With the average household debt of Brits hitting the £15,000 mark it is no wonder that people are starting to tighten their belts.
What happens when you need a car, however? That can be a very big expense that could add to that debt very easily.
Here are some tips to stay on budget when you desperately need a car.
1 – Pay in cash
It may seem counterintuitive to pay out a huge sum of money in cash for a new car, but it does save money in the long term.
Everybody knows that cars depreciate in value considerably and paying interest on something that loses its value is not sound financial planning.
By paying cash upfront, you save thousands of pounds over the lifetime of the car.
2 – Time your purchase
As a dealership is taking on the next year’s models, they need to make room on their lot.
This means that at the end of the year they are marking down last year’s models and in some cases the year before. To make room on their lot, they will try to price their older inventory low enough to sell quickly.
Take advantage of this by waiting until the end of the year to not only take advantage of the sales price but also to bargain aggressively.
3 – Lease to own
Though car leasing may not be the way to save money long term, it may free up some much-needed cash for your month to month expenses.
Considering the debt most families are carrying, the monthly expenses can certainly add up and saving a few pounds by leasing may be what you need to get through some lean times for a couple of years.
4 – Stick with the basics
Most car dealers will be very aggressive in trying to get you to pay for add on options when buying a new car.
Be firm and try to not waiver when they put a hard sell on you to opt for unnecessary options.
Adding upscale trim or pinstripes does nothing for the value of your car. And most high tech add-ons will likely be out of date in just a few years.
Stick with the most basic version and save thousands.
5 – Go small
A nice shiny SUV may be tempting, but the small commuter car that sips petrol is actually what you need.
Most people are not using their cars to travel more than a few miles from the home to work so it ends up being wasteful to buy more car than you actually need. Take stock of how you plan to use your car before deciding on which kind you want so you can more accurately see what it is that you need.
Not only will a compact car cost less to buy, but operating it also saves money over the long term. Bigger cars like SUV’s are terrible on petrol and cost more to insure in general.