Tips For Saving For Your Next Car

January 31, 2024 by First Federal Bank

car-1Whether you have your eye on a new or used car, its price is probably much higher than it would have been a half-decade ago. Vehicle prices have soared in recent years and don’t appear to be settling back down anytime soon. This is making it harder for shoppers on low or even moderate incomes to afford the transportation they need.
What can you do if you need to buy a vehicle that’s beyond your current means? Here are some tips for saving you can increase your buying power. You can even use these suggestions to stretch your middling budget to cover your dream car:
Be thrifty
Another way to avoid paying full price for items is to shop for used goods at thrift stores, consignment shops, Facebook Marketplace, or on eBay. Everything from toys to clothes to kitchen appliances to furniture to hardware tools can be purchased pre-owned.
Get creative in how you replace expenses with cheaper alternatives. Make your own iced tea or cold coffee at home instead of buying pre-packaged bottles from the grocery store. Or, skip soda pop in favor of tap water — it’s free!

Cut unnecessary expenses
Start with a budget and track your current spending habits. Assess every expense and determine if it’s absolutely necessary to keep. Even small recurring expenses can add up over time! Seek cheaper alternatives such as using the library instead of a streaming platform, packing meals instead of eating at restaurants, and skipping the big coffee chain in favor of at-home java. This is also the perfect time to quit smoking, playing the lottery, or drinking alcoholic beverages.
Look for discounts
Try to avoid paying full price as much as possible. Seek out discounts and shop around for the best deals instead of doing all your shopping at the same store. This involves monitoring the prices of products before you buy them — and then buying a bunch when they’re on sale. Buy generic off-brands instead of paying for premium brands with name recognition. And don’t forget how effective extreme couponing can be!
Make sure you join any customer loyalty rewards programs at the stores you shop at, and ask the cashier if they give special discounts for seniors, students, teachers, military personnel, or AAA members.
Sell your extra stuff
How much clutter do you have in your basement or attic that can be purged while making an extra buck? Sift through your belongings and get rid of anything you don’t need by selling it at a yard sale, through a consignment shop, on eBay, or at a store that trades items like media or clothes for cash.
Store your savings in a high-interest account
There are easy ways that you can stretch your savings fund instead of letting it stagnate. Discuss the possibility with a representative of upgrading your account to a high-yield savings account. If you’re not in a hurry to buy your next car, put some money in a short-term CD so it can accrue interest over the next 12-18 months.
Take a staycation
The bills for a vacation add up quickly — traveling, lodging, meals, admission costs, and more. Consider making your next getaway one in your own backyard. Find hidden and unique things to do in a nearby town that you haven’t explored yet.
If all of these methods still aren’t multiplying your savings fast enough, you have other options that are more drastic. Consider a strict spending freeze or even getting a side gig for additional income. Reassess your target price point and determine if you can settle for a vehicle that’s older, has more miles, is smaller, or has fewer bells and whistles.

Categories: Financial Education

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