If you are thinking of buying a new car, you may be wondering how you will pay for it. While we completely understand that money can get tight, anyone can save for a new vehicle with the right plan in mind. Here are a few practical guidelines to help you afford that new set of wheels.
#1 Stick To The Plan
Before you even dip your toe into the waters of buying a new car, you need to make sure you are in the right mindset for saving properly. Make sure you put back a certain percent every month, regardless of your current financial situation or current spending habits.
Do you really need that new pair of shoes? How many times do you plan on eating out this month? The more you drift off the plan, the longer it will take for you to save for your dream vehicle.
Remember: Saving doesn’t have to be stressful. To make it easier on yourself, you can even set up recurring automatic transfers from your checking account to your savings account on a certain date using your mobile app or online banking. This way, you won’t be mulling over the numbers every chance you get, and saving will become automatic. Now, the real question becomes, how much should you put back?
#2 Calculate Your Payment
Before you accidentally get yourself into a hole of debt, you need to determine how much you can actually spend each month on a car loan. To make things easier on yourself, work with one of our personal loan officers to help set the bar right from the onset. Outside of monthly payments, you also need to decide if you will take out a loan or pay for the car in full. Either way, you will need to start saving now.
If you are buying a car using monthly installments, you will need to calculate your down payment. To get the most accurate estimation, you can work with your loan officer, but if you’d like to get a general idea now, you can start with an online car loan calculator. This will, at least, get you in the ballpark so you can start making the right decisions from the beginning.
Finally, when calculating your savings plan, you need to determine how soon you need the vehicle. According to Auto Trader, you should expect to save around 10% of the overall value of the vehicle for your down payment. The sooner you need the vehicle, the faster you will need to save the down payment. This means you will need to put back a higher percent each month for a car you need in 2 months versus a car you need in 6 months.
When A Plan Comes Together
Are you ready to purchase a new vehicle and need financing to do so? Mercer Savings Bank offers competitive rates and personalized service. We have a fast loan process and easy payment methods. Talk to one of our experienced loan officers today. Call 877.672.4543, contact us online, or visit the auto loan page of our website to learn more.