How to Save Money to Buy a Car

If you're thinking about buying a car in the near future but are struggling to come up with the payments - or even know where to start with the whole process - we're here to help you understand what you need to do.

Behind buying a house, buying a car will likely be the most expensive item you ever acquire, so it's really important that you don't rush into a purchase without knowing everything beforehand.

It's been a tough few years with the pandemic and now the increased cost of living crisis threatening us all, which makes buying 'luxury' items like a car that little bit harder than it already was.

Do you know if your car is in a positive or negative equity position? Find out for free today and see if you are eligible to upgrade your car or save money on your car finance deal.

Though for many, a car is integral to being able to get to and from work, take the children to school, or look after relatives, and therefore becomes a much higher priority if you currently don't have one.

In this article, we'll look at what you can do now to start preparing yourself to buy a car, and what you can do as you get closer to being able to afford and buy one.

Identify what you want and the costs involved

Do some research and find out the exact car you want, down to the make, model, and any modifications. If you know what you want in advance and identify how much it'll likely cost you, you can then plan your budgets from there.

Not only that, but you will feel much more confident and in control if you know your stuff before you go to buy; you'll be more likely to get a better deal.

It's also worth knowing how much you can afford and want to put down as an initial deposit. This will make you more attractive to a prospective lender and also reduce your overall monthly payments.

Create a monthly budget and stick to it

Once you know exactly how much you should be expected to spend on your chosen car, create a monthly budget and stick to it. Having a budget will ensure that you are not spending beyond your means each month.

It will also give you an exciting goal to aim for and will help you get into a good routine once you do buy and have to make your fixed monthly payments to finance it.

Not only will a monthly budget help with your savings, but also your general monthly outgoings, future plans, and more. It's a great and easy way of staying organised and feeling on top of your finances.

Avoid making card payments

One thing you could do to help keep you vigilant with your outgoings is to withdraw a certain amount of cash each month and only spend that, rather than using your debit card.

It's becoming less common for people to pay with cash these days, but taking some out at the start of the month and sticking to that number is a great way to stop you from overspending.

It's so easy to wave your contactless card at a payment and forget what you've spent. But paying only with cash and setting yourself a figure each month is a good way to control your spending habits.

Sell your car if you already have one

Maybe you have two cars but only need one. Or you have a more expensive car but want to downsize and get into something cheaper. Either way, part-exchanging or selling your car is a great way to get some funds to put towards something new.

Ask for a loan from family members

Asking to borrow money from family members can be a daunting prospect, but if having a car is critical for your job or family, then sometimes needs must.

The likelihood is the people around you will be willing to help you out and if you're prepared to pay them back then it's going to be a more likely solution.

You don't even need to ask to borrow money if you have a birthday or special occasion coming up. You could ask for money to put towards a new car, or you may even be lucky enough that they buy one for you.

Sell items you no longer need or use

You may have bought items in the past that you no longer need or use and they're still worth a bit of money even at a second-hand price.

There are plenty of online platforms that allow you to sell to others and it really could be anything from furniture to clothes. 

Even if you could sell a few bits and make a couple of hundred pounds, that's more money than you'd have had if the items were just sat around your house not getting used.

Reduce your monthly outgoings

It's easier said than done for sure, but reducing your monthly outgoings will save you a lot of money both now and in the future.

Perhaps you buy a coffee on your way to the office every day or do your weekly shopping at one of the higher-end supermarkets. Simply reducing some of the everyday items you buy could help you save.

Get a savings account

Opening a savings account with your bank is an easy way to ensure that money you want to save for the future is being held safely where you'll be less likely to pick at it.

Most banks allow you to open a savings account online so it should be a quick and easy process for you to get sorted out today.

Keep an eye on deals

When out shopping or looking to buy something specific, shop around for deals rather than jumping on the first thing you see.

The ability to buy most things online now does allow you the opportunity to browse before you buy, and that should be no different from when you buy your car.

Check your equity position and the options available to you for free.

Take out car finance

Car finance is the best way to purchase a car now. The options are flexible, and you have different choices to suit your needs and budget.

Paying for a car with cash may seem like a great solution now, but having that extra cash stored away for a rainy day could be critical to helping you get by in the future.

With car finance, you know how much you're going to pay each month from the very beginning so can budget accordingly and choose how long you want to make your repayments.

It also gives you the option to change your car every few years or own it outright after you've paid everything off, depending on the type of finance plan you take out.

It's quick and easy and can be done online from the comfort of your own home. Car Credible can help you with all of this so you don't have to stress or wonder what to do.