Drive Your Car, Not Your Wallet: How to Cut Down Your Car Payments

How to Lower Car Payments: 9 Ways to Save Money

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How to Lower Car Payments: 9 Ways to Save Money

Are you finding that the monthly payments on your auto loan are putting a strain on your finances? If you’ve been asking yourself a lot lately, “How can I cut my auto payments?” then this piece is definitely for you!

Even with a comfortable vehicle loan to ease the strain on one’s finances, car ownership in the United States is becoming an increasingly expensive endeavour. 

According to estimates from Experian 2021, the average loan amount taken out for new vehicles has gone to $35,000, which is a gain of $2000 from the previous year

At the same time, the average monthly payment on a car loan has increased to $600. Your financial situation may become even more precarious if the prices of fuel and other necessities continue to rise. 

We won’t judge you if your search history over the past few weeks is riddled with different variations of the question “How can I minimise the amount of money I pay for vehicle insurance?”

Don’t worry, we’re here to assist you in any way we can!  As Bloggers we have talked to many Insurance companies like  and  has compiled a list of seven of the most common strategies for reducing monthly automobile costs in this post. 

Consider going with one of these choices in order to get the most bang for your buck, whether you are already making payments on a car loan or are thinking about getting a loan to buy a new vehicle.

It is always wise to check into auto loan refinancing if you have already taken out a loan and believe that you got a bad deal. 

This will allow you to reduce the amount of money you spend each month for car insurance.

Are You looking for a New/Used car? Check the list of Best Car Finance companies in the market as per your needs

How to deal with this situation

Make your payments more manageable by refinancing your car loan with a longer term.

It is common knowledge that taking out a short-term vehicle loan can result in lower overall interest rates; but, doing so will also result in higher monthly payments for the auto loan.

 Increasing the length of your loan’s term can help you reduce the amount you pay each month while also providing a more manageable time frame for repayment. 

It may come as a surprise to learn that there is a selection of refinancing periods available, ranging from a minimum of 36 months to a maximum of 84 months.

When it comes to determining whether or not to get a car loan, what are the advantages and disadvantages of having longer payment terms?

It is simple to become preoccupied with the phenomenon that is the odour of a new car. You had a look at a vehicle that caught your eye because the one you currently drive is getting on in years, and you are ready to upgrade. 

You go to a car showroom, do a test drive, and that’s when the passion really starts to build. 

You cannot see well because of your favourite colour, the fantastic stereo, the many safety features, and the excellent fuel economy. 

You won’t stop at anything until you are behind the wheel of your ideal automobile. 

Does this mean that you will get into a legally binding contract for a period of seven years so that you can afford the payments? If this is the case, know that you are not the only one, but keep in mind that unhappiness enjoys the company of others.

The Typical Cost of a Car Payments

The most recent Experian finance report for the fourth quarter of 2018 shows us that people’s choice of larger and more expensive vehicles, such as SUVs, continues to drive up the cost of their monthly car payments. 

Taking into account borrowers of all credit levels, the average monthly payment for a brand-new car in the fourth quarter of 2018 was $547. (This is an increase from the prior quarter’s total of $525.) The monthly payments for used cars averaged $391.20.

People keep taking out loans with lengthier repayment periods in the hopes of lowering their monthly costs. 30.3 percent of consumers who bought a new car during the fourth quarter of 2018 financed the purchase for 73 to 84 months, while 40.3 percent financed the purchase for 61 to 72 months. 

Fourty-two point three percent of those who bought used cars financed the purchase for 61 to 72 months. 

In comparison to the previous quarter, 18.4 percent of purchases were financed for 73-84 months.

Loan Termination after 60 Months

Going for more than sixty months without stopping must to be approached with the utmost prudence. 

If you drive 15,000 miles each year, do you think the car will even last you seven years? Are you willing to put in at least 66 months of driving time in this vehicle before trading it in, given that the odds are that you’ll have to? 

Have you taken the effort to determine how much additional interest you will be responsible for paying? You can bet that the interest rate will go up in proportion to the length of the loan. 

What are your options if a terrible incident takes place, like losing your job or having health problems, and you need to get out of the loan? 

If you did not make a significant down payment when you acquired the property, it will be exceedingly challenging for you to break out of a long-term debt.

Think About Your Financial Plan.

This is where moderation and self-control come into play. If you can’t get the car you desire within sixty months, you should probably rethink your decision to purchase the vehicle.

 I am aware that by the time you realise that you cannot afford it, you have already fallen in love with it; hence, it is essential to make preparations in advance. 

There is a large selection of auto payment calculators available online; however, you should work out your budget and determine how much money you can finance over a period of 60 months to arrive at a payment that is within your financial means, and then adhere to this payment.

Think About Getting a Lease.

