I’m a finance professional – seven ways to lower your car payment and increase your budget
AMERICANS paid a record average of $48,301 for new vehicles in August.
With the car inventory shortage not over, knowing how to lower your car payment is more vital than ever.
Refinancing is the most obvious choice if you want to lower your monthly vehicle payment.
Interest rates have recently increased – but your credit score has probably also increased, The Penny Hoarder reports.
Your credit score is a primary factor that lenders evaluate when generating your interest rate.
Drivers with the highest credit ratings are perceived as trustworthy when paying off their debts.
About 65% of cars financed were for drivers with a credit score of 661 or higher, NerdWallet reports.
Alternatively, some lenders may allow you to restructure your loan to extend the loan term or reduce the interest rate for the term.
If there’s one upside to inflated car market prices, it’s the fact that you can get more money than usual to sell your car.
If you sell your vehicle, you can take the cash and buy a cheaper ride to lower your monthly payments.
Buying a cheaper car after selling your vehicle will also allow you to pocket the money you didn’t spend on your next model.
Dealerships pay more than usual for used vehicles, but you can expect a higher profit from a private sale.
A reliable long-term strategy for reducing car payment costs is to make additional payments when affordable.
If you live in an urban environment, leasing your car can help you earn extra cash to make additional monthly payments.
The extra payments mean you pay off your loan faster.
A shorter car loan means cheaper monthly payments in the long run.
Other drivers can shorten the term of their auto loan with a larger down payment.