Thinking about buying a car? Read this.


Did you know that there are a number of different benefits to saving for a car – both financial and non-financial? 

If you really work towards it, saving up for your dream vehicle can help improve your mental and emotional health and your relationships with your loved ones. 

If you’re desiring instant gratification from that new or new-to-you car sitting in your driveway, it may not seem worth it to save up for it. 

But…when you recognize how incredibly rewarding it would be to have that car sitting in your driveway with NO payments (or a very low payment if you choose to finance it with a larger down payment), you may think again before hitting the car lot just yet! 

Non-Financial Benefits of Saving Up for a Car 

Picture this: You head into the car lot, knowing exactly which vehicle you’re looking for. You know how much that vehicle is worth, and you’re clear on what you’re willing to spend to get that vehicle. Most importantly, you’ve already saved the money, and you’re 100% ready to purchase. 

You take a test drive, talk price with the salesperson, and after some back and forth, you can agree on a price that’s within your budget. You pull out your checkbook with confidence and write the check for the cash price, paid in full.

Then you get in the car and drive off into the sunset with zero debt and zero stress about having to foot yet another bill each month!
As you’re imagining the above scenario, think about how you’d feel if this actually happened to you in real life.
I think you would feel confident, accomplished, and at peace, with far less stress and overwhelm around how this purchase will impact you financially in the long run.

And if you’re married, I think it would help take the pressure off your relationship and bring you closer to each other as you share the joy of achieving this dream together. 

The peace, joy and happiness that you and your partner could feel after saving for a car and paying for it in full – those are benefits checkbooks and calculators can never measure!

Financial Benefits of Saving for a Car

While the non-financial benefits of saving for a car are immeasurable, there are also certain substantial financial reasons why you should consider saving for a car.

Again, picture the scenario above. 

Because you’re a cash buyer (or, at a minimum, you have a large down payment), you would also be able to enjoy these additional advantages:

  • You have negotiating power: This means you can talk the dealership down on the price of the car and save some extra money! 
  • You will pay zero interest: If you pay in full before you drive off the lot, you’ll never have to pay a single dollar in interest for the entire time you own the car.

Note: If you are paying a large down payment instead of in full, you’ll still be able to have a lower car payment and pay the car off faster to get rid of that payment sooner rather than later.

Simply put, the more you save NOW toward your future car, the less you’ll have to borrow later!
And…now on to the best part –
If you had no car payment each month and could invest that money instead of sending it to the lender, you’d have compound interest working in your favor.

For example, say you have an extra $600 to invest every month because you don’t have to send that money to a lender. 

If that investment only makes 8% each year for the next 10 years, you’ll have over $108,000 dollars!! 

Isn’t it crazy that you could come out with over six figures in just 10 years if you can commit to this discipline needed NOW to save for a car?! 

How Much Do You Need To Save?

For starters, if you’re determined to pay in full for the entire car and drive it off the lot debt-free, then you need to know how much your car will cost.

Do some research now on the best vehicle for you or your family.

Keep in mind that used cars, in general, will give you the best bang for your buck! Doing your research on the most reliable, used cars that will last you the longest with minimal repairs will serve you very well financially over the long haul.

Once you have a target amount, divide it by how many months you want to save for and turn that into a concrete goal. Not to mention, as you get windfall money here and there (through bonuses, a tax refund, or anything else) and add it to your savings, you’ll reach your goal much faster. 

For example, if you want a $20,000 car and you can save $600 a month, then it will take you 33 months to save for it. 

But if you get a $5000 tax refund plus a $5000 annual bonus, then you’ll only have to save for 16 months. And that’s only if you don’t add anything extra. Something tells me you’re going to “find” some extra money to add to that and make it happen MUCH faster!

Where Should You Save?

Once you have your savings goal in place, the next thing you need to figure out is where you want to save this money. To answer this, ask yourself the following question:

Which is that one place where this money will be safe and “untouchable” for you?

  • You could open a separate savings account to earn a little interest along the way. 

Look into an alternate bank or credit union different from what you currently have to make it less tempting for you to withdraw easily. Remember, you’re committing to not withdrawing that money until you’re ready to purchase your car!

  • You can also save in cash. 

I had one client couple that kept savings envelopes in their fire-proof safe and added money to them each month. That works fine too!

If saving for a longer period of time, you might wonder whether you should invest the money.

In general, you’re not looking to invest if you’re saving for less than 3-5 years. Your investment could go up in that time, but it also could go down. If you will need that car in less than 5 years and the investment goes down, you won’t have enough to pay for it.
Just save it in a safe, stable place for this purchase. 

How Can You Save Faster

33 months, or even 16 months, can seem really far away, especially when you’ve been eying something new for a while. 

So how can you save for your car faster?

Your challenge here is to “find” any extra money you can along the way. I’m always amazed when clients start doing this and make incredible, quick progress toward their goals.

  • Can you get overtime through your job? 
  • Can you work your side hustle a few more hours?
  • Do you have some things you can sell? 
  • Can a spouse go back to work part-time? 

There are multiple ways to “find” some extra money to hit your car savings goal faster and more efficiently. 

Once you decide to put in some extra money to reach your goal faster, you’ll start noticing how many such opportunities come your way. Make sure you seize the right ones and put in the work!

Staying Motivated

When you’re saving for something over a long period of time, it can be hard to keep yourself motivated and stick to your savings goal.

Here are some ways in which my clients keep themselves motivated on this journey: 

  • Celebrate the larger milestones along the way. For example, once you’ve saved the first $5000, take some family time to do something different and fun to celebrate. There are many free and inexpensive ways to celebrate your commitment and hard work! 
  • Use visuals. Think of the thermometer fundraiser chart where you color in along the way. Once it’s all filled up, you get to buy your car!

There are so many more fun visuals out there now besides the thermometer or savings jars. Do a quick Pinterest search to find your own. Or you can simply print a picture of an outline of a car and divide it into sections for you to color in as you go! 

Through it all, keep reminding yourself of that feeling of absolute joy and triumph you’ll feel when you pay for your new-to-you vehicle and drive it off the lot with peace, knowing you made a wise financial decision. If you can keep this thought front and center, you will be able to save for your car and feel great for years afterwards!
So are you ready to accept this challenge? Tell us in the comments why you’re committed to saving for your car and how you plan to go about it. We LOVE celebrating wins with others committed to being wise with their money! 

Remember, every household is unique. You may have other variables to consider for your decision-making process. If you need additional support or accountability to prepare for your car purchase, consider meeting with a financial coach who can help you assess your situation and find solutions that work for you. You can book a free coach match session with The Accountable Network here




About the Author

Heather Oynes is a money coach for women and couples, helping them bring their personal and business finances from chaos to order.

She loves taking a Biblical approach to managing money and showing others how to practically apply it to their unique financial situation. Ultimately, she helps you de-stress your money and go after your God-given dreams with a personalized, doable action plan for your finances that will set you up for a lifetime of stewarding your money well.

Heather resides in Texas with her husband and three rambunctious sons, including a set of twins.

Stay connected with news and updates!

Join our mailing list to receive the latest news and updates from our team.
Don't worry, your information will not be shared.


50% Complete

Two Step

Welcome to the Accountable Network Blog!

We'll keep you posted when we release new content.

Provide your name and best email below.