I Was a Car Salesperson: 4 Tips To Save on Auto Payments in 2024

Laura Beck

With annual inflation rates high and only getting higher, many car buyers are feeling the pinch when it comes to their auto loan payments in 2024. You might be looking for a lower payment on an existing loan or want to get the best deal with your major new purchase. Either way, you’ve come to the right place.

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GOBankingRates spoke to a former car salesperson to get all the best tips to save on auto payments in 2024.

Renegotiate Your Loan

If you’re already locked into an auto loan with payments that are sky-high, you should try to renegotiate the terms of the loan. Original terms are not set in stone, and there’s a surprising amount of flexibility if you know what to do.

“Suppose you’ve proven that you can handle payments consistently, but it’s been getting tougher recently,” said Evaldas Zabitis, automotive expert at carVertical and a former car salesperson. “In that case, there’s a high chance that your bank or dealership may be willing to go easy on you and offer better conditions by extending the lease. However, don’t go overboard, and make sure you won’t be paying for longer than 7-8 years.”

First things first, you should start by reviewing your contract and checking your latest monthly statements. Are there fees that have been miscalculated or overstated? The more information you have, the better, when it comes to reaching out to the lender.

Next, call the lender and explain that your financial circumstances have changed and you need some adjustments. The lender would much rather renegotiate with you than not be able to recoup their assets. Depending on several factors, they might even be able to extend the loan term to reduce the monthly payment amount. Or they could potentially lower the interest rate, reassess vehicle value to reduce principal or find other creative ways to rework the deal. The key is to ask! Always ask.

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Refinance the Loan

Another option that can significantly lower your monthly payment is refinancing the existing loan. Just as you would shop mortgage lenders for the best rates and fees, the same opportunity exists for your auto financing.

“If your credit score has improved recently, you might be able to save a significant amount of money by refinancing your loan,” Zabitis said. “This simply means getting a new loan to pay off your existing auto loan. Check with your bank or a credit union to see what conditions they offer. This approach could save you lots of money and help you pay off the debt faster.”

There are a lot of loan marketplaces and banks that specialize in refinancing auto loans at competitive rates. Call around and see who can offer the best deal. You might be surprised how low they can go – just make sure they’re a reputable business with good reviews online.

Cut Some Expenses

If renegotiating the loan terms or refinancing isn’t an option for whatever reason, there are still things you can do. One is taking a good hard look at your other regular expenses and seeing if there are ways you could cut back.

“It’s easy to overlook small expenses, but they can add up over time and put a strain on your finances,” Zabitis said. “By identifying and cutting back on these expenses, you can free up money for your auto payments or even put some aside. Consider trimming unnecessary costs like streaming services, delivery memberships, additional cloud data storage, and excessive cellphone plans.”

For example, you may be able to stop some costly subscription services or try to eat out a little less.  You could even temporarily downgrade phone plans, cable packages or gym memberships to save a bit of cash until your loan is paid off.

On the housing front, you could find a place that’s cheaper to rent or, alternatively, put off a costly move. Maybe you could even rent a room in your house or apartment to offset the car payment? Get creative!

Sell the Car

For cases where even the most drastic budgeting can’t fix a hopelessly unaffordable auto payment situation, the final decision may be to cut your losses and sell off that vehicle.

“This solution is hard to accept but also often the most logical,” Zabitis said. “If a vehicle that should serve you daily is causing financial stress, you may have chosen the wrong option. At this point, selling the car, paying off the debt, and buying a cheaper car can be the quickest way to reduce auto payments.”

Check out online estimator tools to determine what your car is roughly worth based on make, model, age, mileage and condition. Local dealers can also provide cash offer estimates as you shop around seeking the highest bid.

Once you settle on an amount, you’ll need to request a payoff quote from the lender showing the remaining balance for that date, including any prepayment penalties or disposition fees. If the sale price won’t fully cover that payoff, you’ll have to cover the difference out of pocket.

But that may still make sense if it allows you to escape from a completely untenable payment situation. And if you end up with a small surplus after paying off the loan, you can use it for a modest down payment on a much cheaper set of reliable wheels going forward. Or, hey, buy an inexpensive used car outright. Look at your problem from all sides and new options might appear.

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This article originally appeared on GOBankingRates.com: I Was a Car Salesperson: 4 Tips To Save on Auto Payments in 2024

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