Your essential guide to saving up for your dream car

saving up for your dream car

Getting the keys to our dream car is something that many of us long for, but… well, the word “dream” may seem to be the key one. Like that date with George Clooney or Scarlett Johansson, it’s something that we fantasise about, much more often than we ever expect to come true. 

And even if you do try to make the dream real (the car, we mean), you may be frustrated by your slow rate of saving, as this hilarious and highly relatable article on the CarThrottle website helps to set out. 

The truth is that simply skipping that morning coffee or switching to smart-price baked beans for breakfast, lunch and dinner probably won’t be enough – on its own – to bring that dream car within your financial reach anytime soon. So, let’s look at some strategies that are proven to work well for those saving up for a dream automobile. 

First of all… what is your savings target? 

As we touched on above, simply attempting to save for the entire upfront cost of something may have worked well enough when you were putting money towards a PlayStation as a kid. But when it comes to obtaining a dream car, you could be working yourself to the bone for a long time. 

So, it’s well worth first asking yourself exactly what you’re saving up for, not least as this will help your motivation. And sure, if you’re fortunate enough to save enough money for the entire cost of the car, you’ll be able to purchase it outright with no interest to pay at all. 

But a somewhat likelier scenario may be that you save up enough for a handsome deposit, which you then use – in combination with the right hire purchase (HP) or personal contract purchase (PCP) deal – to get behind the wheel of your dream vehicle. This can be followed by paying off the remaining cost over a series of fixed monthly instalments. 

You don’t necessarily have to pay a deposit at all, on either a HP or PCP agreement – Car Finance Genie offer deals with zero deposit, as do various other brokers. However, putting down a deposit will lower the amount you then need to pay each month on any finance deal, so it can be well worth doing. 

Have a designated place for your savings 

Whether the savings target that you decide on for a deposit or outright car purchase is in the hundreds or thousands of pounds, it makes sense to have that money stored somewhere separate to your main, month-to-month funds.  

You may already have an online bank account that allows you to set up different pots for different goals, or you might decide to open a separate savings account. 

Different types of savings account suit different circumstances and savers. You might already have a lump sum and some time to save further before committing to a car purchase – in which case, the competitive fixed interest rates offered by fixed rate bonds may interest you. 

Or maybe you like the idea of a savings account that gives you a competitive variable rate, together with the flexibility to take your savings out after a set notice period, such as 30 or 90 days? If so, a notice account could be a good choice for you. 

Start early, and have a definite plan 

The sooner you start putting money aside for that dream car, the quicker you’ll be able to buy it outright or obtain that great finance deal for it – and therefore, the sooner you’ll get behind the wheel of that highly desirable vehicle. 

Both large and small steps will help you towards your savings target. Assessing what counts as truly ‘essential’ expenditure and cutting out the non-essentials – such as eating out or expensive taxi rides to destinations that you could reach via bus or walking instead – is one part of it. 

But you might also investigate other methods for generating funds fast, such as selling your skills on PeoplePerHour or Upwork, selling old and unwanted items on eBay, and even matched betting. 

Shop around for the best possible deal 

Don’t forget that you can bring your dream car purchase closer to reality, simply by getting it for the best possible price in the first place – logic that should extend to both the car itself and whatever finance deal you might seek for it. 

So, be sure to browse online or phone around to research and compare options, but also be wary. You won’t want prospective lenders to make a succession of ‘hard searches’ of your credit file in a short space of time, for instance, given the damage this can do to your credit score. 

So instead, look for brokers that only perform ‘soft searches’, and that will not do a ‘hard search’ without your permission. Brokers also routinely have a panel of lenders to call upon when assessing your application for finance through them, which will save you from having to approach lenders individually. 

There you have it – your dream car really can be yours, with the necessary creativity and determination to save. We wish you the best of luck in your pursuit of the automobile you’ve always wanted! 

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Written by themoneyshed

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