For many people, their first big purchase is their first car. You need a vehicle to get to work or school, but you’ll probably have to save for quite a few months before you can actually afford one.
Luckily, Payactiv provides the tools you need that can help you save for this major financial milestone. From budgeting for your car to setting a monthly savings goal and beyond, we’ve got you covered.
Before you can budget for anything, whether it’s groceries or a new-to-you car, you need to understand how much you spend on a monthly basis. As a Payactiv user, you can easily view your past spending habits using the SmartSpend tool in-app.
Knowing what you spend gives you an idea of how much you have (or don’t have) left over every month. You can evaluate each spending category to see where you can cut back, giving you more room for savings.
Once you know how much you spend every month, you should know how much you can afford to save towards your goal of a new car. This number may also represent how much you can afford in monthly payments if you need to take out an auto loan.
You can set aside your savings automatically by using the SmartSave feature in the Payactiv Visa® Card and save up to $10,000 using this method.
When you’re purchasing a car for the first time, it’s important to remember that the car itself isn’t the only cost. For example, depending on your state, you’ll also incur:
If you’re financing your vehicle, there may also be origination fees, so you’ll need to save for more than just a down payment. Sometimes, these fees might be rolled into your loan in the form of a higher APR.
Before applying for any loan, you must ensure your credit is in good shape. The lower your score, the higher your interest rates will be.
If your credit is less than perfect, you can work with a KOFE financial coach for free as a Payactiv user. Try to build your credit and save for your goal simultaneously. Repairing or building credit can take some time, so you don’t want to wait until you’ve reached your savings goal to get started.
Now that you’ve saved up all the money and accounted for all the costs, it’s time to go shopping. You have a monthly budget in mind regarding what you can afford in car payments, but be careful to also keep the vehicle’s sticker price in mind.
Car dealerships may ask you what your monthly budget is, then use that to sell you the most expensive vehicle possible. They do this by spreading your monthly payments out over a longer term, such as 84 months instead of 60 months. This lowers your monthly payment, but since you’re paying it over a longer period of time, you’ll pay more in interest over the life of your loan.
Once you have your car and paperwork in hand, you’re almost ready to go! However, before you can legally hit the road, you’ll need to budget for auto insurance. This cost varies greatly by state or even locality.
To find the best rates on vehicles in your area, compare quotes from multiple insurers. You can shop for the lowest rates within the Payactiv app as a Payactiv user. This way, you can rest assured you’re getting the best deal as the rubber meets the road.
There is a lot that goes into saving for your first car, and completing all the steps can be overwhelming. Payactiv can simplify the process with our financial wellness tools. Let us help you start your journey to car ownership today by downloading the Payactiv app.
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* The Payactiv Visa Prepaid Card is issued by Central Bank of Kansas City, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Certain fees, terms, and conditions are associated with the approval, maintenance, and use of the Card. You should consult your Cardholder Agreement and the Fee Schedule at payactiv.com/card411. If you have questions regarding the Card or such fees, terms, and conditions, you can contact us toll-free at 877-747-5862, 24 hours a day, 7 days a week.
** Central Bank of Kansas City is the issuer of the Payactiv Visa Prepaid Card only and does not administer, endorse, nor is liable for the Payctiv App.
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