Everyone has goals and dreams of what they want out of life, whether it’s your dream house, car, job or relationship! Why not make these dreams a reality and plan for the future? If you’ve got your dream car in mind but not sure how to save up for it, Refused Car Finance have compiled a list of the best ways to save up for your dream car and also general tips on how to save more money.
1. Set your budget and your end target
Before you start saving for any type of big expense, the first thing you should do is set a goal and budget. Knowing how much you want to save up all together is important so you can budget how much you can save each month. Have a look at all your monthly incomings and outgoings, set a little bit of money aside for the social aspects in your life and then see how much is left over to put away into savings. If you know you can do without some outgoings, maybe you’ve stopped using your Netflix account or pay for a gym membership that you never use, it’s a good idea to cancel any outgoings that you could do without. This way, you can put more into your savings each month.
2. Set up a savings account
If you’re bad at saving money, a savings account is a great idea. The savings account you choose will depend on what’s right for you. Could you confidently save without dipping into your savings? Or do you need something that you can’t touch until the end of an agreed term? Can you afford to put the same amount in each month with a fixed term deposit? Do you want to add money as and when? Shop around for your savings account before you commit to just one. There are so many different types including cash ISAs, easy access savings accounts, notice-savings accounts, regular savings, tax-free help to save and many more. It may sound confusing but savings accounts are a great way to save for any big purchase, just do your research first and decide which is best for you!
3. Explore different ways to buy
Buying a car with cash is really beneficial. The main advantages of buying with cash is that you aren’t tied into monthly payments, can get your car with no deposit and can avoid interest charges. However, if you want your car quite quickly, there are other ways in which you can get a car! Have you thought about buying a car through a car finance provider? If you buy a car through finance, it will be based on your credit score. It’s easy to get a car if you have good credit but it’s not impossible to get bad credit car finance either! Other options include personal loans, using a credit card and HP/PCP agreements. Have a look into all your options before you commit to buy.
4. Be realistic
Your dream car doesn’t have to be a dream anymore. Make your dream a reality but be realistic! It won’t be easy and you have to be patient but as long as you can realistically save up for your next car, why can’t you get the car you want? Obviously if the next car you want is a £100,000 Porsche and you can only afford to save £100 a month, it may not be the most realistic option for you. Take into account everything we have covered in this post so far and also factor in the cost of running a car. So, you’ve spent all your savings on your perfect car but can you actually afford to keep up with regular payments? You will need to think about how much you will spend on diesel/petrol, car tax, maintenance costs such as MOT or services, insurance, any unexpected repair costs and breakdown cover.
5. Choose your car wisely
It’s good to have your dream in mind when buying your next car but some cars can cost you more in the long run. If you spend ages saving up for a car but it doesn’t turn out to be all that cheap, you will more than likely be annoyed! Research has shown that due to car depreciation, a car that is a couple of years older is actually better value for money. Simply put, car depreciation is the value that you buy a car for and the value that you sell it for when you’re done. Factors that affect car depreciation costs include fuel efficiency, mileage and general condition of the car. You avoid car depreciation by choosing a car that’s in demand and has low running costs, keep the mileage low, avoid adding any modifications and buying a nearly new or used car to avoid depreciation.