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To determine how much money you should save for a car, you must account for the , immediate closing fees , and a cushion for ongoing ownership costs . 1. The Target Savings Goal
Experts generally recommend saving enough to cover a substantial down payment and immediate "out-the-door" costs.
: Save an additional 10% of the purchase price to cover sales tax, title, registration, and dealership documentation fees.
Use these guidelines to ensure the car stays affordable relative to your income: How Much Money Should You Save Up to Buy a Car?
: Aim for 20% for a new car to avoid being "upside down" on your loan as it depreciates, or 10%–15% for a used car .
: If buying outright, you should save the full purchase price plus the 10% in fees. As of early 2026, the average new car transaction price is nearly $50,000 , while a typical 3–5 year old used car is around $26,000 . 2. Standard Budgeting Rules
To determine how much money you should save for a car, you must account for the , immediate closing fees , and a cushion for ongoing ownership costs . 1. The Target Savings Goal
Experts generally recommend saving enough to cover a substantial down payment and immediate "out-the-door" costs.
: Save an additional 10% of the purchase price to cover sales tax, title, registration, and dealership documentation fees.
Use these guidelines to ensure the car stays affordable relative to your income: How Much Money Should You Save Up to Buy a Car?
: Aim for 20% for a new car to avoid being "upside down" on your loan as it depreciates, or 10%–15% for a used car .
: If buying outright, you should save the full purchase price plus the 10% in fees. As of early 2026, the average new car transaction price is nearly $50,000 , while a typical 3–5 year old used car is around $26,000 . 2. Standard Budgeting Rules