Consider signing a lease for 36 or 39 months if you don’t put more than 15,000 miles on your car each year and you absolutely must have the car of your dreams. In this situation, getting out of the lease will be considerably simpler. 

In addition, if it is at all possible, you should postpone the decision until such time as you have saved enough money for the down payment to make the car affordable on a five-year lease. 

You might be able to live without some of the features that come standard on the automobile that you want, and finally, there might be a pre-owned vehicle that is only two years old and has low mileage that you would be satisfied with.

Bottom Line

If you buy a car right now and finance it for 84 months( 7 Years lon), you won’t own it free and clear until the year 2029. Does anything like that truly seem like a good idea to you? 

Applying self-control and sound judgement are two essential components of a sane approach to the purchase of a vehicle.

Would you consider taking out a ten-year auto loan if the monthly payments were significantly reduced?


Anyone who is thinking about taking out a loan with such a long term for an object that is decreasing in value, like a car, should carefully examine how much they will pay in interest over the course of the loan. 

After that, they should carefully consider how much money they may save by purchasing a slightly used version of the automobile, one that is approximately three years old, has a low mileage total, and is in outstanding shape.

When taking out a car loan for such a long period of time, you need also think about how long you will be in the negative equity position. 

This depends on a number of factors, including the rate at which that particular car model loses value, the amount of the down payment you make, the interest rate on your loan, and whether or not you get into minor accidents that lower its value. 

However, no matter how you cut it, if you have a 10 year loan, you will be upside down for a significantly longer period of time than if you had a loan with a shorter term.

Oh, but what if the vehicle for which you were considering taking out a loan for ten years was already a little bit used? After that, what?

If that’s the case, I’d look into automobiles that are ten years old but have a stellar reputation for dependability, longevity, and cheap ownership costs. 

A standard auto loan can be obtained for a vehicle that is up to ten years old; beyond that, you will most likely be required to pay cash for the vehicle or obtain a loan secured in another manner, such as through a loan secured by your home equity.

Consider purchasing a secondhand vehicle rather than a brand-new one to save money on monthly auto payments.

If you are a driver looking into getting auto loans and have a limited budget, it is possible that purchasing a used vehicle rather than a brand-new one will be more cost-effective for you. 

The average cost for an auto loan on a used car is roughly 3.84 percent, while the average rate for a loan on a new car is 4.3 percent (according to Experian data). Used cars often have a monthly payment of around $400, whereas new cars typically have a cost of around $540. 

In addition, a brand-new automobile loses between 10 and 20 percent of its value after it is purchased, despite the fact that it is still relatively dependable. If you take full advantage of this, you may be able to enjoy auto insurance premiums that are below the national average.

Is it wiser to get a pre-owned automobile as opposed to a brand-new motor vehicle?

Which option—buying a new or a used car—do you find more appealing and why?

To provide a concise response, I favour secondhand autos.

Right, I can tell that you are looking for a more in-depth response, so allow me to get started on that.

To make myself clear, I don’t see any problems with purchasing a new vehicle. I don’t do it, but if someone else wants their brand-new ride to be spotless from the factory, I won’t look down on them for purchasing the vehicle directly from the manufacturer.

However, in my opinion, older cars have a lot going for them, both in terms of safety and convenience. Let me list a few:

They come at a lower cost. If you compare the prices of new automobiles to those of used cars, you will most likely come to the conclusion that used cars are significantly more affordable than newer models. 

That really shouldn’t come as a surprise. However, when you consider that you can buy a used BMW 3 series that is both pretty and pretty nice with all of the options list ticked hard for the same price as a brand-new small Hyundai City car, the difference becomes appalling in terms of the level of luxury that you are ignoring when you ignore used cars.

The Best Used-car Websites to purchase your next Ride

List of Best Used car Websites

When applying for a loan, you should steer clear of dealership lending.

When you’re really thrilled about buying your dream car, it’s easy to forget about boring but necessary details like filling out the paperwork. 

When it comes to obtaining an auto loan, this is one reason why many people choose for dealership financing. 

Although there are certain advantages to dealership financing, such as fewer stringent restrictions regarding your credit score, you will most likely be charged a higher interest rate, which will result in greater payments on a monthly basis. 

We suggest that until time is of the importance, you shop around for better loan conditions with your bank and credit unions in order to get the best deal possible.

Refinance the loan and try to find someone to co-sign it.

If you are having trouble paying back a vehicle loan and are a student or young professional, you always have the option of enlisting your parents or close friends as co-signers on the loan. 

Your monthly car payments might be reduced to a more bearable level if you refinanced your auto loan with the help of a co-signer. 

However, there is a degree of danger involved for the co-signer because in the event that you do not repay the loan, he or she will be responsible for doing so. 

It may also have an effect on the credit score of the co-signer, so be careful about who you bring on board!

