Lower Your Car Payment

If it's important that you reduce the monthly payment, or the down payment, there are a variety of ways to make that happen. For a lot of reasons, which will probably be obvious, most people don't want to hear about them. But, here they are.

Bad Ways
Bad ways to reduce your monthly payment, all of which will end up costing you more money in the end are:


Lease instead of purchase. The attraction of a lease is that it enables you to drive around in a more expensive vehicle than your personal financial situation would, and should, rightfully allow you to purchase. You think it's great because you're in a more cool car than you would have otherwise. Some folks, in certain situations and with good self-control, can take advantage of a lease. That description does not include a lot of people. Quite often, leases are used by obsessive-compulsive buyers who just have to have that new car, right now, but don't want to, or can't, actually pay for it. Quite often, at the end of the lease you have nothing except, in all likelihood, a penalty for all the extra miles you drove.


Lease, but at a lower annual mileage limit. When you lease you are renting it based upon use. You can sign up for 10,000, 12,000, 15,000 or even more miles as your annual limit, but the higher the number, the more it increases your monthly payment. To reduce the monthly payments, many buyers choose lower annual mileage limits, figuring they just won't drive as much. Sure, you're just not going to drive as much. Did the distance to your job all of a sudden get shorter? If you didn't sign up for a sufficient limit in the beginning, the cost for the extra miles will be added at the end, and that penalty can get rolled over into the next new car. You will be driving a new car, but still paying for the miles on the old one.


Purchase, but stretch the payments over a longer period. Instead of 48 months, run the payments out to 60 months, or maybe 72, 84 or even 96. You won't have any equity in the thing until you're at least about two-thirds through the payment schedule, and how much are you going to like it then? So you'll trade it in before it's paid for, and take what you're upside-down (the negative difference between what the car is worth and what you owe), and roll that into the next one. It is not unusual for people to be upside-down by over $10,000, and just on one car. Huge numbers of people are paying not only for what they're driving now, but the two or three, or even four, or more, before that.

Good Ways
Good ways to reduce your monthly payment, which will save you money, but a lot of you won't like them are: