How to Save for a Car in 90 Days!

Ubers, buses, carpooling, oh my!  You don’t have to tell us that not having a car is inconvenient.  The constant expense and unreliability of public transportation can really take a toll on somebody… If only there was a way to know how to save for a car quickly, easily, and stress-free!

Well, the good news for you is, that’s exactly what today’s post is all about!  Say goodbye to the inconvenient days of waiting around for costly Ubers and hello to independence.  After you read this guide, you’ll see exactly how to save for a car and become a better budgeter overall!

How to Save for a Car in 8 Simple Steps

1. If you currently have a car, figure out what it’s worth

If you already have a car but want to upgrade/trade-in, this is where your car savings plan should start.  Why?  Because that’s valuable cash you could be sitting on!  Obviously, if you don’t already have a car or another form of transportation to sell or trade, skip this step.

But, regardless of whether you plan on trading it in at a dealership or selling it independently… You need to know what it’s worth.  That way you’ll know how much money you already have for your car without doing any other saving or earning.

How to check your car’s value:

■ Go to www.KellysBlueBook.com. 
■ Click “My Car’s Value” and fill up the needed information.

Pro Tip: If you plan on selling the car independently, then likely the price you see is the price you can get.  (We recommend setting the asking price a little higher so there’s wiggle room for bargain hunters.)  

On the other hand, if you plan on trading in at a dealership, knock some dollars off that price.  Sure you can bring in your Kelly’s Blue Book printout for proof of what it’s worth.  But a dealership is usually a big corporation with lots of leverage.  On average, a dealer will give you 80% of your car’s worth minus another $500 for sale preparation. I.e. Necessary cleaning and repairs.

2. Decide on a general price range for the new car

In order to know how much you need to save, answer these questions:

■ What type of car are you looking for? 
■ New or used? 
■ Two-door or four-door? 
■ Four-wheeler?  Electric?  Manual or automatic?

You get the point…

Basically, once you know the general type of car you want, you can better know what it will cost.  And, therefore, prepare an accurate and realistic car savings plan.  

Plus, whatever the price tag of the car is, add another $1,000 or so, just to be safe. Remember that cars, especially those from dealerships, have a lot of hidden fees.  These includes:

■ License plate registration
■ State inspection
■ Sales taxes
■ Broker Fees

Look up these fees as they apply to your state and add them to the final price if necessary.  Because the last thing you want after making a thorough car savings plan is a shocking final price!

3. Figure out what monthly car payment you’re comfortable with

If you’re planning on buying a car in one payment, good for you!  The only monthly car payments you should keep in mind are car insurance, gas, and oil changes.

However, if you plan on financing your car, you’ve got one more monthly payment to keep up with.  As a rule, experts advise spending no more than 15% of your monthly income on a car payment. 

(Just like you shouldn’t spend more than 30% of your monthly income on housing… But we address that more in this article: 8 Effective on Tips How to Save for a House.) 

Either way, if you plan on financing a car, it’s time to start crunching the numbers.  

4. How much will you need on hand the day you purchase the car?

If you are buying your car outright, without a payment plan, then you already figured this out in step 2.  Just make sure to add in those unexpected after-costs like vehicle registration, state safety inspection, and taxes.

However, if you are financing a car, again, your car savings plan will be a bit more in-depth.  As a general rule, you should aim to make the biggest down payment possible when you buy.  Remember, that a car finance plan is a debt with accruing interest.  Therefore, the more you pay now, the less you pay in the long run.

Additionally, experts say that if you’re financing a new car, put down at least 20% of the car’s value.  If it’s a used car, then at least 10% down.

5. Implement the 50/30/20 Budget

Okay.  So steps 1-4 got you thinking about how much money you’ll need to make your car dream come true.  Now comes the exciting part- figuring out how to save for a car in 90 days!

The 50/30/20 budget, which we also went over in our 21 Ways to Save Money on a Tight Budget post, is a budgeting technique recommended for everyone!

Of course, our reason for bringing up the 50/30/20 technique now is to apply it to your car.  Your monthly car payments and maintenance should comfortably fit within the 50% “needs” budget, along with housing and utilities.  If it doesn’t, bump the extra over to your 30% allocated to wants.  If you’re not interested in dedicating your “want” budget towards car payments, then it might be time to research a more reasonably priced car.  

Additionally, during this 90-day car savings plan period, you’ll want to cut down on those “wants” overall.  Stop the daily Starbucks runs.  Stop buying new clothes.  For the next 90 days, that “want” budget is 100% for your car down payment.  

