It’s no secret that buying a new car can be expensive. In fact, according to Forbes, the average price of a new car in 2017 was over $33,000. But just because something is expensive doesn’t mean it’s out of reach, especially if you’re willing to save up and look for deals. If you’re on a budget but still want to buy a new car, there are plenty of ways to make it happen. By putting in the time and effort now, you can find enough to be able to afford a new car on a budget. Here’s how…
1 – Take out a personal loan
While you don’t want to buy a new car if you can help it, taking out a lending product like a personal loan is one of the best ways to finance your purchase. Unlike other financing products like credit cards or car loans which make you pay interest on your purchases, personal loans are paid back with fixed payments at set intervals over time, allowing you to pay back what you owe. For example, if you want to take out a personal loan with sg.lendela.com, it comes with low-interest rates and allows the entire purchase price of the car to be covered. Depending on your credit, most lenders will let you borrow up to $40,000- which means that you could use the entire remainder of your down payment on a car with cash leftover!
2 – Buy during special sales or events
This is just one of the sneaky ways to save money on your car. Car manufacturers hold several different promotional events throughout the year, most notably “Black Friday” and “Tax Season”. If you can plan ahead, buying during these times puts you at an advantage because it increases the likelihood that your desired model is in stock, which means you’ll get to buy it without tax added on. Even if the sale only saves you $50 or $100 a month, when it comes to financing a car purchase, these amounts can add up quickly. So keep an eye out for sales and keep your eyes peeled early; the less time you spend searching for a car, the more time you’ll have to save up for your down payment.
3 – Compare your purchase price with your insurance rate
The cost of insuring a new car isn’t cheap. The national average annual premium is $1,510 at least. If there are some cars out of reach due to their insurance rate, look for a car with a competitive insurance rate and make the sacrifice on the model itself.
4 – Get an extended warranty on all your future purchases
While you can’t buy a new car right now on every budget, that doesn’t mean you should give up entirely. Purchasing an extended warranty not only covers repairs to the vehicle in the case of an accident but also covers any engine issues. Depending on your warranty provider and the amount you’re willing to put down every month, an extended warranty can cover up to 100% of your car purchase.
5 – Put your savings into high-yield savings accounts
By putting your savings into high-yield savings accounts, you can ensure that the interest you accrue on top of your payments can be as high as possible. By setting up an automatic monthly withdrawal, you’ll never even notice the money missing from your checking account- and that’s a good thing! While it might not seem like much now, if you do this for several years it could add up to thousands of dollars in interest- and that makes a big difference when it comes to financing your car purchase.
6 – Forgo the fancy features
One of the first things people think about when buying a new car is all the bells and whistles they want on their ride. But what many don’t realize is that these bells do nothing for resale value, meaning that if you’re ever stuck in the position of having to sell your car quickly, you’ll have a hard time getting rid of it. Instead of buying a home entertainment system or putting new rims on your car, invest that money into something with a better return on investment, like paying down your debts on credit cards. This way you can pay off the loan quicker.
Financing a car purchase doesn’t have to be difficult, especially if you plan ahead. By taking advantage of manufacturer sales events, comparing insurance rates, and getting an extended warranty on your new car, you can make the process much more affordable. And don’t forget to put your savings into high-yield accounts, this will help you pay off your loan quicker. When it comes time to buy that new car, remember these tips, and you’ll be driving in no time!