Instead, you may rent a vehicle.

Leasing out a vehicle is an option that is often overlooked by motorists who wish to avoid paying excessive rates. When you lease a vehicle, instead of buying it outright, you rent it from the dealer for a predetermined amount of time, typically between 36 and 48 months. 

When the duration of the lease is up, you will have the option to either hand it back or pay a set fee to purchase it. 

Because lease payments are significantly lower than payments for automobile loans, you’ll have more money in your wallet for other unexpected expenses as a result. 

The amount that must be paid each month for the lease is depending on a number of factors, including the following:

  • Sale Price of the car
  • Estimated highway mileage for a car
  • The duration of the lease the monthly rent charge
  • Residual Value

Make Prepayment

One approach to lower the total amount you pay over time and save money on interest is to make prepayments. You can minimise the amount of principal you owe by making payments that are greater than the minimum required. 

Your monthly payment will be reduced if you divide the lesser principal that is still owed on the loan by the number of months that are still outstanding on the loan. 

Put whatever extra cash you come into, whether it be from a bonus or an inheritance, straight towards paying off your debt so that you can lower your payments coming forwards. 

Before you go ahead and do this, you should first determine whether or not the terms of the loan include a prepayment penalty that would kick in if you try to pay off the loan ahead of schedule.

Making a Request for Reduced rates

If a lender is willing to reduce interest rates, even by a small amount, they may be able to negotiate lower monthly payments with their borrowers. 

Lenders do this to reduce the risk of having loans go into default and to discourage responsible borrowers from refinancing with other lenders in the market. 

Every financial institution has its own set of guidelines on the lowering of interest rates; some of them do it extremely infrequently, while others are more inclined to do so even if the borrower does not refinance. 

When you call your lender to make this request, be sure to mention your credit history and the current condition of your loan.

Try Cash Back auto loan refinancing to get cash in hand 

If you’ve been searching the internet for “how can I lower my vehicle insurance costs,” it’s usually a sign that you’re having trouble keeping up with your monthly spending. In this scenario, Cash Back 

Auto Loan Refinancing can help you get a new auto loan that is based on the current worth of the vehicle to replace the one you already have for your vehicle. 

As long as the value of your car has not dropped below a particular threshold, you may be eligible for a loan of up to 125 percent of its current market price. 

You can make advantage of the new loan to pay for necessary costs while also exploring the possibility of reducing the monthly payments on the car loan.

Can I Lower My Auto Interest Rate Without Refinancing?

If you’ve been searching the internet for “how can I lower my vehicle insurance costs,” it’s usually a sign that you’re having trouble keeping up with your monthly spending. In this scenario, Cash Back 

Auto Loan Refinancing can help you get a new auto loan that is based on the current worth of the vehicle to replace the one you already have for your vehicle. 

As long as the value of your car has not dropped below a particular threshold, you may be eligible for a loan of up to 125 percent of its current market price. 

You can make advantage of the new loan to pay for necessary costs while also exploring the possibility of reducing the monthly payments on the car loan.

The best way to reduce your monthly auto payment without resorting to refinancing.

There are a few choices available to you if you do not wish to refinance your current loan but you would still like to reduce the amount that you pay each month.

Get in touch with your creditor as soon as possible if you find that you are having difficulty meeting your payment obligations due to a change in your financial situation. 

They could be able to lower your interest rate, postpone some of your payments, or prolong the length of your loan in order to make it more affordable for you to make the payments on the debt.

Make a profit by trading in your current vehicle: Consider trading in your current vehicle for a less expensive model if you recently purchased a vehicle that is beyond your financial means or if your financial circumstances have changed since the time of your purchase.

Quick Tips to Purchase a Used Luxe Car(Porsche, Mercedes Benz, Maserati, BMW ,Audi…Etc)

Buying the first model you see just because it’s inexpensive is the worst option. Do your homework if you want a reliable vehicle that will last you for years.

The worst thing that can be done is to get the cheapest model available. If you want an automobile that is in good condition and will provide you years of driving pleasure, you must conduct study.

Perform your Own research and adhere to these Nine steps:

  • Investigate the vehicle’s history.
  • Conduct a system check on the vehicle (request this be done with your pre-purchase inspection).
  • Most crucial, have an expert Luxury car Mechanic evaluate the vehicle before you purchase it.
  • Test drive it before Purchasing it
  • Check the Interiors Completely and Thoroughly
  • Check the Insurance costs
  • Check internet reviews and ratings, as well as  online forums.
  • Negotiate the price of the used Luxe car
  • Apply for AUTO Loan

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About Author: James Haines

James Haines is an avid traveler across Australia (mostly on road trips) and a car specialist by occupation. The perfect combo for our cars for road trips

James is a motor mechanic and Luxe Car detailing expert based in Melbourne, Australia.

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