How To Afford Your Dream Car Without Going Broke
When it comes to shopping for a car, it can be an exciting and stressful experience, to say the least. You get the excitement from the thought of being able to drive off the lot in the car you’ve been wanting for so long, plus, that new car smell is mesmerizing.
The stress comes in from worrying that you may not get approved for your dream car… it’s a completely normal feeling to have but that’s why you need to get all your ducks in a row before going through the car buying process.
In fact, moneytalksnews.com talks about how the car buying process is more stressful than saying “I do.”
Aside from a house, a vehicle is more than likely going to be one of the biggest purchases you will ever make. If you take the time to properly plan and prepare yourself to buy a car, you will eliminate the stress of it all and save yourself thousands of pounds in the end. Take a look at the things you need to do to confidently walk into a dealership and know that you will get approved.
Understand & Track Expenses
One of the biggest factors of saving money is budgeting, and if you don’t have one yet, you need to create yourself one as soon as possible. If you’re not sure how to do one follow these steps:
- Save all your receipts for the month. Anything from fast-food, to gas, to groceries, hang on to every single one of those receipts!
- Add up all of your monthly expenses. Take all of those receipts you’ve held on to and add up the total amount of them all to see what your monthly expenses are.
- Create a spreadsheet that categorizes all your monthly expenses, and then you can look at your spending habits and figure out the areas you can reduce spending.
Reducing spending in certain areas can be things as simple as bringing your lunch to work every day instead of eating out, getting rid of cable, and canceling memberships that you’re not using. It’s small adjustments but they really add up over time.
Increase Your Credit Score
There are not too many people who can just buy a car outright, straight from the car dealership… with this being your “dream car.” it’s more than likely going to be quite a bit more expensive than the standard vehicle. For that reason, you’re probably going to need to finance your vehicle. Financing a new car can be a great option for driving off in your dream car and it’s also the most common way to do so but for some people, it’s not always an easy option.
In order to get the best financing deal for your dream car, you need to have good credit. If you’re in a position where you don’t have good credit, then you need to raise your credit. Your credit score has a major impact on your financing options. It directly affects your interest rates and your monthly car note. If you don’t have good credit health, you really should wait before you buy.
Add Additional Income
When it comes to being able to afford your dream car, it always helps to have a second source of income. Aside from getting a second, part-time job, one of the ways people typically earn additional income is by starting their own business.
If you’re a crafter, you can sell your wares on an e-commerce website. Or, you can sell products from drop shippers, which requires you to do very little since they will ship directly to the buyers.
On the other hand, if you are more of a “hands on”, service professional, you may prefer starting a service based business. As in your personal budgeting, you need to keep close tabs on expenses during the crucial startup phase.
Something as simple as an iCompario fuel card can help you save on fuel costs, while keeping track of all the fuel costs for your business.
Fuel isn’t the only area you save though. Be sure to shop around for the best financing rates, keep costs low on your office space, and keep close tabs on which marketing expenses generate the best returns.
If it’s your dream car you want and you want to go to the dealership with as much of a down payment as you possibly can, then you have to work for it. Think of it like this… if you’re going to work extra for it, you might as well work for yourself in your efforts.
Wait Until the Time is Right
If you try and buy your dream car too soon, you won’t even be able to enjoy it because you’ll be too busy stressing over the financials. If your credit is not where it should be, wait. If you don’t have enough money saved up, wait. And if there is no room in your budget for a car note, wait.
It may be hard to do because you have your heart set on buying it but imagine how crushed you’d be if you ended up being able to afford to make a nice down payment yet seven months later it gets taken away from you because your budget didn’t leave room for you to make any more payments on it.
This information is not to discourage you but more so to encourage you to make informed decisions about your finances and to take a realistic approach to your long-awaited dream car.