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  • December 26, 2020

Should the Price Be a Basis for Saving for Your Car?

You all know that you need to have a deposit to buy a car if you are financing it with any funding options. It needs to be at least 10%. However, the larger the deposit, the better it is because you will save more money in interest. When it comes to buying a car, you can emphasise the price of the model.

If you do not have a larger deposit, you may intend to buy a low-price model. Even if you get a deal at affordable interest rates, car loan repayments are the second most expensive after a mortgage. Therefore, you must be buying a car that you can afford.

The car's price serves the basis for the decision whether you should invest in that or not most of the time. The price is lower, so you think you can save a lot of money. Of course, you will buy a car that fits in your budget, but you need to look over your overall affordability. Several other factors decide whether the car will cost you a fortune or not, for instance, insurance cost, fuel economy, and the like.

For instance, when you buy a new car, you will have a warranty for a couple of years to cover maintenance, but this will no longer be an option if you are buying a used car. As a result, you will likely end up spending more than you thought.

Fuel efficiency

Fuel efficiency is one of the significant factors you need to consider while buying a car, regardless of the model. Many people acquiesce to the cheap model, knowing that they are not fuel-efficient as other car models. Fuel-efficient vehicles can cost you high, but they give better value than cheaper models because you will be saving €1,000 for every 10,000 miles covered.

This is why you must focus on buying high fuel-efficient cars. Since they are a bit more expensive, you should start saving money as soon as possible. Try to have a larger deposit, so you do not need to fund a large portion of the cost with car finance in Ireland.

Insurance

When it comes to saving on insurance cost, you need to think carefully about the model you will buy. Expensive cars usually include costly repair work, and hence coverage cost is generally higher than is the case with affordable cars. Further, it depends on the type of coverage you want.

There are usually three types of coverage; one of them is known as comprehensive coverage that includes all kinds of damages, including the damage to your own car. However, third-party coverage will cover losses to other vehicles and injuries to other people. It excludes any type of damages to your car and you.

The third type of coverage includes losses from theft and fire, along with third-party coverage. Compare the cost of insurance from different companies to choose cheaper coverage. If you have not made any claim, do not forget to avail yourself of no-claim bonus. It can result in saving of 10% of the insurance cost every year. It means if you have not made any claims for five years, you will save half of the cost.

Car loans

The best thing is to pay for your car outright because you can save money in interest, but most people rely on auto loans to buy a car. If you are funding your vehicle, you will pay more than the car's market value. Therefore, you should have a larger deposit.

You should aim at the down payment about 20% of the value of the car. However, you will save more money if you take it to 40%. If you cannot arrange a 20% deposit, you should either seek a cheaper model or wait until you can save that much. However, if you have decided to pay for the car outright and your savings have fallen short, you can take out 24 hour loans in Ireland.

When it comes to saving for a car, it is not just the market value you need to focus on. Like insurance cost, fuel efficiency, and car loan, several factors can help you save money in all aspects. You just have to do it.

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