Even though we have high standards for our writing, this post may mention goods from our partners. Here is a look at how we make money. A high car payment can hurt your budget. Luckily, there are easy things you can do to bring it down. And if you haven’t taken out a loan yet, shopping around and identifying the perfect lender can help you start with a reduced monthly payment.

4 strategies to reduce your monthly car payment

Your car payout is not fixed. You need to talk to your loan company or take additional steps to make it easier to deal with.

Re-negotiate the terms of your loan.

When you’re having trouble making a payment, lenders often let you put it off. This can help for a month or two, but you may pay more in the long run. This is because interest keeps adding up while the payment is put off. You can also ask for a change to your loan.

Your lender might be willing to let you extend the length of your loan, which would mean paying more interest or getting a lower interest rate. The second one is better financially, but it may be hard to get if you don’t have good credit.

Refinance your automobile loan

Refinancing your loan can help you pay less each month in two ways. With the same amount of time left on your loan, you can get a lower interest rate, which means you pay less each month. Or, you can get a new loan with a longer term. This will lower your monthly payments, but it will cost you more in interest over time.

Turn your automobile into cash or trade.

If your car costs more than you can afford, you can always sell it and buy something else. The easiest way is to trade your car at a dealership. You’ll have more money to put down during your next car and won’t have to deal with a private sale. Private sellers may net you more money. Just know that selling a car with such a lien can be hard. Contact the lender to ensure you aren’t breaking the terms of your agreement.

Whenever you can, make extra payments.

If you pay off your car loan early, you may be able to skip some or all of your monthly payments in the future. Many lenders only put extra payments toward interest, but you may be able to ask that yours go straight to the principal. This will help cut down on how much you have to pay. It will also give you room to move in the future, which you will need.

How to get a lower monthly car payment before buying

Smart shopping will help you get a low salary on your next car. You don’t have to start taking the first loan offered to you, and maintaining the quantity you finance low is a good way to keep your monthly payments low, too.

  • Buy a second-hand car. Buying a used car is much cheaper upfront and will prevent you from getting the huge fall in value that new cars go through.
  • If you can, put down a big down payment. The more you pay upfront, the less you have to borrow, which means your monthly payments will be less.
  • You can trade in your current car or sell it on your own. Using your current car as part of your deposit is a good way to keep your upcoming monthly payment low.
  • Before you try to get a loan, you should work on your credit score. Lenders and car lots will give you better rates when you have good or great credit if you can wait until your points tally has gone up a few points before you buy a car.
  • Look around for the best way to pay for it. Don’t think that you can only get a loan from the dealership. If you shop around, you have a better chance of getting a good interest rate and a flexible monthly payment.
  • Choose a longer loan term, but remember that you’ll have to pay more interest. With a loan term of more than 60 months, you can lower your monthly payments, but you may spend thousands more on it than your car is worth.
  • Pay sales tax right away. Lenders will let you pay your car’s sales tax with a loan, but you shouldn’t. You’ll also have to pay interest, making your monthly payment even bigger.
  • Instead of buying, rent. People don’t like leasing, but it can save you money on your monthly payments. But if you don’t have good credit, it can be expensive, and you won’t be free to sell your car when the lease is up.


Since your car shouldn’t cost more than 25% of your total budget, it’s important to keep your monthly payment low. If you took out a loan with a high-interest rate, you can refinance it or try to get a better deal. But switching to a smaller car is also a good idea that can help you save more money each month. Before shopping for a new or used car, consider how much it will cost and save up for a down payment. You’ll pay less in interest and have a low monthly bill to start with.


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