Buying a car can be costly. In addition to insurance, regular maintenance, and fuel, you must consider monthly payments if you get a new car through financing. Unfortunately, cars are not appreciating assets, and you must factor in all these costs even if you’re struggling financially.
The good news is that owning a car is not all doom and gloom. You can still enjoy it and manage your monthly expenses.
Read on as we uncover eight intelligent ways to cut the cost of your car loan.
1. Consider Refinancing Your Car
Like refinancing a mortgage, you can also refinance your car to reduce the monthly payment and get better interest rates. You can find a new lender if your credit score has improved since you purchased the vehicle. Refinancing the car lets you quickly pay off the balance due to the lower interest rate. Furthermore, you get to save hundreds of dollars during the loan duration.
Do your research and compare different lenders to find one with favorable rates. Ensure you calculate other costs, such as new loan application fees, prepayment penalties, and vehicle appraisal fees, to determine if refinancing makes sense.
2. Negotiate With Your Lender
Negotiating with your lender can help you get better rates on your car loan. Some lenders will give favorable terms if you commit to a payment plan and have a good credit history. If your lender is not willing to negotiate, you can explore another option with a different lender.
Consider alternative options like loan payoff and debt consolidation to make your car payments affordable.
3. Get ahead of Your Car Loan by Making Extra Car Payments
If you’ve recently received a bonus, annual tax refund or come across a windfall, consider making extra payments to reduce your monthly car payments. Request that the extra payments be applied to the principal, not the interest.
4. Switch to a More Affordable Car
Circumstances change, and a car that was once practical and big enough when you had a large family may no longer serve you when the kids are all grown. Sometimes, you may have opted for a fancy car but later realized it was too expensive to repair or maintain. You can always change to a more affordable vehicle. The best part is that you can trade it in your current vehicle or sell it privately. Downsizing will give you more money that can go towards clearing your loan.
5. Avoid Extended Warranties and Other Add-Ons
Car dealers are clever and might try to trick you into buying extras like service contracts, gap insurance, and extended warranties. While these extras add some convenience, they come at an extra cost and can increase the total cost of your car loan. Decide if these add-ons are essential and skip them to cut costs.
6. Opt for Biweekly Payments Instead of Monthly Payments
Consider switching from monthly to biweekly to pay your car loan faster. Biweekly payments will help you save on interest rates and could save you a lot of money in the long run. Talk to your lender about this option to ensure no penalties or fees for making payments in advance.
7. Find out if Your Employer Offers Special Financing Deals or Discounts
Some companies have employer discounts or special financing deals that can help reduce the cost of your car loan. Ask the HR department if such packages are available to enjoy discounted rates on your loan.
8. Consider a Lease Takeover if You’re Struggling With Loan Payments
If you struggle to keep up with your current loan payments, you can transfer your lease to another person through a lease takeover. This will help you avoid costly early termination fees and could also give you money to get a more affordable car.
Implementing some of the tips above can help cut the cost of your car loan and free up some money in your monthly budget. If you’re considering negotiating or refinancing, ensure the terms are favorable, and you can keep up with the interest rate and principal amount.
Consider evaluating your entire budget to determine how to reduce other unnecessary expenses and allocate the extra money towards your car payment. Finding another source of additional income can help you reduce your monthly payments.
20 Frugal Tips From the “Grandparents Generation” That Still Apply Today
Many of today’s grandparents had parents or grandparents who lived through the Great Depression. They adopted many of the frugal living tips they learned and passed them on to their own children.
Grandkids sometimes think that they know everything and that their grandparents are out of touch with today’s world and reality. And while there might be a kernel of truth to that, grandparents still have a wealth of knowledge that can really help. They may need to be tweaked to fit the current world but they are still valuable.
20 Frugal Tips From the “Grandparents Generation” That Still Apply Today
13 Signs You’re Financially Better Off Than the Average American
Achieving financial stability where you can meet your current financial obligations comfortably and still plan for the future is a goal everyone strives to attain.
However, while you may be able to pay your bills, save for vacations, and afford to dine out occasionally, you may feel left behind, especially if you compare yourself with your peers or others with higher salaries. You may be doing way better financially than the average American.
13 Signs You’re Financially Better Off than the Average American
14 Companies That Will Give You Free Food and Products Just for Asking
More companies are now offering free samples to get customers to try a new product. Over time, these companies gain loyal customers and can increase their sales. As a customer, you also get to test out free products and sample foods you’ve never tasted.
Read on as we explore some companies that will give you food and products for free just by asking.
14 Companies That Will Give You Free Food and Products Just for Asking
14 Powerful Frugal Living Tips for Middle-Class Americans
Inflation is high. This means that we don’t all need to understand, but we do understand that prices are high on basically everything. Everything costs more, and things are tough. Basic necessities like housing and healthcare are becoming increasingly unaffordable for most people.
As middle-class Americans adjust to the new reality, here are some powerful frugal living tips that can make our lives easier and better.
14 Powerful Frugal Living Tips for Middle-Class Americans