There are numerous ways to save money on your car payments. A word of advice is to not rush the process of buying a car. From the very beginning, weigh all of your options carefully, and you'll make the choice that's right for you. Here are six strategies to consider:
- Tighten up your credit - Generally speaking, the better your credit score, the lower your interest rate.
- Don't borrow too little - If you only need a few thousand dollars, don't apply for an auto loan. Set your loan limit at $5,000; anything below that amount should come from your savings account.
- Refinance - The ability to refinance a home mortgage is well known. However, many consumers don't know that they can also refinance their car. Not only does it lower the monthly payment, but it also reduces the amount of interest you're paying which allows you to pay off your car sooner.
- Get your car at the dealership, your loan from a lender - You probably did some shopping around for your car. Do the same for your loan.
- Lease it - Leasing is not right for anybody who wants to own the car once all payments are made, but if you would rather not own a car, leasing may be a good choice for you.
- Buy a cheaper car - It seems like an obvious and not so profound piece of advice, doesn't it? However, it's worth considering seriously. The facts are clear that Americans have an awful habit of purchasing what they can’t afford.
An expanded discussion of this topic can be found in this article.