How to Save for a Car: Smart Strategies for Financing Your Next Ride

Outlook Business Desk

Calculate Your Budget

To buy a car, calculate your budget, save at least 10-20% for a down payment, and consider credit score and debt-to-income ratio. Account for extra costs like taxes and insurance, use high-yield savings, automate savings, and update your budget

freepik

Down Payment

If financing, aim to save at least 10% for a used car and 20% for a new car. For cash purchases, save the full amount upfront

freepik

Credit and Debt-to-Income Ratio

Your credit score and debt-to-income ratio impact loan terms. A higher credit score can secure better interest rates, while a lower score or high DTI may necessitate a larger down payment or lead to higher monthly payments

freepik

Consider Additional Costs

Be sure to account for additional expenses like taxes, registration fees, insurance, and possible maintenance costs when budgeting for your car purchase

freepik

Earn Interest on Savings

Consider using a high-yield savings account to earn higher interest rates, helping your savings grow faster

freepik

Automate Savings

Automate your savings by setting up automatic transfers, ensuring you consistently save toward your car purchase goal

Update Your Budget

Review your budget to identify areas where you can cut expenses, such as reducing discretionary spending or paying off high-interest debt, to save more effectively

freepik

India's Ministry of Labour to Roll Out Social Security Scheme for Gig and Platform Workers

Read More