A Guide to Help You Save Money for your Dream Car

A Guide to Help You Save Money for your Dream Car

People in the UK, especially the millennial generation, are very fond of fast cars and it’s almost their school or college dream to buy one for themselves when they start earning money. That priceless feeling you get the keys of your favourite car is just something which cannot be defined in words.

However, owning that dream car isn’t a cakewalk since it is expensive, and one needs to cut back on certain futile expenses and save money to finance your dream car.

Another route of owning that car is taking car loans with bad credit to finance the vehicle. This being a car loan, if you take these loans, there would not be any hypothecation against the car, and you get to own the vehicle.

This route to get the car by taking a loan can opt, but the issue here is that these loans’ interest rate is significantly higher than what an established commercial bank would charge. The monthly instalment amount during repayment would also be higher, and it could be a considerable burden on your finances.

Thus, it is better to purchase your dream car with your own money so that you don’t have to pay anything extra in the form of interest that is over and above the vehicle’s cost. Here’s how you can do it,

The tricks to save money do not involve skipping breakfast or meals in a week, but you can reduce the frequency of dining in expensive restaurants. Mentioned below are some of the tips and tricks to pool money to buy a car, here it goes:

  • Savings should be your Priority

The only way to finance your dream car with your own money is saving that money. Set a savings target for the week, month, quarter or a year and strive to achieve that target.

Quantify this target to decide a fixed amount to be saved every month or every quarter. This target should be following the money needed to buy that car and the time duration you are planning to get that car. Do a simple calculation to arrive at the amount to be saved every month and venture on this savings spree.

To achieve this target, you might need to restrain yourself from spending freely which you were doing up until now. You might have to cut back on unnecessary expenditures, switch to a cheaper broadband plan, cancel subscriptions you rarely use.

Otherwise, you will have to resort to quick loan in the UK to sit behind the wheels of your dream car, thus make savings as your habit.

  • Secure Your Savings

It is advisable by many money managers and financial planners to put your surplus funds in any asset class owing to the time value of money.

There are two benefits to it: you see that surplus multiplying as you fetch interest on your deposit and second being you will not spend this savings even if you want to.

This asset class could be a savings bank account, a term deposit in the form of a fixed deposit or a recurring deposit where your money is secured, and you also earn 4-6% interest on it.

If you can take some additional risk, invest this money in mutual funds via a systematic investment plan (SIP) or directly trade shares. You can buy 91 days or 182 days government bonds, which are also the safest investment instruments as the government never defaults on its obligations.

  • Start Early

Let’s get this straight if you start earning when you’re 23 or 24 years old then don’t wait thinking that you will begin accumulating money when you’ll be 28 or 30 years old.

The early you start, the more you can save in lesser time and besides the financial responsibilities increase more than your salary hike after a certain age. It’s like life insurance, the sooner you take it, the lesser will its monthly premium.

Have a well-defined plan in place which involves your monthly budget, and you should strictly follow this budget with discipline. This budget will have a detailed list of all the necessary expenditures and subtracting it from your total income will be your monthly savings.

If you are less occupied in the evening or on weekends, you can also work part-time or freelance to make some money to spend on things that generate any value to you easily. Many online platforms like Upwork or PeoplePerHour have a plethora of part-time work opportunities for you.

  • Choose the Best Deal

Now that you have saved enough money to purchase that dream car you were saving money for. It is finally time to sit behind its wheels, hang on, don’t get super excited and buy the vehicle from the first seller you interact with.

As a practice, you should do thorough research on the internet and interact with car dealers and your friends to know about the best deals on your dream car. Ask for quotes from different car dealers and compare the prices and after-sales service commitment to arriving at the most lucrative deal.

Also, ask and understand all the complimentary services the dealer is offering you and the car. It could be a free car service, insurance, sunroof, music system, cash discount, seat cover, etc.

If you are short of some money, these dealers can also connect you with some financing option to get the deficit amount.