4 Ways to Lower Your Car Payment

Get Car Financing
No Matter Your Credit Situation.

Car shoppers with a credit score under 680 will have a hard time getting a loan without a cosigner, but some bad credit car loans are available.

By

Automotive Editor

John Diether has been a professional writer, editor, and producer since 1997. His work can be found on TV, radio, web, and various publications throughout the world.  He is a graduate of Northwestern University and has a 1992 Cadillac Brougham d’Elegance in his garage. 


, Automotive Editor - May 23, 2016

Looking to tighten your budget or save some money each month? Lowering your car payment is a good place to start. Here are the top four ways to minimize your monthly outlay:

1. Refinance your loan

Refinancing simply means paying off your existing loan with a new one that carries a lower interest rate. Depending on the amount you owe, you could save thousands by going this route. Nearly all banks offer auto refinancing, and the whole process can be completed in a day or two. Refinancing is the most common (and effective) tool borrowers use to lower their payments.

2. Lease next time

Leasing gives you the use of a car for an extended period of time, usually two to five years. Lease payments are typically much lower than loan payments because you're not paying for the entire car during that time, but only for the "portion" that you use. Just be aware that you will have no equity or car at the end of the lease agreement. You simply walk away.

3. Change your current lease

If you already have a lease, you can lower your payments by requesting a lower mileage allowance. Your payment amount is determined (in part) by the number of miles you are allowed to drive over the life of the lease. The lower the allowance, the lower your payment will be. However, you should be certain that you can stay within the new mileage limit. If you go over the specified amount, you'll have to pay a mileage penalty at the end of the lease. It does no good to lower your payment if it causes you to incur a major expense down the road.

4. Extend your payments

Whether you're about to buy or just looking to refinance, aim for the longest loan term possible. Loan terms up to 84 months are offered by most lenders. The longer the loan term, the lower your payments will be. In the end, you will pay more interest with a longer loan, but that may be less important to you than having a monthly payment you can afford.

, Automotive Editor

John Diether has been a professional writer, editor, and producer since 1997. His work can be found on TV, radio, web, and various publications throughout the world.  He is a graduate of Northwestern University and has a 1992 Cadillac Brougham d’Elegance in his garage. 


Loan approval is not guranteed and is subject to credit application and approval of the lender. Individual loan terms may vary.