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How to Save for a Car – 6 Tips to Effectively Save for your First Car

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Buying a new vehicle is a significant financial investment. Many factors must be considered when deciding how to save for a car and which one to buy. While it is true that not everyone can own a car (that’s why there’s kuku plenty traffic in Lagos, Nigeria 🌚); and other options such as taxis, BRTs and buses are available, owning one is still fast becoming a necessity for many people. 

So how can you move from jumping buses or hitching free rides with friends to having your own ride – all without breaking the bank? Let me share some solid tips with you.

1 . Consider your financial situation and work with a budget 🗒

See, cars are expensive. The first time I walked into an automobile store to price one, I just stylishly walked out. Thankfully, I have one that works for me now.

Buying a car is not a small thing but this doesn’t mean you have to break the bank to get the car of your choice. You simply need a budget to keep you from going over your financial limit. Make a budget based on your income and expenses to determine how much you can realistically save for a car and in what time frame – 1 year, 3 years?

For example, is saving 100k per month for the next 2 years feasible?
Or are you able to conveniently save much more in an even less time frame?

Think it through and use your budget to make your decisions so you can avoid wishful thinking.

2. Differentiate between the car you need versus the car you want 😏

We all desire some form of luxury in our lives but a lot of the time, we cannot afford it yet. 😩

To know what falls under needs and wants, you’ll need a list of priorities. A car with a high safety rating, for example, is needful; but a yellow car with a hatchback may not be as important. Outlining your priorities can help you save money when purchasing a new car. Please note that a new car in this context can also be a foreign used or locally used car.

Having a list of priorities also helps you to know which features you can sacrifice and which ones are must-haves.

Now singing Peperipe Peperipepe – No Go Dey Do Pass Yourself 😂

3. Consider additional expenses 👨🏽‍🔧

If the actual cost of the car you want to buy is N3 million, keep in mind that this is only the initial purchase price.

Additional costs, such as maintenance and fuel costs, as well as insurance, are unavoidable. These costs are typically high and should be considered when making a purchase. When thinking of how to save for a car, think of one that you can consistently afford its maintenance.

4. Check out prices at several car shops 🚘

Window shop, talk to people, walk into different automobile stores, and check out their prices. 

It is extremely beneficial to visit numerous car shops and compare rates before deciding on the price of your vehicle. This helps you get a reasonable pricing range and also helps you to know your bargaining power when the time to negotiate comes.

5. Set up automatic savings 👏🏽

Once you’ve decided what car to buy based on your needs and financial ability, the next thing to do is to figure out how to get the amount needed for the purchase.

A good way to go about this is to start an automated savings plan on Cowrywise that allows you to save towards this goal. This prevents you from withdrawing your money when impulse buying strikes and you also get to avoid unnecessarily spending money that’s meant for your car.

how to save for a car

6. Go for a good deal 🤩

When you finally have the complete money and it’s time to buy that car, don’t be afraid to negotiate the price. Watch out for minor defects that might be used to negotiate a lower price. Don’t buy a car with major defects that will only cause you trouble.

Most times, Nigerians don’t agree with the first price which isn’t a bad thing; even though some people don’t like it when you haggle prices. 🌚

Conclusively…

Buying a car may not be the easiest thing to do but if owning one is a necessity to you, you should definitely go for it!

Take the first step by starting a savings plan for your new car or “baby” as some people lovingly call theirs. 😉

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