Tips to Help You Save Up for a New Car
When your family needs a new car, you probably do not just have the necessary money lying around, so you need to save up for it. There are some ways that will help to make saving up a little easier. Make sure that you also take into account any down payment you might need for the auto insurance policy for your vehicle. This is important because when you finance a car, it is required that you carry full coverage insurance on it.
Saving for Auto Insurance
You can help to determine what the down payment for your auto insurance might be by getting a quote. Start with your current insurance company since adding on a vehicle to an existing policy is often cheaper than just starting a new one. Then, you can do from there to get other quotes to see where you are going to get the best rates for the most comprehensive policy.
Estimate the Down Payment Cost
You want to have a number in mind as your savings goal, so you should start with estimating what your down payment is going to be. If your credit is decent, the average is approximately 20 percent of the total cost of the vehicle. For example, if you are looking to buy a car that costs $10,000, you will need approximately $2,000 as your down payment. If your credit is not great, you might need a little more, so make sure that you keep this in mind. You can talk to the dealership too to aid you in getting an approximate figure.
Consider Your Current Income and Expenses
You want to do this for two reasons. First, you want to know how much you are able to comfortably put back for your down payment. Secondly, you have to make sure that you are able to afford the monthly car payments. When you are considering the monthly payment, you also have to account for any monthly maintenance and gas too so that you are able to keep your new car in good condition.
Earn Some Extra Money
When you are working on saving up for a down payment, taking the time to earn a little extra money can be very helpful. You only need to do this temporarily while you are working on getting your down payment together. For example, you might consider selling items you no longer use or you can pick up some freelance work for a short-term second job. Once you have the down payment saved up, you can go back to your usual schedule as long as your normal income can accommodate your monthly vehicle expenses.
Go With the Basics
When you are actually looking at the vehicles that you are interested, keep it simple. You can always add some cool additional features in the future. When you go with a basic model, the vehicle is going to be less expensive. The cheaper the vehicle that you choose, the less money you are going to need for a down payment. You might also consider a pre-owned vehicle compared to one that is completely brand new because this too can save you a lot of money overall and with your down payment.
You can adapt these tips so that they best work for your family and your specific needs. The key is to be diligent and persistent and before you know it, you will have enough money put back for a decent down payment. You can start shopping around while you save so that you can begin to narrow down your choices and so that you will have a better idea about how much of a down payment you are going to need.