How Can I Reduce My Monthly Car Payment?

Your vehicle takes a big bite out of your monthly budget, and not just because of your loan payment. It’s expensive to own a vehicle in 2022 — but there are ways you can cut costs and put more cash in your pocket.

Many financial experts say vehicle owners should spend no more than 15-20% of their take-home pay on auto-related expenses. Unsure of what you’re spending? Use our simple car budget calculator to find out.

If you then see you are spending too much each month, take a look at these helpful cost-saving steps.

Many financial experts say vehicle owners should spend no more than 15-20% of their take-home pay on auto-related expenses.

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It all starts with your monthly car payment

While your loan payment is the biggest expense in your monthly auto budget, it’s also the easiest one to fix. It’s possible you are paying too much for your auto loan.  

Let’s say you financed your vehicle when interest rates were high. In that case, RateWorks may be able to create a new auto loan with lower payments and better terms using today’s highly favorable interest rates.

Auto loan refinancing is a powerful tool. RateWorks allows you to get a new quote with lower payments without the need for a third-party lender. Those lower payments free up monthly cash — and help relieve the stress on you and your budget.

Once you knock down the cost of your car payment, there are other ways to save on your monthly auto budget.

Car insurance

Insurance companies look at many factors to determine your auto premiums. Your home location, your driving record, your daily commute, your vehicle’s safety features, and even your age all play a role in how much you pay. Maybe it’s time to call your insurance agent and take a second look at your policy. Review your coverages, deductibles, and payment terms and ask for ways to reduce costs. An adjustment in your deductibles, for example, can often save drivers hundreds of dollars each year.

Fuel costs

The skyrocketing cost of fuel has been challenging for everyone. But even if you can’t cut back on the miles you drive each month, there are ways to spend less on gas. First, check your owner’s manual to be sure you are using the lowest, least expensive grade fuel required for your vehicle. Next, keep your car maintained with regular oil changes and tires that are often rotated and properly inflated. Then adjust your driving habits by maintaining speed limits, taking shortcuts, and running errands in bunches. If you can’t work at home more often — or carpool — these tips will help you save money.‍

Car maintenance

As your vehicle gets older, maintenance can grow more concerning and expensive. It’s also difficult to budget for unexpected repairs. Regular maintenance recommended by your auto manufacturer is the best way to plan ahead, keep expenses in check, and keep your vehicle on the road longer. By creating a simple checklist — of oil and filter changes, brake and pad inspections, tire rotations, and an annual tune-up—you’ll avoid being ambushed by that unexpected and costly repair bill.

As we noted, reducing your monthly car expenses starts with the right cost-effective loan. That’s why you should consider making RateWorks a part of your plan. Refinancing a costly auto loan has often saved drivers up to $1,200 a year. 

‍So let’s get started. Get a fast, easy and free online quote today that won’t impact your credit score.

If these insights have inspired you to learn more about saving why not see how much your monthly car expenses are. Or get a FREE car refinancing quote today.