Useful ways to save up for your first car
Updated on September 17 2023
Getting a vehicle these days is already a necessity, especially after the pandemic made interactions less safe. It is safer for you and your family to go to different destinations without squeezing yourself for vacant seats in public transport and having close contact with a potential carrier of the virus. Aside from that, you can also save more time waiting for jeepneys to pass by outside your house. Thus, you can focus on more important things that matter. But, hey! Before you get excited and start looking around for your first automobile, there are some things that you need to keep in mind first.
First, buying any vehicle is not cheap at all. You will not only pay for the total price tag of the car but, you are also expected to settle other fees like the sales tax, down payment, car insurance, and monthly amortization if you will purchase the auto via financing services. Additionally, you need to keep some cash all the time in case your vehicle got in trouble while you are traveling. Because of that, it is important to be financially ready before buying an automobile. This will ensure that you can keep your vehicle in pristine condition for a long period of time and avoid facing monetary problems with the car financing company. No worries, though! We got you covered!
Set a budget
First of all, determine the amount of money that you can set for a car by going through all your monthly expenses. This includes your water and electricity bill, internet connection, house rental fee, grocery consumption, and more. If you are still paying for a student loan or have borrowed money from a credit union, do not forget to add that in your calculation.
By doing this, you will find out how much room you still have in your income for car payments. This will also guide you in searching for potential vehicles that are within the range of your budget to avoid overspending. As a rule of thumb, you should not spend more than 15% of your income on paying for an automobile.
Start an emergency fund
While it is true that no one wants to get sick in the future or got into any kind of accident, having an emergency fund will certainly help you when something bad happens.
For example, if you lost your job three years from now because of company bankruptcy or, your other source of income suddenly goes down, you can use your emergency funds to continue paying your monthly amortization for the car loan. So, even though you are struggling financially, you are assured that your vehicle will not be taken away by the bank because of an unpaid loan. On the other hand, you can also use your emergency funds in case someone in your family needs urgent medical assistance and his HMO cannot cover the entire hospital bill. Just take note that emergency funds should not be utilized for planned vacations, weddings, and buying the latest gadgets.
Avail auto-debit savings
This one is related to tip number two. In starting an emergency fund, take advantage of auto-debit savings from your bank. Instead of manually transferring money, schedule a specific date to help automate your savings on a monthly or bi-weekly basis. So, despite your busy days at work, you are assured that a percentage of your income goes to your funds, without you making so much effort.
On the other hand, in case you haven’t started any emergency funds yet, look for high-yield savings that offer competitive interest rates and low fees. Having a separate savings account from your regular payroll account will help you monitor the exact amount you can use in buying your first car. You will not also be tempted to use those to buy other unplanned expenses.
Get some freelance jobs
If your current job only pays your regular monthly bills, consider looking for another source of income. Take note, car financing companies usually require borrowers to have high salary income before approving a loan. Your checking account may not be enough to finance your car payments. Extra work will certainly add some cash for your savings.
A freelance job may include virtual work for businesses like graphic designing, web development, bookkeeping, video editing, and other things that may be relevant to your skills. You can also try selling goods online like beauty products, phone cases, shoes, watches, and other essentials that people use on a daily basis. In choosing a supplier, make sure that their products are legit and reliable to avoid getting complaints from your potential customers. Another part-time job that you can try is blogging. If you love talking to the camera and can create entertaining or informative videos, earning some extra cash will be easier through various video streaming platforms. Whichever of these jobs you wanted to do, remember to utilize your skills and the current equipment that you have. This way, you can save more money without investing in other things that you may only use for a short period of time.
Cut your other expenses
If your current income seems insufficient to buy your first car, look over your monthly expenses and see which area you can cut down completely. This does not mean that you will deprive yourself of things that can help release your stress. As an employee, you still need some leisure time. Just cut down your expenses for some unnecessary things.
For example, it helps a lot to avoid using your credit cards to purchase things you already have like a new smartphone or other related devices. Instead, focus your spending on paying grocery items, utility bills, and house rental fees. If you are not using your video streaming subscription and other apps, cancel it for a while and use the free version instead. You can also cancel your gym membership and jog around your neighborhood instead. The amount that you can save from those subscriptions will definitely help add savings for your first car.
Aside from the essential tips given above, you can also save more money if you will consider buying a vehicle in the used market. For one, preloved autos are cheaper in comparison to the newer models sold today. You can get something better at a lower price. Additionally, used automobiles are still reliable. Just make sure to bring a skilled mechanic when you meet the seller to ensure that you are getting the best, possible deal. And third, you can add more accessories or make modifications to used cars since most of them do not have manufacturer warranty anymore.
To help you find high-quality repo cars, go to any branches of Automart.Ph! There, you can search for a particular model or focus on automobiles that are within your budget. You can also browse through our online listings to save more time. With our great selection of amazing automobiles, you can certainly purchase your dream car. What are you waiting for? Call us today and take home your first vehicle in no time!
For all your car needs, i-Automart na yan!