Although saving money sounds obvious, it’s an essential factor in paying cash for a vehicle. Generally speaking, you’ll have to determine how much money you can save for this, how often you may save it, and, of course, when you’ll have enough for your desired car.
You should also research the selected vehicle before you start saving. It will give you a better idea of how much you require to save and, ultimately, help you set and achieve your goal.
Learning some negotiating skills is also crucial in getting a good car deal. How you’ll approach this will rely on if you’re purchasing from a car dealership or a private seller.
If you’re looking to save and buy a car with cash, this information will help you achieve this goal.
Calculating What Kind of Car You’ll Need
Before you can determine how much money you will have to save up for the car, you need to decide on a few things. Find out if you want a used or brand new car and what type of car you want depending on what you will primarily use it for because that will also affect the cost.
You could either decide on the precise make and model immediately or leave those details for later since you might change your mind. But, in general, you should pick the type by asking yourself these questions:
- Do you want an eco-friendly vehicle, a bit more compact, or something bigger like an SUV?
- What are some of your appealing features, and how vital are safety features?
- Do you want a vehicle that is fast with a large engine or receives excellent gas mileage?
- Are you just commuting to school or work? Are you looking to take road trips? Perhaps you want a car that has a lot of space to carry things around in.
Finding the answers to these questions should make saving up for your vehicle much more manageable.
Determine How Much You Need to Spend
If you already know what kind of vehicle you want, then it is time to determine how much money you will feel comfortable spending on the car. This is regardless if you are making monthly payments or looking to save up to purchase the vehicle in one lump sum.
Determine Your Current Income and Expenses
If you know exactly how much you make per month and the amount you spend, you will have a better idea of what you can live without and the duration it would take you to save. You can find many online tools, which should help you find out how much you are working with.
I personally recommend You Need a Budget. It’s an excellent option for building a budget and keeping track of where every dollar goes.
You should also research other finances you will require. Don’t forget that you’re not only saving up for the car, but you’re also saving up for the tax and insurance.
It would also be prudent to leave behind some cash for repairs, especially if you are purchasing used.
Besides, you could keep a log of your spending habits – this is an important step. Whether you use an app on your smartphone or computer, or simply a notebook, list everything you purchase and spend on, including bills, clothes, and food.
It will give you a better idea of everything you are buying and show you what you are spending on that you don’t require. Perhaps you go out to eat a few times a week. In the end, you will quickly have an idea of the amount you can save for the vehicle once you identify what the unnecessary expenses are.
Create a Savings Schedule
Since you already know your actual income versus your expenses and when you want the vehicle, you should develop a schedule to help you start saving immediately.
Shopping Around for Your Ideal Car
Generally, this part is a little less about saving for a vehicle and more about helping you save. Regardless of what type of car you want and the amount you require to save, it would help keep tabs on deals from various dealerships and figure out your suitable financing options.
You could also check out the vehicle in person. It will make it more tangible and provide you with the motivation to remain diligent in your saving.
Take the car for a test drive and experience how it feels. It will help you decide if this is undoubtedly the car for you and avoid unnecessary spending.
Take Advantage of Dealerships
Find a few dealers around town who provide the exact make and model you want and ask for a quote. Tell them the truth that you are shopping around, and you have been consulting other dealers to get the right price.
Since dealers need to sell their vehicles, they can find a fair quote once they realize there is competition.
Remember, you shouldn’t allow a lower quote to affect your savings plan. Although you may find a cheaper deal on your desired car, that does not mean you should save less.
On the contrary, any additional money you save will ensure a smooth transition. With some extra cash, you can make a larger down payment. Ready you for any possible repairs, or buy you the first few tanks of gas.
Utilize Online Tools in Saving and Researching
In general, there are numerous ways to calculate expenses and knowing your ideal options. Some sites offer lots of other useful tips to ensure that you obtain the fantastic vehicle you deserve after you have done all the tedious work of saving.
Learn How to Negotiate
One big step to saving even more cash during your car buying journey is learning how to negotiate well and obtain the best bang for your money. How to approach this will rely on where you are purchasing the vehicle.
Buying at the Dealership
Although it might be tempting to inform the salesman right away that you will be paying cash, you shouldn’t do this! You will be more in control if the salesperson has less information regarding your financial situation.
Maintain vague financial conversations until you get to select the car you desire and get to their financing department. You can tell them that depending on the vehicle you picked.
You have decided to pay in cash. It will maintain the conversation around pricing instead of financing options. In case they attempt to steer the discussion away from cost and towards financing, ensure to take back control.
Buying From a Private Seller
Private seller car purchases are often made in cash. That means that the negotiation process is usually much more straightforward.
Ensure to come to any discussion with a private seller prepared to hilt with information about the vehicle you wish to buy. Figure out the vehicle’s present value, how much that value depreciates with different types of damage, and, if you can, try to understand how much/ why that seller wishes to get rid of the car.
Generally speaking, all of this knowledge should be useful when looking to get a relatively lower price from anyone, especially private sellers who are not experts in negotiating car prices.
Most older teens and young adults often find themselves without a vehicle to drive to university/college, work, or around the city to run their errands. But if you need a car, regardless if it’s new or used, you could use the above smart saving tactics that should get you driving in your car in no time.