Saving for your dream car

how to save for a new car
how to save for a new car

We all have saving goals – for some, it’s the down payment on a home, for others it’s the holiday of a lifetime. But the rest of us, we dream of hitting the forecourt of a car dealership and driving away with the car of our dreams. Cars provide us with options – be it for our leisure time or for increased flexibility in the job market. If you are desperate to be a car owner then read on for 5 tips that will help you get your car faster.

Maybe you have your heart already set on a particular model, or it’s the additional features that you simply can’t live without, or perhaps you want to save as much as possible so you can save on finance costs. Whatever your dream-car goals, saving for your vehicle of choice is the next milestone you have to meet.

The bigger your savings the bigger your down payment will be, and the bigger the down payment, the less you’ll have to borrow. This means saving on monthly payments and on interest puts you in power at the dealership and gives you the confidence to choose something you really want, not just something the salesperson is trying to convince you to purchase. To help you reach that target, read on for 5 dream car savings tips that will get you from A to B.

Ring Fence Your Savings

You need to separate your savings from your daily income and expenses. It’s all too easy to spend your savings otherwise. Set up a separate bank account or use a special piggy bank. This way you will be less tempted to use your savings for shopping or normal living costs.

Set Saving Targets

It is a good idea to set a weekly or monthly target for your savings. Be realistic, it’s no good setting a massive target if it is not affordable. If you usually have money left over at the end of the month you can set a target for this amount each month.

If you don’t have spare cash then think about some expenses that you can divert to your savings. Forgo a takeaway each week or your Starbucks habit and put this money into your savings instead. Another way to ‘find’ some spare cash is to review big periodic expenses like utility bills, insurance or gym memberships. Can you find better offers? If you can, put the money you save into your savings.

Save with an ISA

When you’re saving, it’s vital that your money is working as hard as you are. Therefore placing your savings into an ISA rather than a basic bank account is the best option for you and your money. Check out this website for the latest information on ISA transfers. These clever savings accounts mean that you can save £20,000 each year, and transfer any money you have previously saved in different ISAs without losing your tax-free status.

Also, you won’t be expected to pay capital gains tax or income tax on your savings as they grow. The right kind of ISA makes saving effortless, and with access to your account 24/7 you’ll be able to monitor your savings closely throughout the process. You’ll also be able to withdraw your money if you need to. These tax-efficient accounts help you to make the most of your money, and when you’re saving for something as expensive as a new car, you’re going to need as much support as possible.

Make your savings automatic

When moving your money into your ISA account, don’t wait until the end of the month to move your money over. Making regular contributions to your account is the best way to accelerate your savings and keep you on track. Make your savings automatic every month when you get paid to ensure your contribution is not forgotten or accidentally spent elsewhere.

Sell or trade your current vehicle

If you’re replacing your current vehicle with your new purchase, then don’t wait to sell it on. Once your savings goal is in sight, find out the value of your vehicle and sell it online or to a third party. This cash injection could be what you need to get you over the finish line. Selling your car privately is harder work than part-exchanging it but you normally get more cash with a private sale.

Final thoughts…
With the right ISA by your side and the right savings approach, you’ll be able to purchase your dream car even sooner than you thought! Consider the suggestions above to get started.