posted by mommies2cents on 2012

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Today’s featured guest post:

Tips to Saving Money for a Car

Like most big purchases, financing a car can be a real challenge. If you’re on the hunt for a new car, you’ll need to start saving now—if you haven’t already. Cars come in a multitude of shapes, colors, and sizes. But before you focus on a make and model, you’ll need to get your budget in order. Even if you’re leasing, it’s best to get ahead on your car payments before signing anything. If you’re buying, you’ll want to save enough to pay cash for most—if not all—of the car.

If you’re looking to save for a car, take these tips into consideration.

Lease or Buy?

First, ask yourself: should I pay cash, sign a lease, or finance my new car? It all depends on your current financial situation. For many, it makes sense to lease a car. Leasing allows you to drive a new car with only small monthly payments to worry about. Of course, most deals require a down payment. Even if they don’t, it’s best to pay a few thousand down, so you can lower your payment throughout the life of the lease. Keep in mind that you’ll have a low mileage limit every year.  Go over the terms with a keen eye; there may be hidden terms that will come back to haunt you down the road.

So what about purchasing? It depends on how much you have in your bank account, and how urgently you need the transportation. If you can save enough to buy a car that’s less than 5 years old and, with a clean record and less than 50,000 miles, purchasing may be your best bet. That way, you’ll have the option to sell and you won’t have to worry about monthly payments, mileage overages, fees for excessive wear and tear, and other incidentals. If you don’t have enough to pay for the car in full, you can always take out an auto loan from your bank. If eligible, you can get a pretty good rate on a vehicle. But try not to take out more than you can afford to pay off in a year or two. Money paid on interest is money wasted, so avoid auto loans if you can.

Saving for a Car

And now onto the money-saving tips. Whether you decide to lease or buy, you’ll need to have some money saved, so you can be prepared if things go awry. After all, the last thing you want is to be stuck with a car payment or car loan and no job. Once you have a price in mind, stand by it and start saving before making an offer.

Create monthly savings goals. You can’t save without a goal in mind. Get organized and start a monthly savings plan. Open a new savings account dedicated to your future ride and put a certain amount of money aside every month. Aim high and scale it back if necessary. Shop around and find the best interest rate. A money market may be your best option.

Try carpooling until you get your new car. Share a ride to work with a    coworker, friend, or spouse. This will save you—and your fellow carpoolers—a lot on gas. If you get three or more people to ride with you, the costs will be very minimal. Visit erideshare.com for routes near you.

Keep your current car in shape. That old car could be worth more than   you think. Treat it like you would your new car to maximize the trade-in value. Stay up-to-date on your car’s maintenance to keep things running smoothly.

Sell your services. What’s your specialty? Do you like making things? Open a shop on Etsy.com. Are you clever with words? Open and account on NamingForce.com to earn extra money for naming companies, URLs, and products. And there are plenty of night jobs that may fit the bill. You could end up making extra money doing what you love and helping those who need it most. If you choose to go solo, begin by offering your services to friends and family and branch out once things pick up.

Boycott restaurants and clothes shopping. Now is the time to be disciplined about your spending habits. If you want to make your new car a priority, you’ll need to cut back on purchases. Avoid malls and restaurants until you hit your mark. Sure, the occasional lunch and clothing purchase is okay; just make sure you don’t make a habit of it.

Stop wasting money. This is pretty simple. Analyze your bank statements from a new angle. Look over each item and consider the alternatives. Avoid buying bottled water, prepackaged foods, individual cups of coffee, new technologies, gimmicky health products, audio equipment, subscriptions (of any sort), and designer clothing. The list goes on and on. There’s a cheaper way to buy—or not buy—stuff.

Clean out your closets and basements. As for all the things you don’t use, sell them and relish the newfound space in your house, and car money in your pocket.

About the Author:

For over 15 years, Check N’ Go has been a leader in online check cashing and payday loan services, helping to build legitimacy to the consumer lending industry through their work with the Consumer Financial Services Association. Check ‘n Go sets high standards for ethical and responsible lending in a rapidly expanding cash advance and payday loan business. Check ‘n Go works tirelessly to provide consumers with auto title loans, check cashing, installment loans, and other financial needs.

 

References

[1] Rivers, Jonathan. “Stop Wasting Your Money on These 25 Things | Shrinkage Is Good.” Cell      Phone Plans, Credit Cards & CD Rates, Compare & Save Money on BillShrink. 29 June 2010. Web.        27 Dec. 2011. <http://www.billshrink.com/blog/1156/save-money/>.

[2] Kirchner, Audry. “How To Save Money To Buy A Car: Tips And Tricks on Saving Money For a Car.” Akirchner on HubPages. Web. 27 Dec. 2011. <http://akirchner.hubpages.com/hub/Tips-    And-Tricks-on-Saving-Money-For-a-Car>.

Tags: Auto Financing, Auto Loan, Buying a Car, Car Buying, Car Buying Tips, Car Financing, Car Leasing, Financing a Car, Lease a Car, Saving for a Car