How Much Should I Save to Buy a Car?

May 20, 2017

You’ve decided you need a car, but you can’t afford one right now. The car must be reliable, affordable and stylish. Your first step toward saving is to determine what type of car you want and what dealership to purchase your car from—this will help you decide how much you need to save.

Paying Cash:
If this is your first car, it might be wise to look for a cheap and dependable used car. If you save between $1,000 and $3000, you can often buy a reliable used car, though it will mostly likely be an older model, prior to 1999, with lots of miles. A savings between $3,000 and $5,000 can help you to purchase a newer model used car that is often in excellent condition. New model used cars are between 1999 and 2007. If you purchase a brand new car, it will cost over $10,000, so financing your car is best.

Most people can’t afford to pay $10,000 cash for a brand new car, but they still want a new car. Financing your car is an excellent idea, and it is not as hard as you think. How much money should you save before financing your car? Most people feel embarrassed when they are talking to the car salesman and they want more money then expected. Car dealerships require 20 percent down payment of the new car cost. For example, the new car cost $15,000, so you would pay $3,000 for the down payment. A new car has additional cost that will be added to the final payment amount—taxes, car insurance, added features and other cost. The suggested savings amount is $5,000 for financing a brand new car.

Quick Money Savings Tip For Safe Drivers

There are dozens of auto insurers – Which one will give you the best rate?

Step 1) Choose your vehicle make below.
Step 2) On the next page, complete the 4 minute questionnaire, and you'll have the opportunity compare the best rates in your area.
Step 3) Keep more money and possibly save hundreds!

1 Choose a make for potential car insurance discounts:

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