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How To Save For Your Next Car In Waterloo

How To Save For Your Next Car In Waterloo

Buying a car is an expensive undertaking and the more money you can put down means a lower Waterloo auto loan. The lower the loan, the lower the monthly cost, which is good news for you. How to save is an important skill to have!


But how can you save money for a down payment on your next car? It’s probably easier than you might think!


Why should you save for a down payment?


There are several benefits of using a down payment to work with an auto loan.


They include:


Lower auto loan – The more you put down, the less you’ll have to borrow. A lower auto loan means paying less each month or having a shorter loan term.


Paying less interest – You pay interest on what you borrow at a set rate for the term of the loan. The lower the amount you borrow, the lower the interest amount you’ll pay. Some smaller auto loans will have higher rates than larger loans so watch out for those!


High chance of acceptance – The lower the amount you borrow, the more chance you have of being accepted. The reasons are twofold, one, lenders love down payments as they insulate them from loss. Two, they reduce the LTV, loan to value, which will often increase your chances of getting the loan.


Can overcome less than perfect credit – If you have issues with your credit score, a higher down payment can either help convince a lender to give you the money and/or require you to borrow less, which can also help them agree the loan.


How to save for a car down payment


Now we have covered the why, let’s look at the how.


Create a budget – Know exactly what’s coming in and what’s going out with a simple budget spreadsheet. List everything that goes in and out of your household and be as accurate as possible. This will help you identify affordability and areas where you could make savings.


Make modest lifestyle changes – If you identified areas where spending could be cut without impacting your quality of life, do it. Shop around for gas, check your car insurance rates, check utility rates, buy cheaper cable, make your own lunch or coffee or make other savings.


Set up automatic savings – Much like you use automatic payments for your auto loan, set one up for savings too. Identify how much you could save each month from your budget and set up an automatic payment to savings so you don’t forget.


Get a side job – Sell stuff online, work as a freelancer at weekends, become an online teacher or tutor or do something else to earn a little extra. While you will lose free time and will have to declare your earnings, you could earn valuable extra income to help your down payment.


Don’t lose heart – The most important piece of advice we can offer is to start saving and never stop. Saving is a gradual process that takes time to bear fruit. It may be tough at times and it may test your willpower but it’s always worthwhile so stick with it!


When you’re ready for a car loan, get in touch with the Waterloo auto loan experts at Northway Ford for great deals on auto finance.


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Categories: Car Loan

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