Don't we all have a dream car in mind, which we always thought of buying. While in childhood, you think of buying a Lamborghini, as a youth, you prefer Koenigsegg and by the time you are earning, you want to settle for the Ford Endeavour. You might have a budget for Hyundai Tucson, but a careful monitoring of funds and some savings can fetch you, your dream car - the Ford Endeavour (it can be different in your case).
No matter what car you chose to buy, arranging funds for the purchase is the biggest hurdle of all. The problem is, saving money is not an easy task for most of us. The good news is, you don't need to have a six-seven figure salary to save enough money to buy your preferred car. Careful monitoring of funds can save enough money, that will pave the road to buy the dream car. Here's a few tips to save money!
1. Work Backwards
Due to the basic human nature, we all approach a same goal in a different direction. Similar is the case of arranging funds for your dream car. One way is to save the money, according to the target time, one way is to save money endlessly till you get tired and buy a car and the last way is to set the goal for your dream car and work backwards to move towards the goal. A famous musician once quoted - "Musicians who aren't successful, make a huge mistake when planning the process of reaching their career goals: they design all the steps starting from where they are moving towards their goal(s)."
The problem is that it doesn't work that way. You can benefit from identifying your end goal and working backwards to achieve it. Meaning, if you know Rs 30 Lakhs is your target, it will be a more practical to save accordingly instead of saving haphazardly.
2. Trade-off your old car
So you own a car that's not on EMI anymore and looking for a new (Dream) car to buy. A good way to reduce the burden of buying a new car is to trade it off with your old car. The key is to know the worth of your car and to maintain it properly so that it can fetch a good value in the market. Try to sell your car to someone in your circle to get a good price.
Alternatively, trading it with the company you are buying your car from, is also a good option. Such trade-off fetches you a good value as compared to selling the car to a third-party buyer. Since you already own a car and commuting is not a concern, you can save desired amount by holding your car for a little while too, like for a year or two. This gives you a scope to save enough for your dream car.
3. Get yourself a lower variant
One way to ensure that you can buy the car you badly need even if you are short on budget is by picking a lower variant. Almost every car comes with multiple variant options to choose from and the gap between a lower model and highest model is staggering. We are not suggesting to compromise on basic features or safety in a car, but you can wisely opt out for features that can be added later, or you don't need at all.
One example can be the Ford Endeavour 2.2L and 3.0L. If you are short on budget, pick a lower spec 2.2L engine that is enough for daily driving. You can also opt between Manual and Automatic gearbox and can let go infotainment system or alloy wheels. This will save you at least Rs 5 lakhs as against a higher spec car.
4. Finance your dream car
Lot and lot banks and independent finance companies are giving option to buy your dream car at a very low interest rate, if you wish to opt for a finance option. Buyers have an option to select the finance amount from 10% of a car's ex-showroom price to 90% of the car's ex-showroom price and tenure from 1 year to 7 years. It all depends on how much down-payment you have and how much EMI one can afford on the monthly basis.
Also, the interest rate plays a big amount in deciding the EMI amount. The current auto loan interest hovers around 10%, depending on the bank and your CIBIl score.
5. Used car is a credible option
Last but not the least is the option to buy a used car instead of a new car. As a general trend, a car's value depreciates by 10% every year from the time it is registered. So if the Ford Endeavour is worth Rs 25 lakhs, its value after 2 years will be close to Rs 20 lakhs. Also, the ex-showroom price is fixed for any car across a region, but the value of used car differs from seller to seller.
If you know a right shop or portal, you can make hard bargain to chip-off few thousand bucks from the car's quotation. In most cases, buying from individuals is the cheapest way. Also, you need not pay the RTO tax and insurance money on the used car, saving at least 5-7% of the car's value.
We hope our feature gives you a better direction on how to buy your dream car by managing finances.