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How can I save up for a car?

Saving up to buy a car can involve planning and adjusting your spending habits. Whether you're buying a brand-new car or an older model, building a strategy to save money for the car’s down payment will benefit you and your budget.

Why save up for a car instead of relying entirely on a loan?

Your future car is a depreciating asset: decreasing in value by 10% as soon as you drive it off the lot, even though what you owe on the car (your liability) remains the same. By paying more of your car’s down payment upfront, you can shrink the size of your auto loan and reduce your monthly car payments.

Paying a down payment makes your car loan smaller and will mean lower monthly car payments in the future, including fewer interest charges over the life of the loan.

How to save up for a car

Choose a car and see how down payments affect monthly payments

First, research the cars you like and highlight a few models that advertise financing options that meet your monthly budget. Use our Auto Loan Calculator to enter the full cost of the cars in your price range to see the monthly payment options (which will depend on how long the loan lasts and your credit score range). Now change the price of the car by subtracting what you think you can raise towards a down payment. How do the monthly payments compare with and without your down payment?

Start a car-savings fund with Autosave

With a number in mind for your down payment, you can create a car-savings fund to help you manage the money you save and track your progress toward your down payment goal.

To save money and get closer to your goal, increase the amount you save every week and lower your spending. If you automate a minimum payment to your savings account with every paycheck, you take out the temptation to spend elsewhere and you can also know exactly when you'll hit your target.

A simple way to build automated savings towards a goal is with Chase Autosave. With easy ways to move money regularly from a Chase checking account into a Chase savings account, Autosave also allows you to build goals for your savings. Applying a goal for a car down payment can keep you focused on your new car, while Autosave makes sure your budget remembers your bigger goals.

Consider additional expenses

Remember that the car you buy will come with a sales tax and fees, and will start up costs for insurance payments, maintenance, and gas money. Account for these extra costs when figuring out how much you need to save up for this big purchase.

Best ways to save for a car

Budget and cut expenses

Sticking to a monthly budget will help you save up for a car more quickly. Keep track of your expenses and income, and create a plan to improve your spending habits each month. The 50/30/20 rule is a popular budget method to follow, and entails spending 50% of your monthly income on essentials, spending 30% on non-essentials, and designating 20% for your savings.

You can decrease your spending on non-essentials such as entertainment, going out to eat, and monthly subscriptions, and put this extra money into your car-savings fund.


You can start saving money automatically with Chase Autosave. Autosave allows you to set goals for how much you want to save over a time period and automatically transfer money from your Chase checking account to your Chase savings account. If you decide you want to save $40 each week, you can set Autosave to transfer that amount into your savings weekly. You can also choose to transfer a portion of each deposit you receive into your savings account.

Trade in or sell your old car

Depending on your current car’s value, the money you receive from trading it in may significantly reduce the cost of your new car. Trading in your car is an easy method for getting cash to put towards your new car. Selling your car might earn you more money, but it could take longer and cost you more in effort.

Get a side job

In addition to your full-time job, a side job will give you some extra cash to add to your car-savings fund. You could freelance as a writer, sell your unwanted books, games, or other items online, babysit, grocery shop, ride share, or be a virtual assistant to grab the extra cash to put towards your new ride.

The bottom line: Buy a car that aligns with your budget and timeline

You should choose the car you want based on what you can afford, your timeline, and your preferences. If you want a brand-new car, you may have to develop a long-term plan to save up for it. And if you have an immediate need for a car, you should adjust your plan and budget. By finding ways to save money and carefully tracking your spending, you can save enough to make your new car payments affordable.

This material is provided for informational purposes only, and is not intended as personal advice or an offer of credit.