Saving to buy a car

  1. Determine what you want
  2. Do it right
  3. Use common sense

For a lot of people, a car is more than a luxury; it's a basic necessity, especially for those living outside major cities.

If you think that buying a car means going into debt, think again. To find out how to buy a car cash down or with a substantial down payment, simply follow these 3 steps.

Start by taking a good look at your financial situation and keep in mind that the vehicle you're looking for must be at your service–not the other way around.

In other words, don't let the purchase of a car undermine your quality of life.

A brand new car looks great and can even make you feel good, but it's no doubt very expensive, no matter the purchase price.

The value of a new vehicle, regardless of the make, goes down drastically as soon as you take it out of the showroom and continues to drop during the first years of use.

Do you really want to pay for this significant devaluation? After all, you surely have better things to do with your hard-earned savings.

That's why, in many cases, it's a lot smarter to buy a slightly used car that's still in good condition.

Saving up a substantial down payment for a car is a good idea because it allows you to take a smaller loan. Better yet, if discipline is your middle name, you could pay cash.

All you have to do is to put aside (invest) the equivalent of an average monthly payment on a car loan, i.e., approximately $300.

Before long, you'll have a nice sum of money available to cover the price of your car.

Keep putting money aside for as long as you own this vehicle.

Save the same amount of money each month (i.e., $300) in view of your next purchase.

When you feel the time has come to part with your car, sell it.

Add the amount you'll get for it to your savings to buy a second car.

This way, not only do you avoid getting into debt, but you can also afford more recent models, if you like.