How do I even buy my first car without a loan wrecking me?

Save up and buy a cheaper used car outright. That's the DoshHero way. A car loan is debt for something that loses value every year you own it, and DoshHero doesn't recommend going into debt except for a home loan. A first car isn't that.

Why skip the car loan

A loan means paying for yesterday's car with today's pay, plus interest. That money can't go into your Emergency Fund, your Investing slice or your life. And if the car breaks or you lose hours, the repayments keep coming. Instead, pick a car you can save for, fill a pot, and buy it in cash. No repayments, no interest.

Step 1: Work out what a car really costs

The purchase price is only half the story. Before you set a target, list the yearly costs of owning it:

• Rego (registration), plus CTP insurance, which is bundled into rego in some states
• Insurance (third party or comprehensive, on top of CTP)
• Servicing and basic maintenance
• Tyres and repairs (your Emergency Fund for surprises)
• Fuel (this comes from Everyday spends, not Wheels)

Under 25? Insurance quotes are often higher, and many policies add an age excess if you claim. Get a quote before you pick the car.

Step 2: Set a real target, then drip

Open a savings pot called Car and pick a target you can actually reach. For a first car, cheap and reliable beats flashy. Then:

Target ÷ pays left = your drip

Example: $4,000 for a used car, 40 weeks away, paid weekly = $100 a week into Car.

If $100 doesn't fit, push the date out or lower the target, rather than filling the gap with a loan. More on the drip: How do I even save for a car or holiday?

Want the weekly number done for you? Use the Weekly Saver.

Step 3: Keep a Wheels pot for the running costs

Once you've got the car, the two big yearly bills go in your Wheels pot: rego and insurance. Not fuel (that's Everyday spends), and not the purchase price (that was your Car pot).

Example (made-up numbers, yours depend on your state and car): rego $800 a year, insurance $1,200. That's $2,000 a year, or about $38 a week. Set that as an automatic transfer into Wheels and you'll never scramble when the renewals land.

More on the cover itself: What even is car insurance?

How to buy a used car without getting caught out

A few things that save a lot of pain:

• Check the PPSR (ppsr.gov.au) with the VIN. For a couple of dollars you can see if there's a loan secured against the car, or if it's been written off or stolen. Don't buy until any debt is cleared.
• Get a mechanic to look at it. A pre-purchase inspection is cheaper than a surprise repair.
• Know what you're giving up in a private sale. Licensed dealers come with consumer rights (and sometimes a warranty). Private sales can be cheaper, but there's no warranty and no cooling-off period.
• Don't feel pressured. Walk away if something feels off. Scamwatch warns about sellers who won't meet in person, rush you, or ask for deposits before you've seen the car.

What about "financing a secondhand car at 19"?

It's a common Reddit question. The DoshHero answer is no. A loan at 19 for a used car can mean high interest, high repayments and a car that keeps costing you after you've bought it. Save longer, buy cheaper, drive something you own outright.

If you've already got a car loan, treat it like any other consumer debt: keep paying the minimums, then knock it down with extras using the snowball. How do I even pick avalanche vs snowball?

Keep the rest of your plan running

While you're saving for the car:

• Your Emergency Fund trickle stays on
• Your Investing slice stays on (aim for at least 10% of your pay)
• Fun and friends still happen, planned in

And once it's bought, the money that would have gone on repayments goes back into investing and living. The free First Pay Playbook shows how to set up all the pots.

See also

How do I even save for a car or holiday? · What even is a sinking fund? · What even is car insurance? · Your first real budget (the three buckets) · Weekly Saver