While many of us need or greatly appreciate owning a car – not least because of the personal freedom it grants us – there’s no doubt that it can be a very serious expense. Indeed, you might not even initially have enough money to buy a car upfront.
So, what can you do to both make and save the money that will put you in the best possible financial position to afford the car you want? Here are some useful tips.
Cut out non-car-related costs
Even before we get onto the subject of the vehicle you might buy and your options for affording it, it’s worth reviewing your incomings and outgoings that have nothing to do with driving or car ownership.
Even if your income isn’t generous, the chances are that there will be lots of ways for you to save. You might cancel that gym membership you aren’t using, stop eating out at quite so many expensive restaurants, and minimise what you spend on alcohol, clothes shopping or travel. It can all add up.
Research the vehicles that would make most financial sense
Yes, it’s dull. However, thorough research into the different new and used car models available will really help you to make the wisest decision from a buying standpoint.
This shouldn’t just be about the performance, comfort and practicality of different vehicles on the market – although for this kind of information, websites like Honest John will likely be invaluable.
That’s because you’ll also need to think about different models’ reputation for reliability, so that you can anticipate and budget for any issues that may be likely to arise. Also use the various free car valuation resources on the web to determine what a vehicle of a certain model, age, condition and mileage is likely to be worth.
Think, too, about your existing car’s likely resale value, which might effectively take a lot off the price of that new vehicle you’ve dreamed of owning.
Need car finance? Turn to a broker rather than individual lenders
Will you need some form of finance to be able to purchase a car? If so, it’s not necessarily a great idea to go to lender after lender after lender, being potentially rejected time and time again, with a succession of ‘hard searches’ of your credit file damaging your credit score.
A broker is different to a lender. CarFinanceGenie, for instance, maintains relationships with a panel of lenders, and will not perform any ‘hard searches’ of your credit file without your permission.
You simply apply online, and in seconds, such a broker can check its panel of lenders to present you with a competitive deal – and the better your credit history, the better your chances of landing a reasonable car finance deal.
One other good reason to keep your credit score in good shape is that it will maximise your chances of securing car finance with zero deposit – that is, a deal that doesn’t require you to put down any deposit whatsoever.
Learn the art of haggling
Did you know that according to research by the Money Advice Service, 64% of people who attempted to negotiate when buying a car were successful in obtaining a discount, with only 16% of those not managing to get any money off?
The free impartial website for financial advice has further in-depth information on how you can haggle for a car; in short, it’s a skill that virtually everyone can and should learn.
What are your own wishes and preferences when it comes to car buying in a financially sensible way? Do you think I’ve addressed all of the essentials for those attempting to be frugal when contemplating a new car? Are there any other pitfalls we ought to cover? Please don’t hesitate to let us know.
How to stay frugal when investing in a car is a feature post