So you’ve decided that you want to buy another car, but you’re worried about the monthly payments. Maybe you’ve already paid off your current car, meaning you’d be taking on a new payment, or you know getting a nicer car is simply going to cost you more each month. If this sounds like you, you’re not alone. The monthly payments are one of the most common reasons for why people are unable to afford a new car, and they end up driving their current car much longer than they’d like. To help you out, here are a few ways to lower the monthly payments when you decide to get a new car.
Shop for a Cheaper Car
First, consider getting a cheaper car. You might have your heart set on a certain car, but no matter what you do, you won’t be able to bring the monthly payments down into a range you can afford. Your best option in this case is to settle for another car. Chances are you can find a car model that you love that is a little closer to your budget. Or, look for the same car model that you want, but get it used and a few years older. As long as it is in good shape, a used car is a perfectly fine choice, and allows you to get the car you want while remaining within your budget.
Put Down a Larger Initial Payment
One thing that really impacts how much you need to pay per month is the initial payment. The more you can pay when you first purchase the car, the lower the payments will be each month. So if you want to lower the monthly payment, consider saving up some extra money before you make the purchase. Add some more to your savings each month, and before long you’ll be able to put down a larger amount initially, and have a lower payment for the term of the loan or lease.
Improve Your Credit Ratings
Credit ratings play a large role in determining what sort of loan terms you can get. The better your credit score, the better the terms. With that in mind, it’s a good idea to not only know your credit score before you start to shop, but to work on improving it. Improving your credit score usually takes some time, but since it impacts more than just your ability to get a lower monthly car payment, it’s well worth the effort. Work on paying down your other debts, making payments on time, and utilizing your credit wisely. If you can do this, in a few months your credit score should rise, and the loan terms available to you will improve.
Shop for Better Insurance
When figuring out the cost per month of owning a car, we can’t forget about car insurance. Car insurance adds an additional cost on top of the car payment, making the monthly payments even harder to afford. When shopping for a new car, it’s important to keep the cost of insurance – and the fact that it might rise because of your purchase – in mind. If you find that your insurance is too high, consider switching to another provider. There are ways to find cheaper car insurance, and doing so will make affording your next car a little easier.
Get the Most for Your Old Car
If you plan on getting rid of your current car when you purchase a new one, it’s important to get as much for it as you can. Talk to the dealer first and see what you could get for a trade-in. If it seems low, do some research into what you could get if you sold your car privately. Finally, if you know your car is a dud and you won’t get much for it, consider looking into junk cars for cash. No matter what kind of shape your car is in, you should be able to get something for it, and then put that amount towards your new purchase.
Know How To Work The Dealer
Finally, before you shop, you should learn some tricks about working with car dealers. For starters, they are more likely to offer better terms if you visit a dealership at the end of the month, or at the end of the quarter. You’ll also want to brush up on your negotiating skills, and have plenty of other options so you don’t feel compelled to make a purchase. The more you prepare before you go, the better off you’ll be.