Whether you’re saving for your very first car, or you’re looking to update your current one, saving up for a deposit can be difficult. Luckily, you’re reading this, which puts you one step ahead of everyone else. Take a look at our top tips for saving for your new motor.
The Bigger the Deposit the Better
There are a number of ways that you can buy a car, but whichever you choose, having a deposit could mean that you save some money in the long term. Most people either arrange finance at the dealership when they buy the car or they arrange a loan elsewhere. Whichever method you choose, the advice remains the same: the bigger your deposit, the less you’ll have to pay back. You may be eligible for a better interest rate too.
Decide How Much You Need to Save
Having a goal to work towards helps you focus on saving. Of course, the actual number will depend on the car that you want to buy. Even a small increase in deposit size can make a difference to your repayments.
Don’t aim too high. This might result in you cutting out too much stuff that you like, not wanting to save and then ultimately failing to get the deposit that you want.
Be patient too. It’s unlikely that you’ll be able to meet your goal within a couple of weeks.
Making Your Money Work
Head to a couple of price comparison sites and search for the best savings account. Look for a good interest rate that’ll help accelerate your savings. You could sacrifice access to your money for a year or two in return for a really good interest rate – if you can wait that long for a new car.
Saving regularly can be something you don’t even have to think about. Set up a standing order to your new savings account and you’ll be saving automatically.
Ways to Save
There are lots and lots of ways that you can save money. Put simply, you can reduce your outgoings or increase your income.
To reduce your outgoings, simply have a look at what you’re spending your money on, and figure out a way to pay less. For instance, you could make morning coffees and lunches at home instead of buying it every day. You could buy own-brand food. You could shop around to see if you could get a better deal on your utility bills.
On the other side of the coin, increasing your income can be tricky. For instance, you could sell your embroidery designs or your handmade clothes. Put all the profit that you make from these endeavours into your savings account to boost your deposit.
Once You’ve Got Your Deposit
Now you’ve reached your deposit goal, you can go out and spend it on a new car!
Written by Darcie at motor finance 4u, a car finance company that works with you to make sure that you get a car that you love.