How to Save Money for Your First Car

Saving money for your first car can seem like a herculean challenge. A car is one of the most expensive purchases you are likely to make in your whole life, so starting the process of saving can seem a little daunting.

However, you’ve got to start somewhere, and today is as good a day as any. As you get used to building your savings, you’ll find it gets much easier, and you will soon be in a position to buy your first car.

Start Small

It doesn’t matter how much you start saving with, it just matters that you take that first step. Often the first step is the hardest, and as you get used to putting money aside each month it will become much easier.

Once you see the money start building up in your account, you’ll only feel more motivated as you see yourself getting closer to your goal of affording your first car.

Cars are expensive purchases, but you’ve got to start at some point, so it doesn’t matter if you begin with small steps.

Make a Budget

When you dig deep into your finances, it’s amazing how much money you can save. We all have extra spending we know we can cut out; it’s just about identifying what costs you can cut out and which ones are essential and then being strict with yourself.

Sit down and list out your expenses and make a budget for yourself that allows you to put money away each month. Once you have a plan it becomes much easier to save money and build up your savings.

Wait Until You’re Ready

If there’s no pressing need to have your car immediately, then it’s best to keep building your savings rather than taking out a big loan that you might find difficult to pay back.

Sometimes, you will be in a situation where you absolutely need a car immediately, and in these cases, you can look to get a title loan here.

However, if you can afford to take your time, then it’s best to wait and build your savings before you make your purchase.

Build Your Credit Score

Whilst you’re saving, it can also be beneficial to start building your credit score.

Most people will need some form of financing when they purchase a car and your credit score can help determine your eligibility for a loan and the rate you get. You don’t need to do any crazy spending to increase your credit score, but it’s well worth talking to your bank to find ways of increasing it.

Financing Options

There are lots of different ways to finance your car, so it can be helpful to research the best option for you.

Different options include hire purchase, personal contract purchase (PCP), personal contract hire (PCH) and many others. By comparing the different options, you can find the financing that gives you the best rate and allows you to buy your first car without overextending yourself financially.

Thanks to Ellie