The New Year is a great time to buy a fresh car, setting you up for the 12 months ahead and getting rid of your old, unreliable vehicle. Coupled with a new job, longer commute if you’ve moved house or are expecting a child, upgrading to a bigger or different model may be unavoidable. Whether you’re thinking about a new or used vehicle the following budgeting advice can make sure you can afford your new car.
Set a Timescale
Saving up to buy a car in cash rather than on finance offers the main advantage of not having to pay any interest. While you will be hit with the costs of depreciation, depending on the age and type of car, this may not be too large. Start by working out how much you will need to save in total and by what point, then you can create a timescale to put aside a certain amount each week or month. Be realistic, as too high a savings target can have a negative impact.
Start Investing Your Savings
One way to boost and speed up your savings is to use a savings account. Depending on how long you’ve got and when interest is paid, it can be worth placing your finances in one to see them grow. Even if you only earn around £100 in interest by the time you have to buy your new car, that’s still £100 off the price.
Have a Cost-Effective Christmas
The festive season is a time of high-spending and overindulgence, which can make saving difficult. However, as so much money is spent it does provide opportunities to cut the costs of Christmas and still have a fantastic time. From giving homemade and charity gifts to using supermarket stamps, finding deals on presents and switching to cheaper alternatives, you can have a cost-effective Christmas and save more towards your new car.
Choose an Economical Car
When it comes to actually choosing the car you’re going to buy, remember all the other costs. These include fuel, repairs and maintenance, insurance and tax. It may be worth seeking out a highly economical model (even an electric or hybrid), which will keep the costs down. This way you might not need to save up as much in the first place.
Search the Deals
Winter is traditionally a quiet time for dealerships, which means many are willing to offer more deals than usual. Especially in the run up to new number plates in March, it can be a good time to grab a bargain. Be on the lookout both on and offline and you will hopefully stumble across a deal that requires a lower budget.
Budgeting for buying a car in the New Year and starting out in a good financial position is achievable with these tips.