Auto loans can be expensive and drain your budget, but there are ways to avoid large monthly payments when buying a car. Not only are there ways to lower your monthly car payment before you purchase a vehicle, but it’s also possible to reduce your payment after you buy.
Taking out a car loan makes you responsible for your loan amount for many years. At Piazza Subaru, we have excellent options for car loans that can get you into a new Subaru and help you get the best new car financing possible.
What Happens if My Monthly Car Payment Is Too High?
When getting new car financing through a bank, credit union, or auto dealership, you agree to make monthly payments to pay the loan back in full. As part of your loan terms, your lender expects the total amount of the loan balance and any accrued interest.
If you fail to make timely or complete payments on your loan offered, it can affect your credit score, result in penalties or fees, or even lead to the repossession of your car. When you can avoid large monthly payments when buying a car, you reduce the chance of encountering issues when making your car payment.
How to Keep Your Car Payment Low Before Purchase
You don’t have to regret buying a car because your new car financing is too expensive. There are ways to avoid large monthly payments when buying a car before you purchase. Here are a few tips to keep your car payment low before purchasing your next vehicle.
Save for a Down Payment
When you make a down payment, you pay part of the car’s buying price before getting financing to cover the rest. Therefore, the higher your down payment, the lower your monthly payment will be.
Search for Car Loans With Lower Interest Rates
An effective strategy for getting the most for your money is to shop around at different banks, credit unions, and dealerships for the lowest interest rate. Even better, when shopping for the best interest rates, multiple inquiries for the same purchase within a given period only count as one inquiry. So you don't need to worry about any adverse effects on your credit score.
Take Out a Longer Car Loan
Most car loans have availability based on 12-month periods, so most people choose a loan time of 72 months for new cars and 60 months for used vehicles. By opting for longer loan terms, you’ll pay more interest but avoid large monthly payments when buying a car. Moreover, you always have the option to refinance after your purchase to pay your loan faster.
How to Lower Your Car Payment After Purchase
Sometimes, people can't avoid large monthly payments when buying a car. Fortunately, there are still options for lowering your monthly payment after your purchase. Here are a few ways to reduce your monthly payment after you buy a car.
Refinance Your Car Loan
By far, one of the most effective ways to lower your monthly car payment is by refinancing. When you refinance your car loan, the interest rate, term, and monthly payment take into consideration your current creditworthiness. If you’ve reduced your debt, boosted your credit score, or realized you initially took out a predatory car loan, refinancing can save you a significant amount of money each month.
Trade In Your Car
If you’re in a tight financial situation, trading in your car may be an easy solution to escape your high monthly payments. When you trade in your car, you can use the money you receive to buy another vehicle with cash or as a down payment for a more affordable option.
Consolidate Your Debt
Debt consolidation is a method for combining multiple individual debts into a single loan with one monthly payment. If you’re struggling to pay various bills each month, consolidating your debt may help you pay off your loan faster and with less stress.
Stop Into Piazza Subaru for the Best Financing Offers Today!
If you’re in the market for a brand new Subaru, stop into our dealership in Limerick to discover our complete financing offers, including incentives and great annual percentage rates. In addition, we have excellent Subaru lease specials to get you into a new vehicle. For more information, visit our showroom or give us a call today!
