How to save for a new car

Buying a new car is one of the biggest purchases you’ll make in a lifetime, and with supply shortages driving up prices, it’s more important than ever to strategise on how to save up money for a car.

The process of saving for a new car requires discipline, and while it can be a significant challenge, there are a number of money-saving tips you can use to save and purchase your dream car.

With that in mind, we’ve put together a helpful guide for those looking to save money fast for a car, including everything from savings tips to saving money on your specific choice of vehicle when you’re ready to buy.

7 Tips for Saving For a New Car

Let’s jump into seven of the most effective ways for you to maximise your savings for a new car, and then wrap up with some ways you can save some serious money when you’re ready to buy.

1. Set a Savings Goal

One of the most immediate things you’ll have to understand when saving up for a new car is to familiarise yourself with the goal.

Having a firm savings goal helps psychologically when it comes to firm budget-setting, and will inform your market research of the best possible vehicles in your price range.

It’s important to factor in not only the immediate and upfront costs of the vehicle purchase, but also the additional expenses and running costs for things like insurance, registration, fuel costs, maintenance and repairs.

2. Research the Market, Compare Models and Individual Variants

An informed purchase of a new car requires you to do some market research, even if you’ve got your heart set on a specific make and model.

In a competitive landscape, car manufacturers are constantly trying to outdo the competition and win over buyers with certain features, attractive ownership programs and fuel-efficient engine tech, which is worth considering well ahead of your purchase.

If you’re not budging on your choice of vehicle, have a closer look at the line-up and decide which features are a must-have, and which features you might be happy to sacrifice in order to step into a cheaper model variant.

3. Get Money Smart and Start Practicing Good Savings Habits

One of the biggest parts of this process is practising some good savings habits, which are small in isolation but add up to significant savings over time.

While this may include some sacrifices over time, getting smarter with how you use your money is one of the best ways to save for a new car, and there are some helpful services out there to help you out.

Lean on a budgeting app to help you map out your expenses and identify any new avenues for savings, and consider moving your paycheck from a transaction account to a savings account immediately.

4. Explore Secondary Revenue Streams and Opportunities

If you have a lofty savings goal, exploring other means of income - aside from your primary job - will help to fill your savings bucket significantly faster for that new car.

Thankfully, the gig economy has made some of these more accessible than ever before.

Consider things like renting out a spare room, or even a garage space, finding some additional casual or part-time work, selling some unneeded items online or even trying to monetise a passion or hobby of yours.

5. Sell, Rather than Trade-in Your Old Car

One of the most significant bumps to your savings effort for a new car will be the day you sell your old car.

While trading-in is the most convenient means of upgrading to a new car, dealer trade-in rates are often lower than the market value of the vehicle, which means you stand to make more money selling it privately on the second-hand market.

Before you sell, make sure to clean and detail the car inside and out, and make any visual or mechanical fixes that might impact the resale value; a few hundred spent here can add thousands to the market value of your second-hand sale.

6. Research Your Finance Options

Getting the best finance deals often translates to thousands of dollars saved over the course of repaying your loan, which makes researching your finance options a top priority.

Considering that the best rates, loan terms and most borrowing power are available to those with the best credit scores, taking some simple steps to improve your credit score - like paying off any existing debts - can open up more competitive finance options for your purchase of a new car.

7. Be Patient

We know the allure of a new car is tempting, however, being patient and waiting for the right time to make your purchase can save you thousands on a new car.

We’ll cover this in more detail in the next section, but it’s worth taking note of the fact that new car prices do indeed fluctuate, particularly at certain points of the year, which is where and when you can capitalise.

How to Save Money While Purchasing a New Car

If you’ve got your heart set on a specific make and model of a new car, there are a number of steps you can take to save money on the purchase. This includes things like:

• Compare the Range: Sometimes, the base model of any given vehicle gains all the important hardware as the range-topping models, offering a great and affordable entry point into that model, and saving thousands over the mid-to-high range variants.
• Keep an Eye Out for Plate Clearances: Dealerships will often reduce list prices for older stock to make way for the latest model year.
• Waiting for EOFY Sales: Some dealerships are incentivised to clear out stock at certain times of year, particularly as you approach the end of the financial year.
• Opt for Last Year’s Model: As we’ve mentioned, when new stock arrives at a dealership, they’re more likely to budge on price for a previous model year vehicle, which offers potential savings.
• Use a Car Broker Service: Utilising a car broker service offers huge potential savings on a new car purchase, who can often leverage their bulk-buying power to purchase a vehicle at a more competitive rate than you’ll negotiate yourself at the dealership.

Need some help saving up for your new car purchase?

We’re well aware of the fact that saving up for a new car is a massive challenge, which is why we’re here to find some of the most competitive rates for a new car loan to get you into your dream car quickly.

With no ongoing fees, fast online applications and low-interest rates, we aim to make car financing easy and pain-free.

Apply online today or chat to one of our friendly lending specialists who can help take the hard work and stress out of the process, managing your application quickly and easily over the phone.

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