How to Reduce Car Payments

The benefits are many when you reduce your car payments. Financial problems can strain relationships, affect your level of concentration at work, and even lead to health problems. Your quality of life also diminishes if you live in a constant state of panic and worry about losing your vehicle. Fortunately, manageable car payments can reduce the stress level in your life and improve your financial situation. What's even better, you don't need professional help to lower your auto payments. You can do it yourself.

Instructions

1

Refinance your car. A lower annual percentage rate (APR) can significantly reduce your monthly car payments. This is particularly true if you currently have a high APR and your credit has improved since your car purchase. Look for a car loan with an APR of at least 1 percent lower than your current loan.

2

Trade your car for a less expensive one--either an older vehicle or a less expensive model. For example, an automobile that costs one-fourth less will reduce your car payments by one-fourth. If your current monthly payments are $400, you will pay $300.

3

Sell your current automobile. Pay off the loan, and lease another vehicle. One benefit of car leasing is that you can often find a newer, more expensive auto and still have lower monthly payments.

4

Renegotiate the term of your auto's purchase agreement. Although not advantageous, this option will reduce your monthly car payments. Once your financial situation improves, you can make higher payments to pay off the loan.

5

Eliminate your car payments. Sell your car and buy an old beater for about $1,000 or less. You can upgrade once your situation improves. You may have to put up with negative comments from family members, friends or co-workers. However, your stress level will diminish, and you'll be able to focus on the more important things in your life.