Deciding when you’d like to buy and how much you’d like to spend on a car can put you in the driving seat.
Creating a plan to buy a car could help you to make the right decisions when deciding how best to save.
Think about:
- How much do I have to save to buy the car I want?
- How much can I afford to save and how often?
- Do I lock my money away or do I need access to it fairly quickly?
Think about what is practical for you and the amount you’re likely to be able to afford for a car. Also consider the costs of insurance, vehicle tax and any parking arrangements you’ll need to pay for as part of the overall budget.
Easy access savings
You might want to move money around to make the most of interest rates or withdraw some to pay for bills or make a purchase. If so, you'll need an account that gives you access to your money.
Fixed term savings
When saving up to buy a car you might want to consider a fixed term savings account in order to earn as much interest as you can. This could take away the temptation of withdrawing your money before you’ve reached the end of the term and increase the likelihood of hitting your target.
Look for fixed rates of interest from ISAs and bonds for a defined period of time (term).
Whatever your savings targets and how you choose to save, look at all of your options before deciding on which options are right for you. If you’re in any doubt you might want to seek the advice of an Independent Financial Advisor.