How to Afford Your Dream Car

Your dream car doesn’t have to be a souped-up Model A Lincoln hotrod or a Maserati Quattroporte. It only needs to be a car you want and the car you cannot afford to buy.

It’s the car you want but can’t have.

Your dream car may be imperfect, looked down upon by others, or coveted by every collector on the planet. It doesn’t matter. It’s the vehicle you want to own.

In a good year, most people compromise on the quality of the car they buy. And compromise can be costly. Late-model trucks and SUVs cost more today than many small-family homes did only a generation ago.

No matter what anyone says about inflation and vehicle quality, inflation has driven up personal transportation costs at a very high clip. If you’re not ready for an 8-10 year finance contract, you must be prepared to make hefty monthly payments.

And that is why so few people buy their dream cars. They give up on their dreams because car ownership expense outpaces most people’s growth in income.

But that’s not the way dreams are supposed to work. Maybe you’re dreaming too big. That Lamborghini Diablo is an unrealistic goal for most hard-working people who don’t win the lottery, but many cool cars are waiting to be bought by loving owners who will cherish them for a lifetime.

Here’s how you can do it.

Affordability Begins with Money Management

If you don’t have an income now, assume you will have one somewhere in the future. Money management calls for discipline and faith in your ability to earn an income.

The basic principle of effective money management is spending less than you earn. Save the rest. How you do that is up to you.

Some people spend their entire lives living well below their means. You occasionally hear about the retired janitor who died a millionaire, and all his neighbors thought he was poor and needy. These people chose to live frugal lifestyles.

Frugality isn’t a sign of failure. It’s a sign of discipline. Your income may force you to be frugal, but if you’re just barely making ends meet you always have three choices:

  1. Find a way to earn more money to save
  2. Find a way to spend less money so you can the remainder.
  3. Do nothing, change nothing.

Choice number 3 doesn’t have to be the decision for the rest of your life. If you don’t see an opportunity to change things now, keep looking.

Whether you eat more peanut butter and jelly sandwiches, move back in with your parents, or rent rooms out to college students, your most significant expenses are housing and food. You need a safe place to sleep and food to eat.

If making a budget makes you anxious to the point you just give up and walk away, then don’t make a budget – yet. Look at your two most significant expenses and ask yourself, how do I cut these costs without sacrificing my health and safety?

No one becomes a wiz at managing (or making) money overnight. Everyone has to try something new. Keep experimenting with new ideas until you find a lifestyle and income that works for you.

Your first step toward buying a dream car is getting to the point where you can save up the money you need to pay for it.

Patience Gives You an Advantage Over Impulse Buyers

If you’re only saving $5 a week, don’t give up in despair. At that rate, the worst-case scenario for you is that you’ll have set aside $260 at the end of the first year. Keep doing that for ten years and you’ll have $2600.

But put things in perspective. The younger you are, the more time you have to grow your income, learn how to manage your money better, and save more money. It should take most people far less time than ten years to save $2600.

Setting goals helps. If you can save $1000 a year, then you’ll have $10,000 in 10 years. You’re closer to your goal of affording your dream car than if you only save $2600 in 10 years.

It’s partly a numbers game, but it’s also a waiting game. You need to invest time in pursuing your dream, building your income, and improving your lifestyle.

But the waiting game gives you another advantage: you have the luxury of looking at multiple buying opportunities.

You may see a great deal on your dream car after three years of saving. Or maybe you only see a deal that is not so great. The chance to buy most vehicles comes along more often than people realize.

When you feel like you must buy it now or you’ll never own the car of your dreams, you’re more likely never to buy the car of your dreams. Don’t procrastinate. Wait for the right moment.

Buy New, Used, or Retired?

One of the first things personal finance experts tell you is to stop buying brand new cars. They depreciate so fast you end up paying more for the privilege of owning a new car then you do for the vehicle itself.

And if you don’t have good credit, you’ll have to pay a higher interest rate. You should get pre-purchase loan approval from a credit union, savings and loan, or bank (in that order of preference). Never let the dealer finance your car because they always make a percentage on top of what the bank gets. Unless the deal is zero percent interest. That’s hard to beat.

You don’t need the latest model year car unless you’re only buying the car for the newest technology.

Is a radio or set of speakers worth that much to you?

Buy certified, pre-owned vehicles when you need a car. But older used vehicles when you can find good ones. They’ll retain more of their value.

retired vehicle is still drivable but is sitting idle, or maybe it’s a half-rusted chassis sitting in someone’s garage. 

If you’ve ever watched a show like Wheeler Dealers or Garage Squad then you know people buy old barely functional cars to fix them up. You can do the same thing. You’ll pay a lot less money for a bucket of bolts than you will for a brand new car. 

You just need a safe place to put the bucket and its assorted bolts while you work on it.

Where to Find Help in Restoring Old Cars

If you’re not an expert mechanic and don’t have the time or desire to become one, you can still go with a fixer-upper car. But if you have the desire to learn how to do it yourself, you’ll need some help.

You can try starting out with YouTube videos, but you probably won’t get far with that. It’s better to join a local car enthusiast club and see if they have members willing to teach you.

You may have a local vocational school where mechanics and body specialists learn their trades. Those schools need vehicles to work on, and they may be able to do some of the work your car needs. You’ll pay less for the job, and professional teachers will supervise it.

You could also try enrolling in mechanic school, too. Learning how to rebuild your retired dream car while learning how to make more money is a smart move.

Estimate the Costs Ahead of Time

The first thing you should do is find out the current prices for your dream car. Knowing how much they cost today gives you two priorities:

  1. A savings goal
  2. A price target to beat

If you’re committed to buying a fixer-upper, start researching the prices and availability for parts you may need to buy. You can keep a ledger or just bookmark websites. It doesn’t matter as long as you keep your research up to date.

Even if you hate keeping a household budget, you need to create a dream car budget.

If you plan to buy a new or used vehicle, get an estimate on monthly payments every year until you’re ready to buy. Add $50 to $100 per month to your estimate just to be on the safe side.

Learn to Manage Your Credit

If you finance any purchase and your credit score is less than 750, you’ll pay higher interest rates. You may be able to get a reasonable interest rate with a hefty down payment.

Credit management goes beyond checking your credit score for free once a year. You want to look at all available financing deals. Your credit union or banking institution will always try to sell you some loans, so shop around.

When you make your purchase, you can still plan to refinance if you know you didn’t get the best possible terms. You may be able to do it right away because having the vehicle is better than having no collateral at all.

You may have to wait a year or two before you can negotiate better terms.


The difference between a dream and a passing fantasy is your commitment to following through. If you work toward getting what you want, it’s a dream. If you only say you wish you had the car, then it’s a fantasy.

Some people are satisfied with passing fantasies. Wishes and what-if thinking are normal, even okay, as long as you have somegoals. 

Don’t give up hope just because you’re broke, out of work, and have no idea of what to do next. That just means you put the dream car purchase on a back burner.

For now.

1 reply

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *