Everyone wants to own a car after getting a license, and getting the first car can be a step towards self-sufficiency for many.
A few years back, for example, it was said that millennials were the end of the auto industry, yet, as now millennials have more years of work experience and live in a better economy, things have changed. Research shows that in 2018, American millennials accounted for new vehicle sales growth.
However, even with the improved state of the economy, saving up thousands of dollars in order to purchase a car can be discouraging. Therefore, it is important to take out time to plan the right process for the purchase of the car one desires. One needs to also know how they wish to finance their cars, would one make use of a novated lease or get a loan. Many factors as such will lead to the realization of the goal to buy an automated vehicle.
Below are 3 tips on saving up money to buy
Choosing the right car
The type of car one chooses to purchase plays a big role. This not only includes the model of the car but also whether the selected car will be new or used. There are pros and cons of either one, new cars, for example, tend to be more reliable, conversely, new cars depreciate at almost 25% and have higher insurance costs. On the other hand, used cars are cost friendly and if one searches properly it is possible to find an almost-new car, however, some fear that used cars are not as reliable. Choosing the right car will help determine exactly how much money one will have to save up. While used cars are recommended in many cases, the ultimate decision lies upon the money one wants to spend.
Choose the payment option
The next step after choosing the car one wants to purchase is to understand how they wish to pay for it. There are many different viable options to purchase a car, one can either use a monthly payment plan or a type of loan or as previously mentioned novated leases. One can even choose to pay in full, however, that usually is not the case for most first-time car owners. Each option would, nonetheless, require a percentage of down payments which will, therefore, reflect on how much money one starts saving up.
According to the manner in which one decides to finance their new car, one can start creating a budget. The budgeting will depend on various factors, such as income, the time span to buy the car, and spending habits. Preferably, cutting down on external costs such as fast food or travel would be advised. It is also recommended that one open a savings account with the best terms of interest in order to appropriately save up money.
Overall, saving for a new car seems daunting; however, when planned out, it is not that difficult at all. Clearly, one needs to make better spending choices when deciding to add an automated vehicle to their assets. At the end of the day, though, these choices will reflect positively in one’s life in the long run.