You need to buy a vehicle? Your quick fix is a loan, right? Wrong! Most financial insituations don't offer 100% financing. Say you want a vehicle worth 1Million, the bank will give you 900k and you will have to raise the remaiming 100k. But with advance planning, you can raise that 1million. And even more. All you need is discipline. And note, saving is not easy! And that's the reason why it's usually considered a challenge. Saving is a challenge that one has to commit to or it will not be practically possible to achieve. If you start saving 60 months prior, and consistently save 15k and above, you will have over 900k in 60 months. With this amount, you can get a vehicle in cash from any vehicle show room. This is cheaper than the repayment you would have paid for taking a loan. Note that all the proceeds of the vehicle will be yours to keep.
Not sure if you are talking about your local currency because I doubt any bank over here in the UK would give out 900k for a car loan. And it can become difficult to save up in the long term because you can never predict what happens. A sudden illness or accident could mean that you have to spend a lot of money that you have saved up on medication or care. I presume you are talking about your local currency because saving 15K every month in the UK would be impossible unless you're a millionaire already and earning a lot every month.
I agree with kingcool52, it is important to save money as a back up plan and for future investments,but most people don't have the amount of income required to save that amount of money. Average earners and low income earners don't make enough from their salaries to accommodate saving $15000 yearly for 60 months. When salaries are issued, subtracting the amount of taxes, bills, needs, there is barely any money left for saving. Accidents and unfortunate circumstances do occur as well, for example loss of a job, death of a family member expenses, medical bills etc. These events are unforeseen and usually live people in a pile of debt. The only way I see anybody achieving this, is if this person is earning more than the average worker or have a profitable business or venture and is disciplined in the art of saving.
I can probably do that if I'm working, single, and living and eating at my parents' house. I don't think that's the case for most people. And even if your salary is large enough to allow you to save 15k a month to buy a car after five years, can you actually wait that long if you really need a car? Would you even prioritize saving for a car over saving for your own home? Another thing, your one million today will not be worth as much after five years because of inflation. A more realistic way to buy a car without resorting to a loan is to buy a cheap brand/model or a used car. My car is a repossessed car that I bought from a bank. It was cheap and I didn't have to take out a loan to buy it. If my finances get better, I can sell it after a few years for the same price and use the proceeds to partially cover the cost of a newer car model.
I have bought several cars in my working career (old and new) and taken only as much loan which I thought will allow me tax exemption but I was wrong as it was not allowed to salaried persons but businessmen in my country. Besides I have never bought a car that was more than US$15000 and a bank would only allow equal to $12-13000 which is only as much as my 2 months' salary so I would buy a car from my savings and save what I would pay in the head of interest.
