How to Lower Your Car Payment
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- How to lower car payment before you buy
- How to lower a car payment on an existing loan
- Loan comparison tool
If you need more breathing room in your monthly budget, try lowering your car payment by refinancing, lengthening your loan term, or considering a less expensive vehicle.
Car insurance comparison shopping app Jerry has compiled everything you need to know about how to get a lower payment on your car loan and find the best insurance rates to help you save.
If you want better loan terms, Jerry can help you save. The free Jerry app gathers affordable quotes and helps you through every stage of the process. Talk about making life easier!
Here’s what you need to know about lowering your monthly car payments.
How to lower car payment before you buy
Here are a few helpful ways that you can lower your loan payment before you buy a vehicle.
When it comes to finding the best financing rate on your loan, it pays to shop around.
Use online loan calculators to get a better idea of the monthly rates you can afford. Be sure to explore different options, including banks, credit unions, and online and specialized lenders. Getting pre-approved before you make an offer on your next car will give you leverage to negotiate a better rate with the dealership.
Remember, the best loan isn’t usually the one with the lowest monthly payments. Focus on landing a better interest rate and shorter loan payment term instead. If you need to free up funds in your monthly budget, saving on your car insurance is a good place to start.
If you’re hesitant to switch plans or insurance providers because you’re worried about the work involved, don’t be! Jerry does all the paperwork for you. You’ll never have to print out anything, go to the post office, or get on the phone. Jerry handles it all—really!
Save up for a down payment
Putting down 20% or more upfront can lower your monthly payments and help you walk away with a better long-term rate.
Even if you don’t have the full 20% to put down, a down payment of any size can help lower your monthly payment rates. Taking a few months to save up and improve your credit score will give you more power to negotiate a loan that works with your budget.
You can use online credit score tracking tools like Credit Karma to stay on top of your credit while you save. Knowing your credit score will help you apply for the right kind of loan and avoid unnecessary dings on your report.
Lengthen your loan term
You can opt for a longer loan term in favor of more affordable monthly rates—but it will cost you more in total interest.
Lenders will often be willing to stretch out your loan term because they know they will collect more interest in the long run. Be forewarned that a longer loan term might come with increased APR, too. In taking out a longer loan, you put yourself at greater risk for ending upside down—owing more on your loan than your car is worth.
Generally speaking, it’s better to opt for higher monthly payments in favor of a shorter loan term. If you’re struggling to budget for your monthly payments, saving on your car insurance coverage will help. The average Jerry user saves $879 a year when they use this simple car insurance comparison app to find the best rates on insurance coverage.
Consider a more affordable vehicle
Opting for a more affordable vehicle is one of the most practical ways to cut your monthly payments without having to pay more in the long term.
Keep in mind that monthly financing rates aren’t the only thing to consider when budgeting for a new car. You’ll also need to factor insurance costs into the price—and some vehicles cost you more to insure than others.
Using a smart insurance shopping tool like Jerry will help make comparison shopping a breeze.
Jerry will generate competitive quotes from top providers in less than a minute. Jerry gathers your information from your past insurer, so you’re not responsible for any long forms or phone calls. Basically, you get all of the savings and coverage, with none of the hassles.
Key Takeaway Shopping around for the best loan, saving up more for a downpayment, lengthening your loan payment, or purchasing a more affordable car are all easy ways to lock in a more affordable monthly rate before you buy.
How to lower a car payment on an existing loan
Even if you already have a loan, you might be able to lower your monthly payments to make them more affordable.
Talk to your lender
If you feel like you’re at risk of slipping behind on your payments, reach out to your lender as soon as possible.
Sometimes a lender will be willing to renegotiate the terms of your loan or accommodate your budget to help you get back on track. Remember that if you want to lower your monthly payments, you will have to increase your loan term and maybe accept a higher APR.
Refinance your loan
Refinancing your loan can help you get better terms that work with your budget.
When you refinance a loan, the lender will pay off your existing loan and give you a new one.
Refinancing can work in your favor if average car loan interest rates have dropped or if you’ve improved your credit score since you took out your original loan. If not, you’ll probably have to accept less favorable loan terms and new loan fees in exchange for a lower monthly payment rate.
Consider a trade-in
Trading in for a more affordable vehicle can help lower your monthly payments without refinancing.
While the dealership might not give you the best price for your trade-in, you can use that value as a down payment to reduce your loan. If you choose a cheaper car to insure, you can put the savings toward your monthly payments to help you save more in the long term.
Key Takeaway To get a better monthly rate on your current loan, consider refinancing or renegotiating your loan with your lender or trading in your car for a more affordable option
If you’d rather leave the hard work of gathering car insurance quotes to someone else, use Jerry. This free app collects quotes from up to 45 top insurance companies in seconds!
Jerry’s car loan comparison tool
You deserve a loan package that works for your budget and the confidence that you’re getting the best deal on your auto loan refinance. Jerry can help you get both.
Comparison shopping is the most effective and efficient way to make sure you’re getting the best refinanced auto loan.
You can call around to compare loan terms—but who has the time (or patience) for that? To easily compare multiple rates from top lenders, use Jerry.
This Jerry user was thrilled with their experience, giving the app five stars:
“I cannot express enough how amazing Jerry is. Everything was just so easy and smooth—the whole experience was amazing. They took care of everything, including canceling the current policy I had so I didn’t have to.Amazing.” — Satisfied Jerry customer