Having enough money for a down payment is important for car buyers. It not only makes auto loan approval more likely but also prevents the ‘upside down loan’ scenario, wherein the individual owes more than the vehicle is worth. If you are planning to buy a car soon, you should get started on preparing a down payment. Most lenders here in Atlanta require a deposit before financing a vehicle. Here are some tips that can help you come up with the money necessary for your auto purchase.
The best way to come up with a down payment is by saving. Set aside a particular amount each month to fund your future auto purchase; if you want, you can do it weekly or bi-weekly. Open a separate savings account for this purpose so that the money for the car don’t get mixed with money to be used for other purposes. To guarantee that you wouldn’t be able to spend the money allotted for the down payment, opt for an automatic electronic transfer through your bank or credit union.
Before you open an account, shop around for the best rates. Pick an account that offers the highest interest rate available so you can further build your car fund.
Reduce monthly expenses
To save more money for your car down payment, try to cut down your monthly expenses. Start with utilities. Reduce water and electricity consumption by changing habits. Turn off the faucet when brushing your teeth. Take shorter showers. Turn off the lights when not in use.
Proceed with evaluating other utilities, such as cable, cellphone or Internet plans. See if you are able to fully utilize the services or if you are paying for more than you use, then make adjustments as necessary. Do the same thing for insurance.
Food is an essential expense every month, but you need not spend a fortune on it. Learn how to shop smart to get more savings, which you can add to your account. Ways you can cut your monthly food expenses include eating out less often and using coupons when grocery shopping.
Cut back on unnecessary expenses
To free up more cash that you can add to your down payment fund, look at your expenses and see which items you can do without. Do you really need to buy your coffee at Starbucks every morning? Should you continue the subscription to the magazine you don’t really get to read? There will always be expenses you can remove from your budget. All you have to do is look closely at your spending.
Sell some belongings
Surely you have possessions that you no longer need or want. In order to get rid of these and get money for your down payment, sell these. You can either sell your belongings by throwing a garage sale or by selling them online through either Craigslist or eBay. The money you make from the sales would be a welcome addition to your down payment fund, or a great starting amount if you haven’t saved any money yet.
Get a second/part-time job
Having another source of income would help immensely not only with the down payment but also with loan approval. Extra income makes you more qualified for an auto loan. Working just a few more hours a week can boost your down payment fund considerably. You might even have enough cash to spare for future car payments.