How to save cash for next car

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nogawred
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How to save cash for next car

Postby nogawred » Sat Jan 19, 2013 11:48 am

Settling the balance on my vehicle in a couple of months and I will save the 510$ payment.

I plan to buy my next vehicle in cash. No more interest payments for this family.

I plan to save the payments I was previously making until we are ready to purchase our next vehicle. Will not be any earlier than 4 years from savings start date.

Where is the smartest place to save/invest those payments? Low to moderate risk. CD's, savings account, money market, etc?

Thanks!

DoingHomework
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Re: How to save cash for next car

Postby DoingHomework » Sat Jan 19, 2013 2:20 pm

Money market account. A CD is safe enough but generally does not work when you are adding money every month. If you find one that allows that then it would be ok as well

stannius
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Re: How to save cash for next car

Postby stannius » Tue Jan 22, 2013 9:56 am

You could also do something like, save in a MMA for 6 months and then buy a CD. But another downside is that a CD plan depends on how well you know in advance the timing of buying the future car.

Also, nowadays you don't get a whole lot of extra interest from a CD.

I just saved mine in a money market account.

Mario
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Re: How to save cash for next car

Postby Mario » Mon Jan 28, 2013 12:45 pm

Both a money market account and a savings account would be liquid enough for your purposes. That said, Barclays' 1.0% money market account is the highest I've seen out there...
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nelson
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Re: How to save cash for next car

Postby nelson » Wed Feb 06, 2013 8:07 am

What I did was invest in a CD up front. Additional funds after that went to a money market account. When the CD matured, that went into the money market account. When I was ready to buy the car, I transferred funds from the MMA into Checking and wrote a check.


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