How to Lower a Current Car Payment

In most households, every penny counts. As of 2009, 42 states experienced a decline in personal income, according to the Wall Street Journal. This leaves many families feeling the financial pitch more than ever. If auto loan payments make up a big chunk of your monthly budget, it might be time to trim costs. Checking out auto loan refinancing options may help drive down monthly payments.

Instructions

1

Check your credit score. If you haven't checked your credit score recently, order a free credit report online (see References). Most financial institutions use "risk-based lending." This means that the higher the credit score, the lower the interest rate. If you find credit report inaccuracies, dispute the findings with the reporting agency. This can be accomplished by filing out their online dispute form. Disputes are typically resolved within 45 business days. Resolving these issues can help boost credit scores.

2

Shop auto loan rates. Online comparison tools such as Bank Rate allow you to compare auto loan rates across the country. When reviewing rates, pay attention to the loan terms. Typically, the shorter the auto loan term, the lower the rate.

3

Negotiate with your existing lender. Losing customers is very expensive. Financial institutions would rather retain your business. Contact your lender and present them with the competition's auto loan interest rates. Ask them to lower your interest rate, which will lower your monthly payment.

4

Check out longer loan terms. Another option for lowering a car payment is refinancing into a longer loan term. With this option, you'll be paying more over the long-term (higher financing costs). However, stretching a loan term out over 60 months versus 48 months will drive down monthly payments.