The maths is simple: take what you need, subtract what you have, and divide by the months until you want it. The hard part is picking a target and a date that are actually realistic, so let's work through it.
Step 1: decide what you're really buying
The sticker price isn't the whole cost. Before you set a target, factor in the extras that catch people out:
- The car itself (or your deposit, if you're financing)
- Insurance, often paid up front or as a first larger payment
- Road tax and the first MOT
- A small buffer for early repairs or tyres
You can save for the whole lot as one target, or keep the car and the running costs as separate goals. Either works. The point is not to be surprised.
Step 2: turn the total into a monthly figure
Here's how common targets break down over different timeframes:
| Target | In 12 months | In 24 months |
|---|---|---|
| £3,000 (deposit) | £250/mo | £125/mo |
| £6,000 (used car) | £500/mo | £250/mo |
| £12,000 (newer car) | £1,000/mo | £500/mo |
If the monthly figure looks too steep, you have three levers: lower the target (a cheaper car), extend the date (more months to save), or increase what you put aside. Most people end up adjusting all three until the number feels comfortable.
Enter your car target, what you've already saved, and your date. PacePot shows the exact monthly pace and whether you're on track.
Open the car savings calculatorStep 3: save or finance?
Paying cash means no interest and you own the car outright from day one. Finance spreads the cost but adds interest and locks you into monthly payments. There's no universal right answer, but one thing helps in both cases: saving a deposit first. A bigger deposit means a cheaper car you can buy outright, or a smaller loan with lower interest if you do finance.
Step 4: make it automatic
Set up a standing order into a separate savings account for the day after payday. When the money moves before you see it, saving stops relying on willpower. Add any windfalls (a bonus or selling your old car) straight into the pot to pull your date forward.
The bottom line
Pick a realistic target including running costs, divide by your timeframe, and automate the monthly amount. Adjust the car, the date, or the pace until the number fits your budget, then let it run.