Ways to save for a car

Getting your head around the world of money can be tough. But, once you’ve got the fundamentals down, everything gets that bit easier. In this blog, Blue Motor Finance provides tips on saving for a car. 

Many people are put off  buying a car as soon as they see the upfront costs. This is as true for traditional vehicles as it is for electric cars. However, with a bit of careful planning, saving for a car need not be so daunting. 

Whether you’re savings towards a deposit for car finance or looking to buy a car outright, this blog provides some top tips to help you hit the road.  

Set yourself goals – Having a plan will help to keep you motivated as you work towards your overall goal. Plot in milestones along the way and celebrate them when you achieve them. But remember, now more than ever, saving isn’t easy, so it’s equally important not to be too hard on yourself if you miss a milestone. Simply adjust your plan and carry on. 

Carefully consider the deposit – If you’re saving towards a deposit for car finance on a used car, it will likely need to be 10% of the total amount you plan to borrow. That could rise to 20% for a new car. But, if you can put forward an even higher deposit, it might help lower your monthly repayments. 

New or used?  

If you haven’t yet decided between a new or used car, that could affect how much you need to save. Here are some of the key things to consider. 

The pros of buying a new car:  

• More customisation options 

• Cheaper maintenance 

The cons of buying a new car 

• Quicker depreciation, meaning the car will lose its value quicker 

• More expensive to insure 

The pros of buying a used car 

• Cheaper to insure 

• Slower depreciation, as used cars don’t lose their value as quickly as new ones 

The cons of buying a used car 

• Fewer consumer protections 

• More wear & tear 

Don’t forget about the extras – Of course, the initial cost of the car or deposit is not the only thing you’ll need to factor into your savings plan. There’s the insurance, road tax, fuel, parking costs and maintenance. So maybe set your final savings goal just that little bit higher, so you have some money in the bank to cover these extras. 

Save where you can – It’s great to follow your savings plan, but any extra savings you can make could get you into your dream car faster. Lots of us have subscriptions or memberships that we no longer use – is this you? If so, it might be time to hit cancel. There may also be other areas you could make savings in. Look out for fun things to do in your local area for free for your next day out. Or, if possible, have a no-spend day. 

Automate your saving – Open a dedicated savings account and then set up a standing order so you can top it up regularly from your main account at a frequency that suits you. That way, you won’t have to remember to manually transfer the money, and you’ll be less likely to accidently spend the money you’re setting aside.  

That’s everything for now. Keep an eye on the blog as we’ll be posting more articles to help you master your money.