Can’t Afford Your Car Payment? Try This
You want to pay the least amount possible to keep your car yet stay within your budget. Here are several methods to achieve that goal.
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Ways To Get A Cheaper Car Payment
It’s easy to get into a car loan that you cannot afford. And many have made that mistake recently, which is why repossessions are skyrocketing. If you fear your car will soon be repossessed because you’re having trouble making payments, here are ways to fix this common financial issue.
Talk To Your Lender
Have you missed a car payment recently because your bank account has run dry? Instead of ignoring your lender or missing further payments, talk to them and see your options. The lender could work with you by letting you defer one or two payments due to short-term hardship. After that, you may need to restructure your loan to make it more affordable.
As a long-term solution, ask your lender if you can lengthen the loan. Yes, this will result in more interest charges over the loan’s life, but it will also lower your monthly payment to make it more budget-friendly. And if you’ve been making on-time payments or your credit score has increased since you bought the car, ask the lender if they can lower your interest rate. That, too, will result in a lower payment.
Refinance Your Car Loan
Refinancing is another possibility. The goal here is to replace your current vehicle loan with a new one that has a lower interest rate, a longer term, or both to make your monthly payment more affordable.
There are plenty of refinance lenders that can help lower your payment. To find the best loan for your needs, prequalify with those lenders to get a preview of what your new financing would look like. The benefit of prequalification is that it does not require a hard credit pull that can lower your score. From there, you can pick the best lender and formally apply for the loan.
Change Cars
It may be painful to let go of your current car, but it may be necessary if it no longer fits your budget. You can trade in your car or sell it and get a cheaper one, which should result in a lower monthly payment. And if you want to get rid of your payment altogether, use the proceeds from selling your current car to get something super cheap that you can pay off in cash.
Look At Leasing
You may qualify for a lease, which typically gives you a lower monthly payment than if you were trying to purchase a car. Consider this option if you don’t put a ton of miles on your car, want a lower payment, and would like to drive a newer model.
Rent Out Your Car
Do you live in a city that’s highly populated or gets tons of visitors? Then renting out your car occasionally could help you cover some of its payments. You don’t need a luxury or sports car to do this either, as Turo is a site that lets people rent out standard vehicles like a 2020 Nissan Altima for up to $60 per day.