How to Save for a Car with Smart Tips to Reach Your Goal

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Sep 12, 2024

How to Save for a Car with Smart Tips to Reach Your Goal

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If you need to commute daily, whether to work or for groceries, you need a car since public transport is only sometimes convenient, nowhere near well-developed, and not very safe. But getting a car is no easy feat, especially in today’s economy. So, if you want to know some tips and tricks on how to save up for a car, this post is for you!

In this article

1. Find a car that works for you

First thing first, you need to figure out what vehicle you want to get and what the budget is. Are you buying used or new? What make and model you want? Can you get a car loan? Are you paying cash? Would it be more worth it to lease a car instead? Once you have the answers to all of these questions, you can start planning how to save enough money to buy a car.

2. Budget for a new car

After figuring out the best car for you, the next step is determining the budget. Calculating how much money you can put aside every month is vital. Once that is settled, the hard part starts — actually saving up the money. In some months, you may need to put less into your savings; in others, you can allow yourself to put more than you budget for.

3. Figure out monthly expenses

When you decide what vehicle you are budgeting for, going over all your monthly expenses is your next step. I’m talking about gas, car insurance, and maintenance after you get the car. See how you can budget for those expenses and how they fit into your current finances.

4. Open up an automated savings account

If you open up a separate bank account that only has the purpose of saving up for your new car, you should make sure it is an automated account that will take a set amount of money from your main account every month. Even though you will have an automated savings account, this will be fine when you want to put in more money when you can.

Furthermore, having a separate account will help you visualize how close you are to your goals. If all the money you earn goes to one place, you can never really know how much of it is the money you’ve saved. With a separate account, you can keep exact records of how much you have and how much you still need.

5. Pick up a side hustle

If you are like most people, you don’t have time for a second job, so picking up a side hustle may be the best way to make some money for your car fund. There are many things you can do depending on your skills and knowledge, and here are the most common options.

Joining a survey site

Survey sites will bring a small pay, but they do their job at being a decent side hustle. When you find a site you like, you may need to do a little research to ensure it is not some scam, but once you’ve done that, you can start making money immediately.

Surveys take very little time, and those sites can be more fun if you choose to play games or test apps. Some of these platforms will also have product reviews, so you may get some killer discounts on top of getting paid to review things.

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Becoming a freelancer

If done right, freelance gigs can make you enough money to live off of, let alone save for a car. The best part about freelancing? Well, the flexibility! You can work when you have time and make money that will go into your savings, and you will be that much closer to buying your own vehicle.

Furthermore, freelancing can also build your portfolio and help you secure a better position or a job that will help with savings and racing your goal to buy a car.

Doing various in-person jobs

Other more traditional side hustles can involve babysitting, pet sitting, dog walking, etc. These won’t work for everyone since they are more in-person jobs, but they may work for you, especially if you are young and working towards getting your first car.

6. Improve your credit score

Boosting your credit score is definitely a bit of a doozy and easier said than done. However, if you have a good credit score, you can get a decent car loan and get a car as soon as possible. Then, all the budgeting you will do will be done to pay off the loan instead. Some things you can do to improve your credit score are:

Always making credit card payments on time — This one is simple, yet the most important. Making payments on time means your credit score will not suffer, and you will be closer to getting that loan.
Reviewing your credit report — Always pull your credit card records. This way, you can make sure that there are no errors and discrepancies while working on getting that loan for a new car.
Disputing credit report errors — You must ensure everything is correct and error-free when you check your credit card records. If you find errors, report them and dispute them to get them corrected, updated, or deleted.

If you manage to get a good credit score (if you don’t already have one), getting a car loan should be an uncomplicated venture. After that, it’s up to you to budget to pay back the loan and maintain your car.

Related: How to Improve Your Credit Score in 30 Days

7. Lease a car

If you are not sure you need a car or have no way to budget for one at the moment, leasing a vehicle may be what you need.

Leasing a car is what it sounds like — you get a car for a set number of months and pay a monthly “rent” on it. The advantage of this is that the monthly cost of leasing a car is much lower than paying back a car loan, but the disadvantage is that at the end of the lease, you will not have a car unless you want to keep the lease going.

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The bottom line

Saving for a car in today's economic climate requires careful planning and a mix of strategies. By setting a clear budget, automating savings, picking up side hustles, and improving your credit score, you can make car ownership more attainable. Whether you decide to buy, lease, or save for a car, each step you take is crucial towards achieving your goal of driving your own vehicle.

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