How To Save Money For Your First Car – 6 New Ideas

There are many ways to save money on your first car

But all of us are not aware of them

And so they end up buying their car that give them a grief

There is no exception for me too

I bought cars before where I admit I made a mistake buying them

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how to save money for your first car

That's why I liked the idea of documenting how to save money for your first car

Let's begin with the following

Decide whether to buy new or used cars

Do you have any idea if you want to buy a new or used car?

A friend of mine cannot imagine buying used cars

She believes used cars are not reliable no matter what

For myself, I bought once a new car and I had to pay a monthly loan for 5 years

Anyway to save money on your first car you have to know the difference between used and new cars

For buying new car, you have the following advantages

  • First few years, you will save money for your new car without any repair only the regular oil and filter maintenance
  • New cars save money on gas as they are fuel efficient
  • Most new cars come with road side assistance

Buying new car has the following disadvantages

  • They are very expensive
  • You lose up to 15% when you drive it out of the dealership
  • If you buy it with a loan, you can end up paying a monthly loan for 7 years so you accrue a long term debt
  • New cars have high premium on insurance

For buying used car, you have the following advantages

  • You can get the best value by looking around and buy used car with less mileage and cheap price
  • They are cheaper and so you can save money on your first car and avoid falling in debt by paying a loan
  • If you buy it with few kilometers you buy it with steep price
  • You would be able to negotiate a better rate on your insurance premium

Buying used car has the following disadvantages

  • Used cars come with mechanical issues and inevitable maintenance
  • You need to be very careful and experienced buyer to find a reliable car
  • Financial responsibility to buy your used car with saved money or with using a low interest line of credit like HELOC

Shortlist your preferred car models

Are you buying a car for yourself or your family?

If it is for yourself, you can look for mini, compact or even SUV

It doesn't make sense to buy a van if you are the only one driving it

When it comes to the car model

Should you buy Japanese, Korean or American car?

In my opinion, I always buy Japanese cars but I am wrong

The right approach is to look for cars that have the best reviews

Just go to Google and search for “car reviews”

Estimate properly your budget

Buying a new car is not the end of the process

You are starting an entire new recurring spending on gas, insurance and maintenance

I was not able to save money on my first car, I bought a used Mazda MPV

Yes I admit I made all mistakes combined in my first car purchase

First, this MPV consumes a lot of gas around 6 kilometers per liter

Second, it is high on insurance premium I didn't know why?

Third, it is a seven seats while I was single when I bought it

Fourth, I started repairing my MPV after 6 months

Don't commit my mistake, do your due diligence and ask for gas consumption, expected insurance and possible maintenance and repair

Stick around your budget

If you want to save money on your first car then you must stick around your budget

I mean if you're looking for used car for $7000 and you find a good used car for $7,400

It doesn't make sense to avoid it because it is out of your car budget

That's what I meant by sticking around your budget

So what is sticking to your budget mean?

Simply, if you go for an extra 15% for less than $20,000 and 10% for more than that then you can find suitable car and still pay around your budget

Be flexible with which car to buy

I learned this lesson after making 2 mistakes buying the wrong cars

What I mean here, if you are looking for Japanese cars

Be open for checking reviews for other non Japanese cars

Who knows, perhaps you can buy American car with high positive reviews

I used to be very stubborn and never think about buying non Japanese cars

While I experienced myself friends and relatives using car models I have never thought to buy and they are working great

Check other factors for your desired car

To save money on your first car then it is not about the car itself

There are so many factors you have to consider like car insurance

Where it can be for so many reasons like one car is so popular

And so its insurance is high due to this car has high accident rate

Also, few cars consume gas higher than other

This means you have to know the consumption on high ways and cities

Another factor is maintenance and repair like some cars have certain defects that you have to change a spare part after specific mileages

While there are cars that cost lot of money when doing specific maintenance

I remember paying a lot of money when changing my spark plugs on an old car

Because my mechanic had to take off the engine to replace spark plugs

Buy at the right time

Cars sales fluctuates during the year and you can see a price drop at year end

So weather impacts sales of cars as cold weather defers people from buying cars

Keep in mind most car salespeople have quota to meet

If selling cars are not going well, price will go steeply down to encourage people to buy

Michael launched Wealth of Geeks to make personal finance fun. He has worked in personal finance for over 20 years, helping families reduce taxes, increase their income, and save for retirement. Michael is passionate about personal finance, side hustles, and all things geeky.