ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How To Save Money To Buy A Car

Updated on January 13, 2011

How to Save Money To Buy a Car

Buying a car is a big step....especially since nowadays, car prices are one of the highest ticket items that you will ever encounter.

Consider this as well.....whatever car you decide to buy will have a powerful effect on how much it costs overall in terms of things like insurance and maintenance.

For instance, buying a flashy red sports car is probably going to cost you a lot more over time than a serviceable modest-priced SUV.

Budgeting to buy a car is a process that can be painful if you don't plan ahead wisely but doing it correctly can give you a great amount of satisfaction.   

By thinking it through carefully and planning, you'll be able to make the right choice in the end and you can save money doing it!

Let's look at a plan for saving to buy a car.

public domain photo
public domain photo

Tips and Tricks of Saving to Buy a Car


  • Get some idea of the kind of car that you want but be realistic. Consider durability, safety records, maintenance costs, fuel costs, year and make of the car. How much are maintenance and car insurance costs going to add to your bills? Make sure you can afford the car in all aspects.  Check out new car guides available at the library, banks, or on-line if you're buying new. Check out blue books and other guides if you're considering a used car.

    Decide if you want an environmentally friendly car. Can you can afford one or do you need something more along the lines of a pickup for your job? All these questions should come into play while you are deciding what kind of car you want but more importantly, what kind of car you need.
  • Now that you've decided what kind of car you can actually afford, price shop. Calculate out how much your bills are and be honest. Include groceries, projected gas money, bills, utilities, entertainment, etc. How much can you afford to pay per month on top of those expenses for a car including insurance and maintenance, fuel costs?
  • What kind of car...new or used? Consider new cars if you've price compared but also consider older models such as 1-3 years old with 10,000-40,000 miles on them. You'll save on the depreciation and still have about three quarters of the life of the car left for a lot less money.
  • Next, figure out the cost of the car for 36 months. Whatever number you come up with that you'll have to pay for a car, subtract 20% down payment cost and then divide the remainder of the balance by 36 months. You won't want to pay beyond 36 months for a car loan because you'll save on your monthly payment yes....but you'll pay an exorbitant amount of money thrown away on interest.

    Let's say you find a car that you want for $12,000. You'd need to come up with a down payment of $2400. Then you'd have a balance of $9600 owing. If you could easily pay $300 per month for a car payment, it would take you 8 months to save for the down payment. Then it would take you 32 months to pay off the balance and you'd own the car....using the figure of $300 per month.

    But of course the car will end up being more than $12,000 when you add in the interest paid for 32 months so you will end up paying longer than 32 months to pay off the car....probably 36 months or less.

    Key elements to saving money for a car are finding a car that is in your price range and that won't cost you an arm and a leg to drive, isn't prone to mechanical problems or high depreciation rates, and that is as fuel efficient and safe as your budget allows.
  • Next thing is to shop for the car. Find the best deal possible. Don't discount any sources. Try the Internet, the papers, dealerships, even craigslist and eBay if you're planning on buying a less than new car. Remember, buying a car with low miles and a couple of years old is going to save you big bucks.

  • Find the best interest rates and loan terms you can. Again, use the Internet, local lending institutions, credit unions, etc. Negotiate with lenders or banks that you currently deal with and ask them to match Internet rates for loans and interest rates. If they won't, use an on-line company for financing your car. Settle only for the best rate you can get.

More Tips on Saving Money To Buy A Car


Check the bluebook for prices to make sure you're not going to be spending more on the car than you should!

If you have a trade-in, don't waste it on a new or used car sale.  Sell it privately on craigslist or yourself because you'll get far more than you will on a trade-in from a dealer.

Have a mechanic check any used car to make sure the car is truly reliable and up to par.

When buying a car, what you see is what you get. There is a no return policy on buying a car so if you decide you're in over your head, you'll have to investigate other options rather than saying you decided against it.....whether it's in 3 days or 3 months.

If you can swing it, pay cash instead. It doesn't take that long to save up the money if you have the budget for it, and you'll discover that it has a whole up side to it......growing your money while you save money!  Check on-line savings accounts for interest rates that are about 5-6 times greater than brick-and-mortar bank rates!

Remember to negotiate, negotiate. Get the best price on any car you buy and make sure you've done your research. Know the new car guides or the bluebook values and avoid hidden costs. Then when you finally start talking the loan, do not take no for an answer. Know the best possible loan rates at the time and don't accept anything less.

Comments

    0 of 8192 characters used
    Post Comment

    • mathira profile image

      mathira 

      6 years ago from chennai

      Very useful tips for car lovers.

    • Simone Smith profile image

      Simone Haruko Smith 

      7 years ago from San Francisco

      Very cool guide! I feel all set to start saving now :D

    • akirchner profile imageAUTHOR

      Audrey Kirchner 

      7 years ago from Washington

      Hanna - what a fabulous tip! That would be like rental cars over here or I suppose we have demo cars, too!

    • Hello, hello, profile image

      Hello, hello, 

      7 years ago from London, UK

      Over her I found that buying a demonstration car which is then three or four months old and had been driven by reps is the best bargain. It reduces up to £4,000 from a new car and is in perfect condition.

    • akirchner profile imageAUTHOR

      Audrey Kirchner 

      7 years ago from Washington

      Thanks Fiddleman for stopping by and that is a GREAT idea!

    • profile image

      Fiddleman 

      7 years ago

      Great hub. I have also noticed several repo's at our CU, sometimes they take bids and a really good deal can be cut.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)