How to Budget for a New Car Without Going Broke
Drawing a budget for a new car shouldn’t be the reason you’re eating garri for two months straight. But for many Nigerians, that’s the reality when the excitement of owning a car overshadows proper planning. The truth is, you can get that dream ride without wrecking your finances if you budget smart.
In this post, we’ll break down how to budget for a new car like a boss, keep your cash flow steady, and still stay on track with major goals.
1. Ask the Real Question: “Why Do I Want a Car?”
There’s a difference between needing a car and wanting one.
If you work remotely and rarely go out, maybe you can wait. But if you spend 30% of your income on Bolt rides or your job requires daily movement, a car might be a smart investment. Knowing your “why” helps define your budget, urgency, and the type of vehicle that fits your lifestyle, not your ego.
2. Know the Total Cost of Ownership (Not Just Purchase Price)
Buying the car is only step one, also budget for:
- Registration & licensing
- Third-party or comprehensive insurance
- Routine servicing & repairs
- Fuel (especially at ₦600/litre and counting)
- Spare parts (depending on car model)
Tip: A ₦4m car could cost you another ₦800k per year in maintenance. Budget accordingly.
3. Create a Car Fund That Doesn’t Touch Your Rent Plan
Never use your rent savings for car expenses. Rent is non-negotiable; treat it as sacred. Set up a separate savings plan for the car. You can create a SpaceAuto savings plan for your car and a SpaceRent savings plan for your house rent. Let that separation help you stay focused.
4. Consider Buying Used
A tokunbo (foreign used) car can save you up to 40% of the cost of a new vehicle. Just make sure you do your due diligence:
- Inspect with a trusted mechanic
- Verify documents
- Budget for immediate repairs
5. Delay the Purchase If Necessary
This one hurts, but it’s real. If buying a car now will put your rent, food, or peace of mind at risk, wait, build your financial stability first. You’ll enjoy the car better when your roof and savings are intact.