8 Effective Ways On How To Save Money For A Car

Most of us dream of owning a car and taking a long drive to your city. Cars have become one of the prime needs of working people who want to commute to another place without much hassle.

 

However, buying a car is a costly deal, and most people even do not afford it. Hence, in today's article, we will uncover how to save money for a car. Reading this post will help you save a significant amount of money to buy either a used or brand new car for you.

 

So, keep reading this article and get maximum output from this researched information. 

8 Best Ways To Save Money For Car 

#1. Decide Your Budget

Several models are available in different budget segments; you can buy hatchback cars to sedans. But still, there are multiple price segments that you have to choose based on your budget. If you are a budget user and do not want to invest much in buying a new or old car. You can consider starting level variants that fall within your budget. 

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#2. Select Your Favorite Car

Once you decide on your budget, start researching various cars you can buy under your budget range. Also, choose your car wisely based on weather and road conditions in your area. If you live in a village or city, you will have to face different situations in both places. Hence, you can choose your favorite car to buy considering these factors. 

#3. Choose From The New Vs. Old Model.

There are old and new cars and car markets available; here is a short comparison that will help you understand which one can meet your goals. 

A Short Comparison Of Buying An Old And New Car

Comparison	Old car	New car
Price	Affordable	Very costly
Repairs and maintenance	Need more attention on repairs and maintenance	It does not need much attention on its repair and maintenance as most new cars come with three years to five-year warranty cover.
Insurance	Cost more	It's already covered in the car's price and stays affordable
Value for money	Old cars can provide the best value for money because some of them are very rarely used.	It may not provide much value for money as many new models can be overpriced.
Debt	You will have to take less debt if you do not have money to buy a car here.	But here, you will have to take significant debt that can cause you a high-interest rate.
Suitable	For college students and those who want to learn how to drive a car.	Those who are financially independent want to get more assets in their club.
Deprecation	It does not affect much as you have purchased a car at a low rate.	It's about 25% after taking your car out from the showroom.
Recurring charges	Recurring charges can be more as it's a second-hand car and can have to replace the tires and battery after a few years.	Generally, it does not require frequent recurring charges, especially under the first three to five years.

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#4. Start Saving Some Money From Expenses.

You have created your budget, selected your car model, and decided you will buy an old or new car. So, what's the next step to get your dream car into your home? It's the time to start saving some money that starts from cutting expenses. Most of the time, you make unnecessary purchases that decrease your savings.

Hence, if you buy books a lot, you can consider getting its Kindle version, avoid purchasing brand new launch items, and other ways you can cut down your expenses and save some more money. 

#5. Open RD Or Savings Account

If you have one account, you can consider opening a new account where you will deposit money that you will use to buy a car. You can consider a savings account or RD account; both are good for getting interested in the deposited amount. If your bank does not provide a high-interest rate on savings or RD accounts, you can invest your money. 

Most people prefer a savings account giving 3.5% interest, but if you have a stable income source. The RD scheme can be best as it regularly gives you about 4% interest. 

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#6. Invest In Stock Market Or Mutual Funds SIP.

Investing money is a great way to generate side income and increase savings. Nowadays, there are many platforms to invest your money in the share market, IPOs, mutual funds, and even P2P lending. However, if you are starting, you should focus on buying beginner-friendly stocks in the stock market and SIP in mutual fund investment schemes. 

If you do not want to invest in these options, you can consider fixed deposit schemes. A one-year fixed deposit scheme can help you earn about 5.5% interest on the deposited amount. Hence, it can also be an excellent option to consider generating more funds to buy your car. 

#7. Start A Side Hustle To Make Extra Money.

If you are doing a job and your earnings are not sufficient to buy a car. In that case, you can use some best side hustles to make extra money in your free time. There are many side hustles, such as making money from reading emails, watching ads, typing audio, filling captchas, and even doing data entry work. You can get some freelance clients and start generating some side money to save money to buy a car fast. 

#8. Consider Getting Financing

When you do not have money to buy a car, saving money is not sufficient to buy your dream car. In that case, you can get financing, but here you will have to make some down payment. You should aim to make a 20% down payment while buying a new car and a 10% down payment while buying an old car. Most people follow the thumb rule when they purchase a valuable vehicle on credit. 

Conclusion

Buying a car is a costly deal for most people, even if you look for second-hand options. You can pay a significant amount upfront; hence it's good to play with your budget and gather some funds to bring this asset to your house. In today's article, we discussed how to save money for a car for you.

Here, you learned you should make a budget, decide on a car, choose from old and new, cut down expenses, start a side hustle, and use a separate savings account to stay tuned to your goal.

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