How Do You Save Money for a Car?


Quick Answer

To save money for a car, an individual should calculate how much he can spend on a car payment, how much of a down payment he can afford and determine when he would like to buy a car. It is a good idea to have money directly deposited into a separate saving account.

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Full Answer

In addition to a monthly car payment, an individual should also factor in the cost of insurance, the car title and any extra fees there might be when initially buying the car. Anyone who desires a low monthly insurance premium should consider putting as much money toward the down payment as possible. Interest should also be factored in while calculating the total monthly payment. Special Internet calculators can be used to figure out how much the insurance payments will be for a specific vehicle.

An individual who desires to buy a car as soon as possible has to save up money faster than someone who doesn't mind waiting to purchase a car. Waiting to purchase a car can be easier on finances than devoting every penny toward the purchase.

Having money directly deposited into a special savings account is an easy way to save up for a car while taking care of other financial obligations. Direct deposits can also remove the temptation of spending the required money.

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