How do people save up/pay for large purchases like a car?
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We usually use a combination of savings, profit from shares and wages to make the purchase, so that we don't dig too deeply into our core savings. we've also used interest free offers from sofa companies and credit cards whilst we have saved up the money required. we've never taken on debt that costs money to pay off each month (except for the mortgage). how do other people approach this?
Answers (7)
In the same manner as you have but dont take on too many purchases that run together.
I also follow a similar approach, when I bought my most recent car, I saved for 8 months or so before buying without borrowing. I personally try to keep my credit card and borrowing for the major unexpected expenses...
One successful formula is to save from wages (maybe £100 per month) over a period of 3 years, selling assets at a profit such as shares and payments from share dividends, selling other assets via online etc and using some savings but not too many.That is how my siblings do it.
Sacrifice and discipline are the keys to achieving the large buy purchases. I bought my car on 0% finance deal. I paid about £4,000 upfront and then had affordable monthly payments for three years. This came out of my monthly wage and was all carefully budgeted. I was surprised how quickly the three years passed and how I didn't 'miss the money' and so at the conclusion of the car finance agreement, I kept up the same deductions into my savings account and this built up quite a fund that enabled me to purchase other 'big buys' without having to resort to borrowing.
What a great achievement we did that with a sofa we bought - we didnt miss the money so at the time i continued to save it.
I like the idea of carrying on saving the money afterwards
We bought our car on 0% finance. We put money up front from our savings to help lower monthy payments. Friends of mine remortgaged their house for home improvements and took a little extra out and bought a car!
I put down about £3000 and had the rest over 3 years interest free, finishing this month. It's just a shame my Amex credit limit wasn't enough for the deposit as I was on a decent cashback rate at the time!
We bought our car about 9 years ago...we borrowed money from my father in law which was interest free and over 3 years.
I saved for the car i have now and went around in an old banger until i had the money
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