Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Money Smart Tips for Buying Your Dream Car
Moneymagpie Team
11th Jul 2024
Everyone has a dream car, but it’s far from possible for most considering the price tag of top-tier vehicles. Buying one is mostly a matter of making wise money decisions. You wouldn’t want to spend most of what you earn on a single vehicle, but you just have to look for alternative ways to finance your dream car.
It remains close to achievable when you develop a money-saving mindset and nurture an attitude anchored on keeping your finances in check. Whether it’s going to be your first car or you’ve realized it’s time to move on from your current one you can buy your dream car when you follow these essential tips:
- Define your dream car and describe your financial situation
- Open a separate savings fund for your dream car
- Consider getting a car loan from a credit union
- Give up on other luxuries
1. Define your dream car and describe your financial situation
The first thing you will have to do is to determine if you’re in the best condition to purchase a top-tier vehicle. This would mean knowing how much it would cost you and if the car suits your needs. Be practical when setting a goal because you wouldn’t want to purchase something that won’t add anything to your life. It’s also important to figure out if your current financial situation allows for you to buy your dream car.
2. Open a separate savings fund for your dream car
When it comes to saving money for a luxury purchase, you will need to develop a sense of discipline and discernment. It would work well for you if you open up a savings account separate from your main account. On top of an emergency fund and your retirement savings, setting up another account helps you fund your purchase without affecting your overall financial health.
Once you have set this up, you should determine how much of your monthly earnings should go towards your dream car. Depending on the price tag of the vehicle and your timetable, consider setting aside 3% to 5% monthly. It may take years before you can afford the purchase, but at least you still have money to spend for life’s uncertainties.
3. Consider getting a car loan from a credit union
Your dream car may cost millions and it would take you forever to cover the full sale price. But if you’re committed to the goal, you can reduce the financial burden by borrowing money to cover the partial amount. You can reach out to a credit union for car loans if you need extra cash to add to the money you’ve saved for the purchase. Just be sure to get loan terms with lower fees and advantageous interest rates.
4. Give up on other luxuries
Taking on the road to owning your dream car requires a great deal of sacrifice. However, the work could be a lot lighter if you give up on unnecessary expenses. You need cash for food, rent, and utilities, but you can always do well without spending on streaming subscriptions, dinner dates, and luxury clothes. Opt for cheaper alternatives or look for the best deals on luxury products and services. You can then redirect the money you will be spending on expensive leisure towards funding your dream car.
Endnote
Your dream car may cost thousands if not millions of dollars, but so long as you use the right money-saving strategies, reaching the goal in no time is guaranteed.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
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