saving for a car

[rainws]

hi,

I plan to save for the next 12-15 months ($1500 per month) so that I can purchase my next car with cash. do you think a high interest online savings account would be best for this type of savings?

[Reldon]

Hi,

If you are going to use it in the next 12-15 months, you can either use an online high interest account or do a CD ladder. After you have maybe 5000, you probably can put it in a 3 month CD account which might provide more interest than the current high interest accounts.

[ScrimpAndSave]

I love my ingdirect account.

[zooracer]

can I make a recommendation?
As someone who has been there and done that...owned many different cars over the years...and is a devoted gear head who knows cars inside and out....

I would recommend you do not buy new.
I would go out and find a 92 to...say...97 Honda Civic (hatch or sedan, 2 dr or 4 dr...your choice)
Find one with 75 to 150 K miles (this is just breaking in for these motors).

You will spend between 1500 and 3500 (paid 1800 for mine), will save on depreciation, save on gas (most get around 37 with mixed driving), very practical with either a hatch or 4dr, HONDA RELIABILITY...and, they arent bad looking car's either.

Car's are liabilities. So, the less money you dump into one the better.

[yellow heel]

I don't know if I will go as far as zooracer but I agree.

Get a used car. I did and never regret it. I got my 2000 echo for $5800 with 60k miles. I gets anywhere from 30-40mpg never had a problem. I could probably sell if now for the same price if not very close to it.

Even though I already bought the car just three years ago, I have car fund that I put in $100/wk for any car related expense or when the car breaks down in 10-20 years (i hope), I will have enough money saved up.

[maat55]

I don't know if I will go as far as zooracer but I agree.

Get a used car. I did and never regret it. I got my 2000 echo for $5800 with 60k miles. I gets anywhere from 30-40mpg never had a problem. I could probably sell if now for the same price if not very close to it.

Even though I already bought the car just three years ago, I have car fund that I put in $100/wk for any car related expense or when the car breaks down in 10-20 years (i hope), I will have enough money saved up.

I like your plan, saving and paying cash for a slightly used cars. Remember to make saving for wealth building, in this same manner. Use high interest savings for short term purchases and growth stock mutual funds for long term investing.

[Tree0164]

I would put it in an ING type of money market account.

Great job on making a plan to pay in cash for your car!! You don't need to buy brand new something that is a 1-2 years old is good too!

[rainws]

thanks for the tips, i will check out ING.

zooracer: i've always been afraid to buy a car that old for fear i would end up dumping a lot of money into it for repairs. how has your ecperience been from that perspective?