Is Your Car Payment Too High? Here’s What You Can Do
A little while ago, you bought a car and it’s been good. It gets you where you need to go and hasn’t given you any grief. But there is a problem – you can’t really afford the payments. When you signed up for your car loan, you had bad credit. Or maybe you hadn’t had credit before at all. As a result, your interest rate is higher than normal, and now you find your car payment too high. It’s almost too high to manage.
And when you have a car payment too high, it causes strain everywhere else. You can’t afford good car insurance coverage and you’re watching how much gas you burn. Sometimes you even take the bus to work or school because it’s cheaper than driving – but also less convenient.
But is there anything you can do? If you have a car payment too high for comfort, there are a few ideas you can try.
How to Deal with a Car Payment Too High for Comfort
Sell Your Car
One idea is to sell your car. Get rid of it altogether and go back to taking public transit, Uber, and taxis. Of course, the biggest issue is obvious: you no longer have the freedom a car gives you. You’re restricted to times when transportation is available. If you work shift work, that can be really difficult for you. But at least you won’t struggle with your car payments….
Refinance Your Loan
If you’ve developed your credit rating responsibly since buying your car, there’s an outside chance you could refinance your car loan. What that means is you’ll have to call the lender, explain the situation, and throw yourself at their feet to beg for mercy. In many cases, lenders aren’t willing to budge on the interest rate or term and you’ll be stuck with your same high car payments.
Buy a Different Car
It sounds counter-intuitive, doesn’t it? But it’s true. If you buy a different car, even a new Toyota, your car payment could be much lower. It depends on your credit rating since you’ve take on your car loan, though. If you’ve been good with your payments as well as any other credit you may have, your credit score is likely to have gone up. When you trade in the car with your car payment to high, you can get into a vehicle with interest rates as low as 0 percent or a term of 72 months – maybe longer. Even though your car is more expensive, you could very well have a lower car payment.
Is your car payment too high? Let Jay Wolfe Toyota of West County try to help. We’ll work hard to get you into a new or pre-owned vehicle with competitive terms and rates to lower your payment.