How To Save Money For A Car

How To Save Money For A Car

14th Jan 2021

Buying a car is a big financial decision. Even if you’re leasing a vehicle, you need to have enough money to cover the down payment, monthly payments and regular maintenance. The more you can save in advance, the better your finances should be in the long run.

Try these tips to learn how to save for a car.

How Much Should I Save for a Car?

The amount you’re able to save before you buy a car depends on several factors, such as the cost of the vehicle and overall budget. Lenders usually want a percentage of the sale price as a down payment. For instance, putting down 10-20% on a $20,000 car is $2,000 to $4,000.

Keep in mind that any money you owe after the down payment (in this example, $16,000 to $18,000) will affect your monthly payment. If your budget is stretched thin in order to cover those monthly costs, you may need to save more on the front end in order submit a higher down payment.

Shopping at a buy here pay here could help with not having to shell out a huge down payment. Ask about our deferred down payment program and how you can get approved and driving for as little as $0 down!

Best Way to Save Money for a Car

Saving money can be hard for a lot of people. To be effective, it should become a habit — not a one-time deal. Follow these steps to create a savings fund that you can use to buy a car.

1. Open a Savings Account

Rather than stuffing cash into a jar to save for the big day, start by setting up a savings account. A bank or credit union may offer a small amount of interest on the money you save, which helps it grow over time. Before opening the account, be sure to ask about any monthly fees you might have to pay.

2. Set a Budget

Once you have a place to put those savings, figure out how much you can afford to set aside. At first, it might seem as though you can only save pennies. However, take a serious look at your spending and see if there are ways you can cut back. For example, preparing meals on your days off could help save money on takeout. If you need to make big changes, try to do it gradually. It’s easier to cut your spending by 5-10% at a time.

3. Make Saving Effortless

Many people struggle to save money because they don’t remember it until the money is already spent. You can avoid this by making the savings automatic. If you have direct deposit, you may be able to put a portion of each paycheck into a savings account automatically. Otherwise, see if you can set up an automatic monthly or bi-weekly transfer from your checking account. That way, you’ll be less likely to spend the money without thinking.

Saving for a car is easier when you know how to get the most bang for your buck. With these tips and buy here pay here financing from JDBNOW, you can prepare to make a wise financial decision.