How to Save Money for your First Car Purchase Intelligently?
Getting a car is not the end of the deal, there are a lot of other financial considerations that you need to think over to get not only your very own car but do so peacefully and easily.
After you get your first job as you graduate from college, you have a truckload of desires that have delayed for so long that you think of fulfilling each one of them with the money you start earning like getting your own personal home, going for a vacation and even saving to open up your own entrepreneurial venture.
IMAGE: Pixabay
As much as you want those things, you cannot get them without having a financial plan for yourself on how you will be able to achieve them.
One of the most desired items you would opt for upfront is going to be your very own car as it will give you the first whiff towards the feeling of having attained financial independence but as much as you want it, your first car shouldn’t be an example of impulsive buying as this will lead you towards becoming unsure of all your future purchases due to the unplanned nature of the transaction.
While the term “saving” may possess a very simple definition that tells you to spend less than your income, it is an altogether different ball game when you put it into practicality. However, there is a step by step plan which you can follow to get your very own car with the minimum amount of fuss and let you experience the joy that comes with it:
Get the information on all cars available in your desired range:
IMAGE: Pexels
While you may like to see a Bugatti or a Porsche being parked in your garage as a first-time experience, it’s down to how much you earn which determines the type of car you can afford to buy.
Ideally, the cars within your price range are the ones you can buy if you save up to 20% of your income for the 3-4 years, or pay the same amount on the loan, plus interest if your car came from that source. After calculating how much that amount will be, contact your local dealers or go online to check out all the new and used cars, depending on their current condition, you can get with that amount. This is like setting a goal for yourself and it will make your mind get a direction.
Deciding on when you actually want the car in your possession:
This might seem a small deal but the time when you want your car with you will determine what you actually opt for i.e. either delaying the purchase and saving enough to get it or getting it on a loan and then paying up gradually.
The plan you will choose will determine the amount you finally pay for the same car in both instances. If you get a car loan, the final amount you end up paying will be quite high but you will get the car instantly and if you opt for saving, the car will cost lower, but you would have to wait.
Determining your current needs and financial responsibilities at this point in time weighs in greatly in your final decision as if you believe you can cope up with the pressure of paying up for a car loan every month and do not have anything else in tow, then it would be desirable to opt for this option.
Make setting aside the monthly amount for the car a priority:
It’s easy to commit, but extremely hard to follow as financially, things get their troughs and crests every month and even a single month where you don’t save can signal huge trouble as you would have to pay up double the next month putting you in a precarious situation if you are under a loan.
The non-payment will invariably affect your credit score and make it difficult to get a loan for your next purchase. Make it a priority to save before you start spending and make it obligatory on yourself to do so and as you just got your first job, you do not have the financial cushion to defer your payments and then pay them back later on.
Assimilate the payment/saving amount with other financial obligations:
The last thing that comes is to make the car payment/saving assimilate with your other similar responsibilities and think of all of them as equally important. Don’t lose sight of other obligations to render your car payment like do not end up with a defaulted student loan or your health insurance premium in order to be on par with your car payment schedule as this will affect you in the end as all loans are to be paid by you and you will lose out on a lot by committing to this type of behavior.
The best way to do so is to streamline your different type of payments and set aside the exact amount every month before you start any other sort of instantaneous spending on your part. Your car might get you utmost love and it might be indispensable to you, but to become a happy owner, first keep everything neutralized to be at peace and poised to enjoy your very own car like you should.