Tips to help you afford your dream car

To many of us a car represents freedom, some sort of adventure. And yes it's true. The ability to just up and disappear somewhere is thrilling and freeing. Still, if you take a bunch of shortcuts in getting it,  you’ll be hit with a lot of debt.

So if you are are in the market for a new car, I suggest you do your homework first and save for it.

I know that many women prefer buying a brand new car because they know so little about cars and the stress of a second hand car is just too much.

So, let me remind you that a car depreciates in value. The minute you take it to the streets, it loses it's value and it will cost you money.

In addition to the initial cost of the car, you’ll also have to pay for costs such as registration, petrol, repairs and maintenance. And yes that is true of any car you buy; regardless of how you pay for it. But if if you buy your car using a loan you inherent more debt.

So the best advice is always to pay cash for it if you can, and try hard not to finance too much money at interest on a depreciating asset.

Whether you’re saving from scratch or you’ve made a start, here are some tips to help you afford your dream car or even just one that gets you from A-B, sooner.

Know your money 
Before you start looking for your perfect car, you need to know your financial situation, i.e. how much money do you have that you can spend on the car? Having a budget will always guide you in what you can or can't do with your money.  Knowing your financial situation is very important.

Why do you want a car? 
This is very important. You might not even need a car. Or, you might need a car for a specific purpose. What ever the reason is for wanting a car, make sure that it's a good reason. It helps to think of your future. Family? Career? How long do you plan to have this car for?

Find the right car to suit your budget
With a clear idea of your financial situation and your goals, you’ll already have an idea of the kind of car you’re want to buy. Seek out multiple avenues. Shop around and compare prices of different makes and models. There are pros and cons for each, so ensure you do your research.

Check resale value 
Start looking into test driving cars. If you stay flexible you may be able to pick up a bargain from stock. Pick your options carefully. Buyers of larger cars demand metallic paint and leather upholstery, but most options add little value to a used car.  Just be sure the car meets all your needs and you are able to sell it when you want to.

How much will you need?
If you need to obtain credit to fund the purchase of the car, you should be aware that the financing offered by the dealer is often not the best deal you can get. Sometimes the dealers get paid a finders fee for recommending a specific loan provider. That fee is, of course, paid for through higher hidden costs in the terms of the loan contract. If you shop around for loans you may get financing at a much better rate.

Start saving
You’ve got all your information, now it's time to start saving. You may want to think about a savings account to specifically store your savings for your car finances. The best way will be to have the money debited from your account every month. This will make your life easier.

What to remember
Don’t forget to add in your budget ongoing costs such as vehicle registration, car insurance, servicing and mechanical repairs, roadside assistance, petrol and even etoll costs. These costs will vary between cars. Foreign designed cars may require imported parts or specialty servicing, which may be costly. Also keep in mind insurance premiums on cars will differ depending on your personal circumstances.

You can save yourself a lot of money if you know how the business works. If you take the time to understand these tips when you're buying a car, you'll likely have a lot more cash left in your wallet.

And, when you do finally get your car – you’ll be able to truly enjoy that sense of freedom of just driving off into the night for a couple of hours without worrying about debt.