It’s no secret that a car purchase, along with a home, is one of the most significant investments we’ll make in our lifetime. A car purchase, whether through car credit, or purchasing out-right can be very costly. That’s not even factoring in the additional costs after making your purchase, such as – refuelling, insurance, repairs and servicing.
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Once you’ve added up all the expenses, it’s no wonder your car can be one of your biggest monthly outgoings. This can be so stressful, especially if you’re already experiencing financial strain. If you’re feeling the crunch of life becoming so much more expensive, one of the ways that you can alleviate some of the tension is to reduce your car payments.
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There are various ways to lower your monthly car credit payments, but the one you choose very much depends on your current financial situation. From refinancing your car, to taking out car lease.
Here are some of our top suggestions to help you reduce your monthly car credit payments.
Buy A Used Car
If you really need a car, always opt for a second-hand car over a new one. The second you drive a new car off the forecourt, it will drastically go down in value. Whereas an older car will keep its value for much longer.
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Also, buying a used car on finance will mean you pay less per month than you would a brand new car. However, don’t go buying something so old it won’t last you very long, or will end up costing you more in constant repairs. Try to go for something in the middle – reliable, yet cost effective.
Lease A Car
You might be struggling to meet your current monthly car payments for various reasons. Whether you’re suffering from a temporary financial setback, or have purchased a car that’s more than you can realistically afford. Therefore, selling your current motor and leasing a new one is one way you can ease the strain.
Typically, car leases have lower monthly repayments than purchasing out-right since you’re paying to drive the car for a set period and then return it. You could even lease a car as and when you need it – you’ll be surprised at how much you want to start walking everywhere!
Car leases are also advantageous if you’ve recently sold your vehicle and are dubious about getting trapped by a long-term auto loan. Or perhaps you’re the type of person who likes experimenting with many different cars.
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Lease dealerships offer a range of new and used cars for lease, which lack the price tag of a brand-new vehicles. They also often come fully serviced so that’s another thing you don’t have to worry about. If you’d like to reduce your monthly car payments further, you could consider opting for an electric car lease.
Electric vehicles are more affordable to run than their petrol and diesel counterparts. To discover more, consider browsing Lvelectrix.co.uk. This website is filled with some great guides on how leasing an electric vehicle could help you save on your monthly car bill.
Sell Or Trade-In Your Car
Realising you’ve purchased a car that’s more than you can realistically afford is a hard pill to swallow, especially if you love the car. You may find the prospect of selling or trading it disheartening, or even as though you’re taking a step backwards. However, replacing it with a cheaper, smaller vehicle will feel so much better when you have more money to pay your bills.
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Selling your car yourself instead of approaching a dealership will ultimately help you get a better price for the vehicle. However, doing it this way will likely take longer as you don’t have their publicity and contacts, but it’s generally worth the wait.
Best-case scenario, you want to be able to get enough from selling your car to pay off any outstanding debt. To achieve this, you’ll want to ensure it’s as ready for sale as possible. To get the best asking price, simply do the following…
- Declutter, vacuum, clean and polish the entire car thoroughly
- Take a variety of photos in good lighting and at different angles
- If you have an auto loan, call your lender to find out your payoff amount, then list the car as a little more than the amount so you have room for negotiating while still being able to pay off your debt
- List your vehicle on peer-to-peer sites such as Facebook, eBay, Facebook Marketplace etc
On the other hand, if you don’t want the stress of selling it yourself, selling to a car to a dealership is you next best option. Although before doing so, it’s worth researching the current value of your vehicle to ensure you get a fair trade-in price.
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Overpay On Your Loan
It might sound like an odd thing to do, especially if yo don’t have much in the way of spare funds. However, paying off your car loan as fast as possible will help you in the long-term. The longer you’re paying off your loan, the more you’ll be paying in interest fees. As with the mortgage on your home, you want to pay it off as fast as possible.
Car Credit – Refinance Your Car
If you’re looking to reduce the monthly payments on your car loan, you could also consider refinancing it. Refinancing enables you to switch your existing loan with a new one. By opting for a new loan, you might just be able to get a better deal that will hopefully reduce your car payments. Providing you’ve met each payment on time, your lender may reduce your interest rate, extend your loan or both, which will reduce your monthly payments further.
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Suppose you decide to go down the refinancing option. In that case, it’s worth researching and comparing different refinancing lenders to view multiple offers. Give yourself the best chance of lowering your payments as much as possible. Many providers have free-to-use refinance calculators, which won’t affect your credit score, on their sites for potential customers to compare offers with their current loans.
Talk To Your Lender
If you’ve been a good customer, you could always try talking to your lender to see if they’ll make any exceptions. So long as you’re honest, they should be willing to accommodate you and may allow ‘forbearance’. An outlined period in which you can make reduced payments or skip them altogether.
Another way to reduce payments is to extend your car credit loan. The longer the loan period, the less you’ll have to pay each month as it gets stretched out overtime. However, in the long run you will likely have to pay off an even bigger loan due to the extra interest accrued.
Get Rid Of Your Car Completely
It might sound like a drastic option, but selling your car altogether would give you the most amount of money. Of course, some of us really do need a car for work, the kids…etc. However, there are more people who really don’t need a car, especially not all that often, or every day.
See how long you can go not using your car – i bet you’ll be surprised at how long you can go without it. Here are a few things you could do instead of using your car…
- Car share
- Walk or cycle
- Get the bus or train
- Use supermarket delivery services for your shopping
- Borrow someone else’s car
- Hire or rent a car from a friend/family member
- Lease a car
The next time you go to get in your car, ask yourself if you could walk or cycle instead. Or perhaps someone you know might be going in the same direction as you to car share. If a family member is going to the shops, maybe you could tag along with them, or get your shopping for you as well.
There are so many ways you can reduce your monthly car credit payments, or the cost of your car completely. Which of these would you do?
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