How to Save and Set a Budget to Purchase a Vehicle
The Express Lane Blog
Purchasing a car is a major financial undertaking for most car buyers — especially those with bad credit or no credit history. If this applies to you, and you are looking to buy a reliable new or used car, it may be a good idea to create a solid budget and savings plan before you jump into the car-buying process.
Here’s how you can do that:
- Review your current expenses.
Evaluating your monthly living expenses (i.e. mortgage or rent, utilities, student loans, cable and Internet, etc.) can help you determine how much of your residual income can be allocated towards the cost of a new or used vehicle.
- Calculate how much you have for a down payment.
Once you’ve reviewed your expenses, you can zero in on an affordable vehicle price range and calculate how much you may need for a down payment on a car.
- Set up a car savings account.
Putting money aside in a separate fund will help you maintain discipline while saving for a car.
- Limit unnecessary spending.
Cutting down on “wants” and reducing the amount you spend on miscellaneous costs such as happy hour dates and social outings can help you save more money towards your car fund.
- Sell or trade in your used car.
Out with the old, in with the new. If you’re replacing an old car, you can use the money you receive from selling or trading it in towards your next car.
Currently saving up for a car but need credit approval? A dealer enrolled in the Credit Acceptance auto finance program can help. Just fill out this secure form on our website to get started!