When money is tight or you're hoping to make a big purchase, every penny counts. Whether you're trying to save up for something big, looking to put more money where it matters, or cutting back in leaner times, lowering your expenses can help.
That means, when you're going through your budget, you may want to figure out where you can save a few dollars. For many people, a car payment is one of the heftier bills they pay each month. If that's the case for you, lowering your car payment could be the answer to your financial challenges.
Whether you need a temporary fix or a long term solution, there are tons of great options out there to secure a lower monthly car payment.
Lenders are in the business of making money, and they can only make money when you make your payments. You may be surprised that many lenders are willing to work with people to help them manage their payments more effectively.
They may allow you to skip a payment or lower your payments temporarily. Keep in mind that interest will still accrue during this time, but it is always better to defer and have this accumulate than to have missed payments, late fees, and the negative credit impacts that will occur without deferment.
That said, not all lenders are magnanimous, and they'll rarely want to cut a deal that doesn't benefit them in the end, so while you may be able to skip a payment or lower your monthly cost, you may end up paying more interest in the long run if you go this route.
Refinancing can lower your monthly car payments in a number of ways and might be your best option to effectively and sustainably reduce your monthly payments.
Since refinancing benefits both you and your new lender, it's a win-win – they don't need to make more money than your current lender, so you're more likely to get a deal that'll cost you less overall. Here's how.
One of the main benefits of refinancing is securing a lower APR. There are several reasons you might be able to get a better interest rate this time around.
Even if you are not eligible for a lower interest rate, refinancing can still reduce your monthly payments by changing your repayment schedule. If you lengthen your repayment period (for example from 36 months to 48 months) your balance will be paid over a longer period of time and your payments will be lower. Keep in mind you will be paying more interest overall, as you will pay interest for 48 months instead of 36 months, but it will drastically reduce your monthly payments.
When you refinance, you can add a co-signer to your loan and possibly reduce your interest rate and secure better terms. If your co-borrower has good credit, they will be eligible for a better interest rate.
If refinancing sounds like a good option for you, Auto Approve can streamline this process and help you start saving money today. We work as your advocates to get you the best rates possible.
Why Auto Approve? Click here to find out.
If you need a more permanent solution than talking with your lender will provide, and refinancing isn’t an option, you might need to consider a new set of wheels. You can either trade in your car to a dealership or sell the car on your own.
Almost all dealerships will accept trade-ins and can put you in a car that will have lower monthly payments. Make sure you talk to the dealership and are upfront about what you can and cannot afford.
You can also choose to sell the car privately. This is a bit more work than going to a dealership, but you will probably get more money for your car. If you want to sell your car on your own, be sure to clean your car very well, get good pictures, and make sure maintenance records are up to date. You want to make your car as attractive as possible to increase the amount of money you can make.
Whether you sell to a dealership or to a private buyer, be sure to know two things before starting this process:
If you have sold your car but still need to get around, getting a lease instead of purchasing a new car might be a good option. Leases are generally cheaper than buying a new car, as you are only paying for the depreciation that accrues during your use. There are three main leases you can pursue:
In times of economic uncertainty, budgeting and saving money is incredibly important. If you are struggling to make ends meet every month, consider one of the options above.
And if refinancing seems like the right option for you, or you want to find out just how much refinancing could lower your monthly payment, Auto Approve is here for you. All it takes is a few clicks and to get a quote and get on your way to more money in your pocket and less on your vehicle payments.