Money-Saving Hacks for Future Car Owners

If you’re ready for a new car, but are unsure how to effectively save your money, read on. You can also speak with our financial experts at Kia of Auburn in AL!

Buying a car requires a lot of money. People usually take car loans to defray costs over a long period. This involves saving money for a down payment. There are a few things that you, as a buyer, can do to have enough money for a down payment. Having 20% or 25% of the vehicle price for a down payment will put you in a better bargaining position. Here are some tips on how to save efficiently for your new car.

How To Save For a Down Payment

1. Pick a car: Do research online and find out which cars are within your budget. Check new and used cars and shortlist a couple.

2. Calculate the down payment amount: This is the next step in the process. Figure out how much you can afford for a down payment. 20% of car price is a good down payment for a new one and 10% for a used car.

3. Car maintenance expenses: Financial experts recommend following a 50-30-20 rule for budgeting. 50% takes care of essentials like rent and food, 30% for what you need. 30% acts as a cushion in case of trouble, and 20% should be used for savings and paying debt off. Car loan, insurance, and maintenance payments should become part of your budget. Keep it to 20% of income after taxes.

4. Cut unnecessary spending: While saving for a car, cut down on unnecessary expenses. Put this money in the car payment fund, and you will soon have enough for a down payment.

5. Investments: Set up automatic investment plans so that money is transferred out on a specific day. This will ensure you have a rainy-day fund when you face unexpected emergencies.

6. Pick up a freelance job: If your budget is still tight after taking the above steps, take up a side gig. Make sure that the job is legitimate, and you have enough free time, too.

These tips are just ideas on how to save efficiently to build a good nest egg and keep your credit scores in a good range. There are tools on the internet that can help you find a car and also set up a savings plan. With a little discipline, you can become financially stable.

For more information, visit our Kia of Auburn dealership in Auburn, AL, serving the neighboring communities of Montgomery, Tuskegee, and Columbus.