Save for a New Car
Cars are not cheap possessions. They cost a lot upfront and they cost a lot in maintenance. If you wish to own one, saving up for it requires discipline and a set of goal milestones to achieving your savings goal.
Getting a First Time Car for Teens and Young Adults
- Get a part time/summer job. Part time and summer jobs can be a great way to earn some cash to buy a cheap beginner car. These jobs include: mowing lawns in your neighborhood, raking leaves/shoveling snow. House sitting, baby sitting, dog sitting/walking are all great opportunities to make some extra cash to have some spending money as well as money to put back towards a car.
- Save as much as possible. When saving for a car, question every purchase and make sure it isn't a waste of money. It is recommended to start saving around the age of 13 if you have a part time job, or even just get paid to do chores. Instead of spending your allowance, try putting it into a piggy bank or a bank account that you won't touch.
- Keep track. Keep a ledger (money log) to make sure you know where all your money is being earned and spent at. This will help you stay motivated to keep saving more money. the more you save the better car you can get (keep in mind that you need a reserve amount of money for gas, insurance, and maintenance on the vehicle.)
Getting a New Car when You Already Own One
- Stick it out with your old car. The longer you can keep running it, the better. Unless, of course, your old car is costing you more money than what you can afford to put into it.
- Keep the old care in good condition. Once the car is paid for (60 months on a standard car loan), keep the car in good operating condition and continue to drive it.
- Keep up the payments. As you commute with your car to work and elsewhere, make sure to keep making your monthly payments into a savings account.
- Scenario = If you make 400 dollar monthly payments on your Jeep, and pay it off in 4 years, the Jeep can be driven for at least another year or two. If you continue to make 400 dollar payments to your savings account for 16 months, you will have a total of 6400 dollars to put down towards a new car. You can do this for longer and be able to pay for the new car in full.
- Consider opening a separate bank account dedicated to saving for your new car. Many employers allow you to control how you want your paychecks deposited. If possible, have your monthly payment direct-deposited into this new account. This ensures that you won't be tempted to use those funds for other expenses throughout the month.
- Don't get caught up in the wants of life. Too many times you may feel tempted to buy a new car when your old one is doing just fine. The Beemers and Benzes are nice, but they'll make you broke unless you can afford it.
- Keep a warranty on your car for as long as you can. Many credit unions that offer loans also offer some sort of warranty package that can be bought for a reasonable amount of money.
- Maintain your car! Some simple steps to keep your car in top shape would be: checking tire pressure, checking oil and coolant levels, and making sure you have a first aid kit onboard.
- You will want to have an idea of what kind of car you want, so that you can find pricing on insurance, gas, and the outright cost of buying the car.
- Unless you have unlimited amounts of money, buying a sports car isn't your best option for a first car. depending on where you live a normal compact car (Toyota Camry) or a small to mid-sized truck. These vehicles usually have low insurance and have great functionality and dependency.