Insider: How to Better Finance Your Dream Car, Starting Today

In many cases, your dream car is likely not as far out of your reach as you think. While indeed some cars – particularly vintage models in great condition – can run up into the millions per vehicle, that isn’t usually the case. For most, you can buy and afford a luxury vehicle if that is what you truly want. It will take a lot of saving, and a lot of preparation, and in some cases, you might not get the exact model that you want, but it can be done. All you need to do is start preparing today by following this guide:

Improve Your Credit Rating

Before you get excited about what car you will get, you need to first focus on your credit rating. There is so much that hinges on great credit, and you can go from being able to afford your dream car to the repayments causing you to struggle to make ends meet every month. Use your credit card more often and pay it back immediately. Take out a credit-building loan. See if you can use your rent to increase your credit that way, and so on. There are so many ways you can build up your credit, and your future will only get brighter once you do.

Save Up a Healthy Down Deposit for Your Dream Car

As you build up your credit, you will need to start saving up for the down deposit. A general rule of thumb is to save at least 30% of the price of the car. The better the down deposit, the less your repayments will be. The more expensive your car, the more likely you will need to start saving early. It could be a decade or even two before you have enough saved to reduce the repayments to an amount that you can comfortably afford, but if that car is your dream, you owe it to yourself to go after it.

Trade Up

Your previous vehicle isn’t dead weight, either. Take it directly to the dealer you are looking at buying from and see what you can get for your old vehicle in a trade-up scheme. If you want to get the best deal, of course, be prepared to negotiate for the price of your vehicle against the cost of your new one. Don’t include potential trade up value in your deposit savings, however – worst case scenario, your repayments are less than you expected.

Negotiate Down

Never take the first offer that is given to you. Negotiate. Moreover, know when to negotiate. Go in with a pre-approved loan and know what you want. Be prepared to leave and come back again at the end of the day, month, or ideally the quarter or year, when agents will be more inclined to make that one last sale.

Re-Finance When You Can

Refinancing your vehicle after purchasing it can help you lower interest rates or pay your vehicle off sooner. This is particularly useful if you already own your dream car, but the repayment rates are starting to pinch your wallet. By looking at the auto refinance rates, you can determine how and if you should refinance your vehicle to help give you more wiggle room in your budget, or, alternatively, pay it back faster and therefore for less than before.

Be patient, and save, because if your dream car is really a dream, you owe it to yourself to go after it. The more expensive, the earlier you will need to start saving and preparing, but it can be yours.