When it comes to car loans, there are a few different things you can do to keep your monthly payments low. Here are 8 tips to help you save on your new car loan payments each month:
1. Make a larger down payment
When you make a larger down payment, you reduce the amount of money you need to borrow and, as a result, your monthly payments will be lower.
2. Consider your loan term
Choosing a shorter loan term will actually increase your monthly payments, but you’ll be paying off the loan over a shorter period of time – which means you’ll end up paying less over the life of the loan. If your main goal however is simply to make the lowest possible monthly payments, you can extend the length of your loan term and enjoy lower payments each month. Some lenders will allow you to have a loan term of up to 7 years.
3. Compare interest rates
Interest rates can vary dramatically from lender to lender, so it’s important to compare interest rates before you sign up for a car loan. Chances are you’ll be able to find a lender who will offer you a lower interest rate, which will translate into lower monthly payments.
4. Get pre-approved for a car loan
If you already have a car loan pre-approved, you’ll know how much money you have to work with and you can focus your search on cars within your budget. This will also help you avoid being taken advantage of by car salesmen who might try to sell you a more expensive car than you can afford.
5. Avoid buying a new car
If you’re looking to save money on your car loan, it’s a good idea to avoid buying a brand new car. New cars come with much higher interest rates and, as a result, your monthly payments will be much higher. Consider buying a used car instead – you can often find great deals on used cars and you’ll still enjoy the benefits of having a car.
6. Negotiate the price of the car
Just like with anything else, you can negotiate the price of the car when you’re buying it. Car salesmen are often willing to lower the price of the car in order to close the sale, so don’t be afraid to ask for a discount.
7. Look for car loans with no origination fees
Many lenders charge an origination fee when you take out a car loan. This is basically a processing fee that the lender charges for setting up the loan. If you can find a car loan with no origination fee, you’ll save yourself some money each month.
8. Use a car loan calculator
A car loan calculator can help you figure out how much your monthly payments will be for a given car loan. This can be helpful in narrowing down your search for the best car loan for you.
Use these tips to help you save on your monthly car loan payments and get into the car of your dreams without breaking the bank!