This just in; a car in 2019 will now set you back an average of £13’000. While obviously not all cars cost that much money (and some considerably more), buying new wheels can put a serious dent in your bank balance. Indeed, it’s one of daily life’s more troublesome dichotomies. That the freedom afforded to you on four wheels is one so many of us struggle to afford. Make that initial outlay just a little bit lighter with these; our 5 IDEAL tips on how to save up for a car.
LEVERAGE YOUR CURRENT CAR
Unless you’ve just turned 16 and you’re wearing your green P sticker with pride, you probably already have a car you’re driving around. Even if it isn’t roadworthy there are ways you can use it to jumpstart your savings for some new wheels. Yep, if you’re buying your new car from a dealership, many provide trade-in options. This is where you give them your old car in exchange for a certain amount of money towards your new one.
It’s important to note that traditionally, trade-ins offer you less money than your car is truly worth. If you want to really get your car’s full value, try selling it yourself. List it for sale online and on social media. Don’t forget to put a for-sale sign in the window as you drive it around; a simple, old school method that actually yields surprising results.
But what if your car is a hunk of junk? Well, many salvage yards buy cars to part out or recycle for materials. Though it may just be a small amount of money in exchange for your car, it’s better than nothing. Before you do think about selling your current car, make sure you know what it’s truly worth. Kelley Blue Book is a good resource to use. This site allows you to enter your car’s specifications and gives you price estimates depending on what avenue you sell it through.
START A SINKING FUND
While selling your current car is a great way to fund your new one, odds are it isn’t going to cover the whole price. The best way to save for a car long term, then, is to start a sinking fund.
A sinking fund is a line item in your budget that you contribute to monthly. So each month when you’re paying your bills, you put aside a certain amount of money to this designated purpose, in this care, a car. For example, if you want to save £6,000 to buy a car, you’d put £500 each month for one year into a specific fund. You’d treat this like any other bill and pay it each and every month before you spend money on extra items. Then, at the end of the year, you’d have money to invest in some new wheels.
USE ROUND-UP APPS
If putting aside £500 a month just isn’t going to work with your current budget, there are other ways to save slowly. Round-up smartphone applications, like Acorns, are great saving and spending monitoring tools. These apps work by connecting to your bank account. For each purchase you make, the app automatically rounds up your purchase to the nearest dollar. So if you make a purchase totaling £5.50, then the app will charge you an additional 50p to bring the purchase price up to £6.
The app won’t actually charge your account for a few pence each purchase. Instead, it will keep track of these small amounts and make a withdrawal from your account when it reaches a specific milestone, such as every £5.
There are also options to set up recurring investments, as small or as large as you want. So in addition to your round-ups, you could save an extra £20 each week without having to move the money over yourself. A lot of people swear by this app because it automatically does the saving and investing for you. You set up your account once and can count on the savings to continue for as long as you like. And when you’re ready to buy your car, it’s simple to withdraw your money.
PICK UP A SIDE HUSTLE
If you’re asking how to get a car fast, then you may want to consider increasing your income. Picking up a side-hustle a short period of time can speed up your car buying process. Even if you already have a full-time job, there are part-time opportunities to fit anyone’s schedule. Consider delivering pizzas at the weekend (free slices an extra perk) or babysitting for friends. The income from a few extra hours of work a week can mean you get your car months sooner than originally planned. And that’s what you’re here for, right? Once you’ve reached your goal, you can switch back to only working one job. But, who knows, you may like the extra money and continue hustling. In the words of Jay Z, you can’t knock it.
TAKE ADVANTAGE OF FINANCING OPTIONS
If you’ve taken all the above steps and still don’t have the money you need, there are plenty of financing options to help bridge the gap, short term and manageably enough. We recommend staying away from financing your car fully at the dealership. Traditionally, they offer longer loans with higher interest rates. Instead, visit your local bank or credit union to see what they have to offer.
You can even use online banks like Bonsai Finance to get the money you need. The great part about online banks such as these is that they offer no credit check options, meaning your past financial mistakes won’t impact your current car buying.
