Getting a car can be one of the biggest purchases you will make. For many people, having a car is a necessity to their daily life and it’s important that you make the right decision. Whether you’re purchasing a new or used car, it can be hard to save up to buy a car outright. Whether your savings goal is to fund the full cost of your next car or put a good deposit down for car finance, there are ways in which you can help to maximize your savings goal. Let’s take a look at the ways to save for your next car.
When it comes to saving money, budget is everything. You should first start with your savings goal and then work backwards. It’s recommended that you take into account your income and monthly outgoings to help determine how much you can put aside to reach your goal. You can then calculate how many monthly it would take to reach your goal. If it’s taking longer than expected, you could consider cutting some of your outgoings such as cancelling a gym membership you don’t use or skipping that morning coffee you buy before work.
Open a savings account
To avoid the temptation of spending the money you are saving up, it can be a good idea to open a dedicated savings account. There are a number of savings accounts you can choose from so its best you do your research first. You may be suited to some savings account more than other dependent on your budget. Easy access saving account can be good if you want more flexibility and access to your money when you need it. Some banks also have ‘pots’ that you can use to put money in, set a savings goal and even put a lock on so you can’t deposit money out.
Increase your income
If you really want to maximise your savings, you could consider taking on a second job or additional income. If you’re looking to get a car on finance, it is actually possible to get car finance on benefits, but you may find interest rates to be higher and its harder to get accepted. There are a number of ways you can make additional income such as completing surveys, selling your old stuff, start a blog, get a Saturday job or by using cashback websites. Always remember that you shouldn’t sell yourself short though and make yourself unhappy in the process. Even if you want to hit your savings goal fast, you still have a life to live!
Part exchange your car
If you already have a car, you can use the value of it to help offset the cost of your next car/ This is more commonly known as part exchanging your car and can be really beneficial. When you part exchange your car, dealers will give you a valuation price of your car and take off any additional fees. They can then use this amount as a deposit for your next car. It also means you don’t have to spend time finding a buyer for your car and you can just drop it off when you pick up your new one. Dealers do factor in additional costs such as cleaning your car ready for selling so you could get a better deal if you sell privately.
Work on your credit score
If you’re saving for a car finance deposit, it can also help to increase your credit score too. A better credit score can make it easier to get accepted for finance and lower your interest rate offered. People with good credit scores usually have a good track record of making payments on time so they are seen as less of a risk to lenders. You can start to increase your credit score by reducing any existing debt you owe, making your current payment son time and in full, keeping credit applications to a minimum and not taking on any more new credit.