A lot of petrol heads have a vehicle that haunts their dreams. The one they would love to get behind the wheel of.
However, one of the things that makes it a dream car is the fact that it seems out of reach. Changing that involves a combination of saving and sound financial planning.
Knowing what car you are aiming for and working out a strategy is how you turn dream to reality. Read on to learn more.
Create Your Financial Plan
The best place to start is by creating a plan of action. That means researching your dream car cost, so you have a clear goal.
For most people, building up cash in a savings account will be the next step. The process of saving money will almost certainly involve making some sacrifices though.
Study your outgoings per month to find expenses that you can live without. It might be membership of a club or gym, or streaming subscriptions, but if you really want that car something else will have to go.
Once you have cut back on costs, you can deposit a set amount each month into a separate account. This will enable you to follow the timescale set out in your financial plan.
Of course, financing the purchase is also an option. That will still mean saving, but does reduce the initial cash outlay.
Financing means that you pay part of the cost of the car at the outset and then the rest over an agreed time period. The initial payment is most often 10% or more.
Your credit score may be something you want to look into, this will affect the way in which you pay for your car. If you choose to buy your dream car on finance, your credit score, if bad, may affect your ability to get a payment plan.
Whether you apply for a loan from a bank or finance company, or agree the terms directly with the car dealer, financing can be a way to get your dream car more quickly. Pay close attention to potential financial pitfalls like the interest rates being offered on the loan though, to make sure you do not get burned.
Look around to secure financing on terms that you can manage.
Remember the Additional Costs
Even your dream car will bring additional costs that you must bear in mind. Once you have bought it – either using financing or by paying in cash upfront – you will have to pay for its maintenance.
That includes regular servicing, buying petrol, oil, and other fluids plus replacing parts that are damaged or worn out. Everything from the car battery to the wheels and the tires will need to be replaced at some point.
The key thing is to keep those expenses to an absolute minimum. If you treat the car well it will need less maintenance and replacement parts can be funded cost-effectively through things like no hidden fee tire finance.
Choose the Right Car
Yes, it is supposed to be a dream car, but there is little point in buying a vehicle that is totally impractical for your needs. For instance, if you hope to make the sort of cash that will let you buy a house in the country; a sports car will not be a very suitable choice.
Equally, if you see it as a potential investment that can be sold for more money than you paid at a later date, you should factor in depreciation when buying. Some cars that look like a dream just go down in value over time.
Other matters to take into account include the affordability of the insurance, particularly if it is a rare model, and how much the fuel will cost you. For instance, Supercars is a dream choice for many but are also infamous for guzzling fuel.
Your research and budget should include the initial purchase outlay but also all of the ongoing costs in acquiring that longed for car.
There is a lot involved in buying the vehicle of your dreams, but if you are smart it does not have to stay just a dream.