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 New Zealand calculator works out the monthly saving needed to replace your car when it is due. Saving ahead lets you pay cash, skip car finance and the interest that comes with it, and negotiate harder as a cash buyer. You enter the price of the next car, your expected trade-in, any savings already set aside and the months you have, and the tool shows the monthly and weekly amount to put away.

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 Loan Calculator: the cost of financing.
Car Depreciation Calculator: how cars lose value.
Savings Goal Calculator: any goal.
Sinking Fund Calculator: known costs.

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