, you can post some pictures of the car that you plan to buy. In addition, if you have a savings account, you can check on this every once in a while to watch the money accumulate in your savings.
You will feel a rewarding and pleasurable experience as you watch it grow.
Negotiate on the Price of the Vehicle
What a lot of people don't realize when they show up to the car lot is that they can negotiate with the dealership on the price of the car.
You have a couple of different tactics that you can use to lower the price of the vehicle. Tell them that you will sign the paperwork as soon as they hit your target number.
This puts a little bit of subtle pressure on them to agree to a figure of your own.
The dealerships want your business, but they will do whatever they can to get the most money from the deal as possible, which is why it helps to know some negotiation tactics.
It can help you because then you don't have to save quite as much money. You can politely decline any counteroffers that they have made.
If they refuse to give you a better deal, give them your phone number and wait.
Sometimes, they will call you later agreeing to your price. If not, perhaps you can find a better deal.
You can also show up closer to closing time on a Saturday or Sunday night, which will put the pressure on them to give you a better deal on your next vehicle.
Keep a Good Credit Score
If you're younger, it may be harder because you don't have credit, but if you're older and you just got your license, keeping a good credit score can help you with buying your first car because you can get a more favorable loan rate.
People who have a poor credit history normally have to pay a little more for a loan, and they can even sometimes have a harder time finding a loan. This is why it is essential that you take your time getting an auto loan.
In addition, the dealerships will often be more willing to work with you because they say that you have a good history of paying, which can also win you a better deal on your first vehicle.
Calculate How Much You Need in Advance
In calculating how much you will need ahead of time, you can keep yourself on track because you have a clear target for how much money you need.
You can set a target up in advance for how much money you will need.
In addition, you can also use an auto loan calculator to find the loan terms as well as the sales tax. This helps you to figure out what you want to pay for a vehicle.
Get a Side Job
We mentioned this earlier in the article, but we truly believe in the value of picking up a side job because you can get an extra income coming to you that can help you to save money for your next vehicle. Some of the potential side jobs that we have found include:
- Driving for uber
- Freelance writer
- Web designer
- Selling your stuff on eBay
- Doing small gigs on Fiverr
- Virtual assistant
- Food delivery driver
The most important thing when it comes to saving for your first car comes down to not spending and putting the money in the savings account. You can save a lot of money in this way so that you can put money down on a car.
In some cases, you might be better off going with an auto loan for bad credit and putting 20 percent down on the vehicle because you don't have to save for as long in this way. You can get your first vehicle much sooner.