Best Ways to Save Cash for a Car (pay, financing, vehicle)
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This may belong to the Automotive section, but I am talking mostly as far as saving for a car rather than talking on specific kinds of cars.
In the future I would like to buy a fuel-efficient vehicle. Don't want to bother with financing; this time around I want to be able to buy a car in cash, with no payments and no interest. With cars being such a depreciating asset, it seems pointless to finance them at all.
So, what is the best way, or for those of you who have paid cash for your cars been able to save up for such a vehicle, say one for $25K? Did you save a monthly payment's worth for several years until you had enough to buy it, or by some other means?
Nothing feels more satisfying than walking into a dealership and handing over a cashier's check for the amount of the exact car you want, and you don't have to waste time in cubicles or playing the Atari version of 'Combat' with the finance managers. Its the best feeling in the world to have a vehicle that's paid for and no annoying notes to worry about.
Best way is to just open a high yield savings account and then transfer money over whenever you want to save up. I would WRITE DOWN your monthly income and monthly expenses. Then any money you have left over just throw it into your car fund. Not sure how disciplined you are with money but this works great for me.
Before you start make sure you have any high interest debt paid off (6%+) otherwise it is pointless to save or invest.
As for a fuel efficient car check out the new 2009 toyota prius, it is a plug in hybrid.
Last edited by killer2021; 06-06-2008 at 01:59 AM..
As for a fuel efficient car check out the new 2009 toyota prius, it is a plug in hybrid.
Great advice from killer on savings!
As for the car, if you are looking at a Toyota, go for a Corolla. The Prius gets better MPG - but you will have to replace the batteries at some point ($10,000) plus initially the Prius will cost you more just for the car. If you add up those 2 extra costs, you will be way ahead in the Corolla, even paying for a little more gas. And it's gradual, over time, too!
Of course, if fashion and status is your thing, go with the Prius. We went with the Corolla and have not regretted it for one day! Good-lookin' car, too! IMHO.
My Civic gets 35-40 miles per gallon regardless of where we drive and has 150,000 miles. The 4cyl Accord we just got gets 30 per gallon. Hardly worth it to spend the $$$ for a hybrid until the technology is fully tested by mileage and repairability figures. We just make the most of the driving we do and make sure we are not driving just to be in the car.
Savings for a car is no different than any other kind of goal savings.
Buy a used subcompact car with cash. The savings on the purchase will compensate for the higher gas costs.
You'll save about $15,000 over buying a new hybrid. It would probably take at least 10 years to make it back with the improved mileage (50mpg vs. 30 mpg) of a hybrid.
Buy a $2000 car and keep saving. When you have another $2000 or so, sell the $2000 car and get a $4000 car. When you save up another $2000 (or whatever), save the $4000 car and get a $6000 (or car value + savings) car.
There are tons of fuel efficient used cars out there.
As for the car, if you are looking at a Toyota, go for a Corolla. The Prius gets better MPG - but you will have to replace the batteries at some point ($10,000) plus initially the Prius will cost you more just for the car.
Some day in the not-to-distant future, they'll have a capacitor instead of a battery. It'll hold juice a lot longer and it charges up a lot faster. I don't know for sure if they'll be making them big enough for cars, but I don't see why not.
Develop an attitude of buying transportation not entertainment or image. Buy a used car from a salt free state. Avoid the instant depreciation. Save the purchase money in a credit union by having it deducted from the paycheck using the psycology of what you don't see you don't have. Keep credit cards empty.
I opened a savings account on ingdirect.com and named the account "Lexus". I would transfer money over to this account each month, and about a year and a half later I bought a brand new Lexus and paid for it with cash.
If you want to save a lot in relation to buying a car . . . .
Never buy the car and you will save a lot more.
Save right from the start and more additionally in every year that you do not have pay for fuel, maintenance, insurance and depreciation.
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