When you’re dealing with a subprime auto loan, you’ll usually need to make a down payment. Just how much you’ll need depends on the lender’s requirements and the vehicle you choose. So, how do you save for a down payment on a car?
Simple Saving Tips
The typical minimum requirement for a down payment on a bad credit car loan is $1,000 or 10 percent of the vehicle’s selling price, whichever is less. If you’re looking to match the minimum requirement – or even surpass it – you’ll need to do some planning.
Believe it or not, you can save enough money for a down payment using these five simple hacks:
- Calculate a budget – Using our Auto Loan Monthly Payment Calculator, you can estimate how much to save for your auto loan. Just plug in the estimated price of the car, interest rate, loan term, and down payment. Using this tool, you’ll be able to see how different down payment amounts will affect the monthly payment and overall loan cost.
- Skip eating out – One easy way to save money is to cut eating out. This doesn’t mean you’re not allowed to eat out every once in awhile – even skipping something like your daily Starbucks trip can save you a lot of money over time.
- Set money aside each month – This may seem obvious, but setting a specific amount aside each month can help you reach your goal. Make it a part of your monthly budget. Even if it’s only a little bit from each paycheck, a little can go a long way.
- Have a physical place to put the money – In addition to setting a specific amount aside, having a physical place to keep it safe can help. It can be tempting to spend it if you keep your money in a savings account, and having a visual reminder can encourage you to continue saving. Consider using a classic piggy bank, jar, or envelope to store the money.
- The 24-hour rule – A last tip is to use the 24-hour rule when it comes to spending money on large items. For example, if you’re thinking of purchasing the latest and greatest iPhone, give yourself 24 hours to think on it. If you think you don’t need it, or find it isn’t necessary within 24 hours, you’ll have made a conscious decision not to buy it.
Getting the Car You Need
The bigger the down payment, the less money you’ll spend on your auto loan. Having a plan in place to save money for a down payment on a car will help you in the long run. Make sure you keep up with your savings plan, and try not to tap into it before you’re ready to buy the car.
If you’ve been saving for awhile and you’re ready to finance a car, but aren’t sure where to start, let Auto Credit Express help you get started. Our service can point you toward a local special finance dealer with the lending resources available to assist people in challenging credit situations. Just fill out our no-obligation online auto loan request form to start the process today!