New cars don’t come cheap, and getting one if you’re not financially stable may require careful planning. Saving for a down payment offers a route to fulfilling your dreams of owning a four-wheeler, as it impacts your ability to qualify for juicy auto loans. If you’re struggling to ramp up savings fast, an online community of motorheads wants you to consider these tips when cutting back so you can own your own car.
1. Earn More
Many community members agree there’s no better way to hit your down payment goals than by earning more. One person explains, “You can make more by closing up on gigs that pay well if you have some high-income skills. If you’re stuck with the minimum wage jobs, pairing them with freelance gigs that align with your talent can fetch you some extra income.”
2. Go Frugal
When saving up for your down payment, going frugal is the fastest route to achieving your financial goals. Several respondents agree you may need to cut down on your spending in the months leading to your saving targets. One individual says to set up automatic savings so your savings are immediately separated from your expenses “before you blow it all up.”
3. Adopt Budgeting
Budgeting helps your quest for frugality. One contributor quips, “It gives you the luxury of taking charge of your spending and predicting your savings if you stay disciplined.” A second person said people can simplify budgeting by opting for budgeting apps in the app store.
4. Reduce Debt
Someone who works at a car dealership explains that even if you could save up for a down payment, high-interest debts in credit cards and personal loans would hurt your creditworthiness. “Lowering your debt-to-income ratio can improve your credit score and make your bid for a loan attractive.”
5. Shop for Good Deals
Dealerships, according to people with firsthand experience, have seasonal promotional offers that can considerably reduce car prices. If you’re short on funds, “you may want to look around well enough before settling for a dealership,” one person says.
6. Avoid Discretionary Spending
The impromptu needs will always show up, but several contributors say you won’t achieve your saving milestone if you don’t embrace the discipline to ignore them. “There will always be the extra needs or wants, but if you pay for every dime that smiles at you, your car dreams will remain dreams,” one respondent explains.
7. New Debt Is A No-No
When you’re cash-strapped and need an auto loan to land your new wheels, accruing new debts would be counterproductive to your saving goals. “Refrain from taking [on] new debts,” one person warns. “It puts a hole in your financial standing.”
8. Cut Down on Subscriptions
One forum member points out that water, light, and heating bills are unavoidable, but paying for TV subscriptions such as Amazon Prime and Netflix will hurt your saving goals. A second person adds that you’ll be motivated to save more if you observe progress in your wallet size, but spending on TV streaming and other subscriptions can deny you the bullish feeling.
9. Opt for a Cheaper Car Before Upgrading
There may be a few stops to your dream car. One individual advises you to opt for cheaper car options before getting your dream car. “You could buy a less expensive car, sign up for Uber Eats, DoorDash, Grubhub, and Instacart, take orders, and save up. You could sell the lesser choice and get what you want in a year of working, and probably without needing a down payment.”
10. Get a License
An insurance agent warns you’ll need insurance for your new car, but not having a driver’s license could spike your insurance rates. “It would help if you got a permit months before going to the dealership; it could save you a few hundred bucks in insurance,” he advises.
11. A Bike Before A Car
If you need a car for personal transport, getting a bike first while you save up might be the cheaper option. Someone advises that it also saves you from the pressure of aggressively saving up. A second person agrees that buying a bike before your dream car may be a go-to option, but he also wants you to consider safety concerns since bikes are not as safe as four-wheelers, especially in winter.