6. Make your car savings plan automatic

Probably the best way to save for anything without feeling limited is to make the savings automatic.  Either through your employer’s direct deposit or your bank, make 30% of each paycheck automatically go to savings.  And, better yet, make separate and new savings account just for your car savings plan.

Then your car money pot will grow all on its own, without even a second thought from  you!

7. Make some more money

Can’t save enough money in order to get your car in 90 days?  Then it might be time to consider making more money.  Whether or not you live in California, some of these online side hustles we found recently might work for you. 8 Legit Work from Home Jobs in California 

Other possible side hustles are selling old belongings online with apps like Poshmark, Ebay, Mercari, LetGo, or Facebook Marketplace.  You can even consider offering some local businesses your freelance services on a temporary basis.  Such as online marketing, social media management, product photography, copywriting for their website or client email list, etc.  Get creative!  It’s only for 90 days, and keep the huge payoff in mind: a new car!  (…Or at least new to you!)

And remember… Every dollar earned through these side hustles should go into your car savings account that we discussed in step 6!

8. Still leave room to treat yourself!

Yes, we did just talk about limiting your wants and getting a side hustle…  But, we also know that saving money can be hard!  It can feel extremely limiting if you are used to a more carefree lifestyle.  Therefore, you can still plan on *reasonably* treating yourself so you stay on track.  But, what exactly do we mean by this?

Once a month, give yourself a $30 or so “treat yourself” moment.  Perhaps this is for lunch out, a new makeup item, or a day outing.  Whatever it is, it’s something to look forward to and reward yourself for sticking to your car savings plan.

Remember as well, that fun can also be free!  Invite friends to your house/apartment for homemade dinner and a movie.  Meet at a local park and walk around.  Savings doesn’t always have to be constricting!

…But, if you feel like it is, post a photo of your desired car in your bedroom mirror.  Then, every morning when you wake up you’ll see your goal and will stay inspired to stay on track!

How Much Should I Save for a Car?

There is truly no one simple answer to this question.  Everyone is different in terms of their financial situation and car desires.  But, even so, we will list out possible expenses so you can best figure out your own personal car budget!  

We also encourage you to check out www.nadaguides.com.  This website allows you to get a baseline idea of the price for your desired car make and model.

■ Buying from a Dealership Vs Directly from the Owner

When you buy from a dealership, even a used car, automatically add $2,000 to the car’s value.  These are what’s known as “dealer fees,” and obviously, they’re a bit pricey.  However, with them comes peace of mind.  This car has been mechanically checked, cleaned, and can even be returned within 30 days if it fails.  Obviously buying directly from an owner is more cost-effective.  But, unless you have a car mechanic’s knowledge, you can’t guarantee that the car’s in working condition for the long-term.

■ Financing Vs Buying Outright

If you are financing a car from a dealership, you’ll need a certain amount of money on-hand. Experts recommend 20% for a new car and 10% for a used car, to put down on signing.  Whereas if you’re buying a car outright, you’ll need 100% of the car’s price tag at signing.  Plus state inspection fees, cost of the license plates, taxes, etc.

■ Extra Expenses

Don’t forget the regular month to month car maintenance expenses a car owner is responsible for.  Such as car insurance, gas, and oil changes.  This varies from car to car and should be kept in mind upon purchase.

■ Trading-In a Current Car

If you’ve already got a car to trade-in, that’s money you won’t have to worry about making or saving.  For trade-ins, dealers typically pay 80% of the car’s value minus $500.

Saving up for a Car: The Car Calculator

We know, we know.  There’s a lot to consider when learning about how to purchase and how to save for a car.  Luckily, on top of our own advice, we have some online tools for you as well!  These three calculators below are free and designed to help you figure out how much your desired car will cost.

■ The Cars.com Auto Loan Calculator allows you to see what it costs to loan or lease your desired car.

■ Bank of America’s Affordability Tool helps you estimate your monthly car payment, if you are hoping to finance.

■ This Money Under 30 Affordability Calculator also helps you figure out what you can afford to pay for a car.  To calculate, it uses your annual income and preference to pay via financing or cash.

In Conclusion…

We know it can be a little overwhelming to figure out how to save for a car in 90 days… But, it’s certainly not impossible.

It all starts with figuring out your monthly income and necessary expenses.  Once you know that, you’ll see how much money you can contribute to your car savings account instead of “wants.”  It might take a little bit of sacrificing and a few extra hours at work, but it will be worth it when you have a new set of wheels!

But enough from us, now we want to hear from you!  Have you recently saved up for a car?  What was your experience?  Have any advice for first-time car owners?  We’d love to hear all about it in the comments below!

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