A car is an essential property for many; after all, it serves several purposes. It helps us get to work, run errands, and go anywhere we want at any time of day. It’s also important not only to our social lives but also in helping our families in times of need.
After passing your driving test and getting your own license to drive, your next goal should be to save up for your own car. It’s a fact that everyone knows — cars are expensive, costing tens of thousands of dollars depending on the model and brand you want. Making smart financial decisions will make it a lot easier for you to finally afford your dream car.
Whether you want to buy a new car or a used one, you need to save up enough money not only for the initial down payment but also for the entire purchase price and the maintenance costs that follow. Here are some ways to help you plan the best way to buy the car you want:
Decide on the Type of Car You Want
Start by settling on the type of car you want to buy. Not only will this help you get motivated, but it will also help you determine how much exactly you’ll have to save. Ask yourself, “Why do you want a car in the first place?” Knowing the purpose of getting one will help you decide the right car for you. Do you need it to drive to school, your office, or just around the neighborhood for simpler errands? Then start with a small car. If you have children or are considering having a few in the future, settle for a bigger car.
Consider the Costs of Owning and Maintaining a Car
Your financial responsibilities concerning your car do not end once you’ve given your payment. There’s nothing more disheartening than finally getting your hands on your dream ride only to find out you can’t afford the ongoing costs.
These may include the following: vehicle registration, car insurance, occasional repairs, stamp duty, toll charges, and petrol. Also, you need funds for a set of new tires and a new car battery every three to five years, depending on how often you take your car out.
Determine a Budget and Stick to It
Now that you’ve found out how much money you need to save for your dream car, create a feasible budget and stick to it. Look over your income against your expenses and see how much you can keep for your car fund per week. It may take you one to three years to save a sufficient amount, depending on how much you make and the price of your chosen car. As it will take a few years, keep in mind that your car’s price could increase by at least 2% to 4% due to inflation by the time you’ve finally finished saving.
Finally, your decision on whether to get a new or used vehicle depends on your current financial status. If you believe you’re comfortable with your chosen financing options and the car can meet your needs, then you’ve made the right choice.