(Newswire.net — November 19, 2019) — The Australian car market has been growing at a rapid pace since 2011. According to carsguide.com.au, there are about 775 cars for every 1000 people in Australia, with the market for luxury cars growing at a much more rapid pace than other auto segments. What do these numbers mean to you?
It simply means more people are saving for their dream car and you can too, without sacrificing your life savings. Here are some tips on how you can do that.
Decide what you want to buy
The first step to saving towards any goal is to have a target. In other words, you should know how much is your final target. The answer to this question would depend on many factors such as the car you want to buy, how much down payment you’re willing to put, the prevailing auto loan rates, and more.
But before that, decide on what car you want to buy. If you don’t have a specific brand or model in mind, consider browsing through sites that compare the features of different car models. You can also lookup studies and reports related to Australian research on new car prices to get an idea.
Make an estimate
Once you decide what car model and make you want to buy, the next step is to decide your down payment. As a ground rule, aim to put in about 20% of the total value of the car if this is something you can pull off. If 20% seems too much, opt for anywhere between 10% to 20%, but never go less than 10%. You may even want to revisit your car model and make if you think this will be too much of a burden for you.
Have a plan
Now that you know how much you should save and by when, start making a plan. Look at your monthly expenses and see where you can reduce them. Be realistic with your estimates and make sure it doesn’t impact the money you put down for other things such as your kids’ college tuition or your retirement. Over and beyond these regular expenses, look at some of the recreational expenses that you can maybe cut down for a few months until you reach your goal.
In general, spend money only on your needs and not for your wants and direct the excess towards your new car’s fund.
Automate your savings
One good option is to set up an automatic savings account and move a certain amount of money directly from your checking to a savings account. Set up automatic transfers if that works better for you. There are many different savings accounts, with some of them giving a higher rate of return than others. Look at different options and see the one that best fits your needs.
Sell your old car
If you plan to sell or trade your old car that can ease your burden a bit as you can put the proceeds from it towards the down payment of your new car.
Thus, these are some of the ways to save for your dream car without sacrificing your life savings.