How To Start Saving For Your First Car

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money matter, money talks, tips + tricks

Buying a car is a great idea if you want to gain a little independence for yourself. As a teenager, buying a car means no longer needing parents or friends to drive you to the movies or to school. When you get older, having a reliable car means no longer relying on the bus or having work within walking distance to make it in on time. How do you save for your first car?

Start Saving As Soon As Possible

Although this may seem backwards, the first step is to find a job that offers you a steady pay check. If you can’t find a job that you can walk to or find a ride to each day, you can work at home doing odd jobs found on the Internet. There are always data entry, blog writing and customer service jobs being listed every day that you can do from home.

Do Your Research Ahead Of Time

Research the amount of money it will take to buy the car that you want. Consider if you need a new car check out the car deals on offer or if a used car will be good enough for you. Next, you want to decide if you are going to buy from a dealer or a private party. When you find a car that you like, take note of how much it will cost to purchase. Do you want to pay in cash, or do you want to make a partial payment and have the rest financed?

Where Will You Get A Loan?

If you decide to have the car financed, where will you get a loan from? Many banks will charge as much as 5 percent interest on a car loan to those with average to poor credit. However, those with good credit can get a loan from a credit union at at a rate of 3 percent or lower. This means that you should start thinking about your credit score and how it will impact your ability to buy a car.

Do You Have Anywhere To Invest Your Money?

If you have stocks, bonds or mutual funds that you have money in, you should consider using the interest income as a down payment. This is because the money that you take out of your investment portfolio will be taxed at a much lower rate than your earned income. Therefore, you can take money that you earned by doing nothing and use it to buy something that will help you out in the future.

You want to plan as much as possible for the purchase of your first car. If you want to buy something nice, you need to start saving now and start thinking about where you can get a low interest loan if you need one.

Author Bio: Jack has been a mechanic for 5 years and is a complete rev head. He has 3 cars to his name, and his past time hobbies include redoing old cars, travelling, going to car shows and writing blogs about cars.

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