How much should I save each month for a new car?

Take the price of the car you will buy, subtract what you expect from your trade-in and any savings already set aside, then divide by the months until you need it. Saving that monthly amount means you can pay cash and skip car finance.

Why save for a car instead of financing it?

Car finance adds interest, often at high rates, to a vehicle that is losing value. Saving ahead lets you pay cash, avoid that interest, and negotiate harder as a cash buyer. A regular car replacement fund makes it routine.

What should the fund target be?

Base it on the realistic price of the replacement you want, not the cheapest option, and allow for on-road costs. Once you own the car, keep the habit going so the next replacement is funded too.

Car Replacement Fund Calculator

This calculator works out how much you need to save each month, right now, so you can pay cash for your next car in New Zealand rather than reaching for car finance when the time comes. You enter four figures: the price of the car you expect to buy next, what you think your current car will fetch as a trade-in or private sale, any money you have already put aside, and the number of months until you will need the replacement. The calculator subtracts your trade-in and existing savings from the target price to find the gap still to fund, then divides that gap by the months remaining to show the monthly amount to save, along with the weekly equivalent and the dollar gap that remains. Use it to set up a regular automatic transfer into a dedicated car fund, and revisit the figures whenever your plans or timeframe change. When setting your target price, allow for realistic on-road costs rather than the cheapest option you can find, and once you have bought the car, keep the habit going so the fund is already building towards the one after that. Saving ahead avoids interest on a depreciating asset and puts you in a stronger position to negotiate as a cash buyer. This is a planning estimate based on the figures you enter, not financial advice.

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Price of the next car

Expected trade-in or sale

Already saved

Months until you need it

to save each month for your next car

Per week$0

Amount still to save$0

Base the target on a realistic price including on-road costs, not the cheapest option. Keep the habit going after you buy so the next car is funded too. Estimate only.

How it works

The calculator takes the price of the next car, subtracts your expected trade-in and any savings already set aside, to find the gap you still need to fund. It then divides that gap by the months you have to show the monthly saving, with the weekly equivalent. Saving steadily means you reach the deadline able to pay cash, sidestepping car finance and the interest it piles onto a depreciating asset.

Worked example

A $22,000 car, less a $6,000 trade-in and $2,000 already saved, leaves $14,000 to fund. Over 36 months that is about $389 a month, or roughly $90 a week, to be ready to buy outright when the time comes.

Related calculators

Car Depreciation Calculator: how cars lose value.
Savings Goal Calculator: any goal.
Sinking Fund Calculator: known costs.

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