Updated January 4, 2022 . AmFam Team
Your dream car is out there, waiting for you. It’s a noisy marketplace, so planning and focus is a must when car shopping. Whether buying a van to haul the kids or a two-seat convertible for cross-country road trips, our checklist can help you save for your dream car.
Maybe you need 4-wheel drive and a tow package to haul a boat. Or you want seat warmers and navigation. Use the list below to help determine what you want in your dream car. From there, you can start saving up.
Found your dream car? Make sure you can drive it off the dealer’s lot by watching this video to see which items to bring with you.
This step is crucial for budgeting for a car. Knowing your budget will allow you to plan for how long you’ll have to save up in addition to how much to save for a car.
First, get a copy of your credit report to confirm there aren’t any credit issues you should clear up. Typically, the better your credit, the better your interest rate. Then, get pre-approved financing from your bank, credit union or online lender. It could make it easier for you to negotiate with dealerships, since you’re a cash buyer. You can always check later to see if the dealership’s financing provides a better interest rate.
Based on your preferred price tag and wish list, find three or four vehicles that fit the bill.
A short test drive is a first step, but you’ll want to know more before you buy. Most dealerships let you take an extended test drive — some even allow overnight use.
Budgeting for your car is more than just saving up for the cost of initially buying it. You’ll need to take into account any monthly payments you’ll be responsible for if you’re financing or leasing.
There are a few other expenses to take into account when considering your budget, including:
Car insurance is almost always required on a financed or leased car before you drive it off the lot, so be sure you know your dealership’s, bank or leasing company’s and state’s requirements for insurance. This will inform your budget because you may be required to purchase certain coverages that can add up to a steeper monthly bill.
Check with your insurance agent to see what kind of discounts you might be eligible for when buying car insurance for your new or used car.
Now that you know what kind of car you want and how much it’ll cost you to own and maintain it, it’s time to start saving. We’ll go through just a few of the many ways you can start saving for your car.
Keeping your goal in mind is the first step to saving up for your car. By sticking to your budget, you’ll stay on track to buy your first car. Here are some tips to help you save money:
By saving at least 20 percent of the price of the car for your down payment, you’ll have a lower monthly payment and typically qualify for lower interest rates. Remember: price isn’t the only negotiable thing. You can ask for a better trade-in deal or interest rate, too.
Buying a car is just the first step in the long-term process of owning one. Remember those budget considerations you made earlier? Stick to them — they’ll help keep your overall budget on track and keep you from overspending.
Now that you have a plan to buy your dream car, there’s only one more thing you’ll need: car insurance. We can help with that. Connect with your American Family Insurance agent (Opens in a new tab) to get a quote and help protect what matters most.
Looking for more tips and car-buying resources? We have plenty more where that came from! Check out all these resources for expert advice, and detailed steps to make purchasing your dream car a reality.
This article is for informational purposes only and includes information widely available through different sources.