When buying a new car is at the top of your to-do-list, it’s time to create a plan to save the money you need to make it happen. Buying a vehicle is not something you should rush into. Before you go shopping, you’ll need to have your finances in order. Unless you have the cash to buy the car straight out, it will impact your budget in a big way.
To help ensure things go smoothly financially, you can create a money saving plan for a new car.
- Set a time frame for saving the money. Do you plan to buy the new car in six months or a year? This will give you a guideline for how long you have to save the money you need up front. It’s also how long you have to get your budget in order so you can meet your financial obligation each month after purchasing the vehicle.
- Determine how much extra you need each month for the car payment. You can expect to pay between 300 and 500 hundred a month depending on the type of vehicle you’re interested in buying. Do you have that much money extra in your budget each month? If not, you’ll need to eliminate something to make sure you don’t put yourself in a financial bind.
- Figure up how much you want to pay on the down payment. Most dealers expect a certain percentage of the overall price of the vehicle, so it will also depend on what you plan to buy. Divide this amount by the number of months you plan to save and it will give you the amount you need to save each month to have the money for your down payment when the time comes.
- Add in the extras. Remember to include your insurance premiums and the cost to register and get tags for the car in your savings plan. It’s also a good idea to add a little extra for emergencies.
- Once you know how much money you need to save each month, divide this amount by your number of paydays to determine how much you need to save. Then, have this amount sent directly to your savings account each payday.
A money saving plan will help keep you focused and on schedule. It will help you save for the down payment and prepare for the monthly payments, in addition to the other expenses you’ll have after purchasing your new car.