Maybe you are wondering if there is any way to lower your car payments because the average monthly payment on a new-car loan is currently over $560. Get a refinancing auto loan calculator and get to work. The average monthly payment for new cars was $568 in the second quarter of 2020, and used-car payments averaged $397 per month, according to Experian’s State of the Automotive Finance Market report. A lower car payment is possible if you’re struggling to meet your current car payment or you want a lower monthly payment when shopping for a car loan.
Get a lower car payment.
Whether you need extra cash to put in your pocket each month or you’re having trouble making your monthly car loan payments, consider these options if you already have a car loan.
Get a refinance for your car loan.
You might be able to reduce your monthly payments by refinancing your existing loan. A new loan could be available to you if interest rates have dropped, your credit has improved, or if you aren’t sure if you got the best deal in the first place.
Consult your lender.
You can discuss your financial situation with your lender or loan servicer if you are behind on your auto loan or at risk of missing a payment.
A lower-priced vehicle can be exchanged for your car.
You may be able to lower your monthly payment by trading in your car for a less expensive model if you have positive equity in your vehicle, where your loan balance is less than its value.
Before you buy a car, lower your payments.
There are a few ways you can lower your monthly car payment besides choosing a cheaper car.
Consider extending the loan term.
By opting for a 72-month or 84-month loan term, you can save money on your monthly payments; but you’ll pay more total interest. You might also be charged higher rates when you extend your loan term.
Comparing prices could pay off. Compare lenders’ offers, such as banks, credit unions, online lenders, or dealerships, to see which factors can have an impact on your monthly car payment. The loan amount, interest rate, and loan term are all included. Use the refinancing auto loan calculator to compare.
Put down a deposit
You can reduce your monthly auto loan payments by saving up cash for a down payment. With a down payment, you can borrow less money when you buy a car.