In today's society with the pandemic occurring, it can be beneficial for teens to have a vehicle for safety reasons and for the convenience of being able to drive themselves anywhere at any time. “92% of teens want to own a car” (Rocco, 2016). Here are some tips on how to save for a car and what resources are out there to assist you.
When looking for a car, you must first create a budget. Your budget determines what type of car you’ll be able to afford. Ideally, you would want to only “spend up to 35% of your annual income on a car…If you only earn $20,000 a year, it gives you a budget of $7,000” (Weliver 2021). However, if you don’t know your annual income, you could use a budget tracker, such as MINT, that allows you to “bring together everything from spending, balances, and budgets to your credit score and more” (MINT 2021) to track your expenses, liabilities, and assets. Cyan Baker, who recently purchased a car, suggests that for a car you should save a minimum “of $2,000 dollars if you want a used car with a small loan or heavily used car with no loan”. After you have found your budget, it’s now time to find your dream car.
When you begin your search, whether it’s from a dealership and or a car website, it’s smart to check out these resources. Trevor, a car guru, suggests that you “go on Cars.com, FaceBook Marketplace, etc. to find cars. Also, look at Kelly Blue Book to see if your car is being overpriced or undervalued, if it [is] undervalued, a lot of times, it could be something wrong with the car”. Saving and searching for a car can be a hassle, but hopefully utilizing these tips will help you with your car budgeting and buying process.
Be sure to also shop around for financing if you are getting a loan & build your credit BEFORE you start to plan to buy a car. Learn more at FutureFinanceReady.org - Credit Ready - Auto Loans.