What are your New Year’s resolutions for 2020? Are you going to live a healthier lifestyle? Or maybe you’re going to re-do your financial plan and put more money in your savings account. But you could also do the opposite—you could shell out cash on your dream car.
Now that the roaring twenties is back, there’s no better time to bring your dream car to your driveway. It might be easier than you think to hop in the driver’s seat of your most-desired vehicle, even if you’re on a low budget. Follow these tips and learn how you can afford the car of your dreams in 2020.
Shop for a Car Loan
Unless you’ve got a substantial amount of money saved up, you probably won’t be able to afford your dream car without an auto loan. The quality of your auto loan depends mostly on how high your down payment is. A high down payment will give you a more favorable interest rate, while a low down payment will probably result in a higher interest rate. You always want to get an auto loan that has the lowest possible interest rate.
To find the best auto loan, shop loans at different banking institutions, and don’t forget to look into a credit union auto loan—credit unions typically offer better terms and rates. Whenever you make inquiries about getting an auto loan (called a “credit inquiry”), your credit may drop by a few points. Make sure that you make all loan inquiries within a 2-week span so your loan shopping will only be counted as a single inquiry.
If you’re going to buy a new car, you might want to consider dealer financing. Remember, dealerships are soon going to be stocked with lots of 2020 vehicles, which means that they’re going to give huge discounts and finance specials on brand-new 2019 vehicles. You have an opportunity to save big on a new car in the early months of 2020.
Buy a Used Car
If you can’t afford your dream car brand-new, you could buy it used instead. In fact, you might have to buy your dream car used if your dream car is a vintage vehicle.
It’s important to remember that a 2017 or 2019 vehicle will have many of the same driving components and amenities as the 2019 or 2020 version, so you won’t be downgrading very much, if at all. And if you seek a vehicle that’s only a few years old, it’s probably not going to have logged very many miles.
Always remember to do a pre purchase inspection on the used car before you buy it. An auto mechanic will be able to tell you if there’s any hidden damage that could seriously affect the safety, comfort, and functionality of the car.
Lease a Car
A car lease is one of the best ways to bring home your dream car in 2020, while only paying a fraction of the cost for it. It works just like an apartment lease—you lease a brand-new vehicle for a predetermined amount of time (usually 1-3 years), and you pay by the month. When your lease expires, you can re-lease a newer vehicle, or you can purchase the vehicle outright. The only catch with a car lease is that you can only drive a minimal number of miles each year.
If you’re going to bring home your dream car in 2020, you may need to put more money in your pocket. One of the best ways to do this is to downsize your lifestyle—in other words, cut your expenses by a wide margin. There are a few different ways you can do this:
- Live with roommates so rent and utilities are less expensive
- Cook food at home instead of eating out
- Do calisthenics exercises at home and cut your gym membership
- Cut any expenses that aren’t absolutely necessary to your lifestyle
If you’re able to cut all those excess expenses from your budget, you’ll have much more money to make a down payment on an auto loan or to pay your loan and lease payments.
Make More Money
Last, but not least, you can make your dream vehicle more affordable by boosting your income. For lots of people, this is going to be the most practical way to make their dream car their real car, but it’s also the most difficult to do. Here are several ways you can develop a passive income:
- Invest in the stock and bonds market (also a great way to save for retirement)
- Invest in real estate
- Start a side hustle—there are lots of different ways to make money in your spare time; this is the “gig economy,” after all
- Sell anything you don’t need, like old belongings or even your old vehicle
These passive income strategies will also help you keep your finances fresh throughout the year.
The car that you fantasize about doesn’t have to be a far-off dream! If you follow these tips, you can bring home your dream car in 2020 without completely breaking the bank.