5 Tips for Reducing Your Auto Loan Payment in Dallas
As Dallas residents follow the Dallas City Council debate over pay-by-phone versus coin-operated parking meters, they can start shopping for a new car in anticipation of spring and summer car sales — maybe even a new model with parking-assistance features. For many car buyers, the monthly payment on an auto loan is more important than the total amount of the loan. Finding a lender like Air Force Federal Credit Union that offers low car loan rates is a key part of reducing the monthly payment amount, but there are several other considerations that can go into the overall decision. Below are five tips for keeping an auto loan payment low:
1. Get a low interest rate from Air Force FCU.
Air Force FCU is currently offering auto loans with rates as low as 1.49% APR* for terms up to 72 months to qualified buyers. Finding the lowest possible interest rate is an easy way to keep the monthly payment down because it means the additional monthly cost of interest is kept in check. The current average interest rate in Dallas for a 48-month auto loan is hovering around 4.35% APR, according to GOBankingRates’ data — that is significantly higher than the rates being offered by Air Force FCU.
2. Extend the term of the auto loan.
One way to keep car payments down each month is to extend the term of the loan. While doing so can mean paying more in interest over the life of the loan, the additional cost could be minimal when factoring in a low rate like the rates offered by Air Force FCU. It is important to remember that a longer loan term can take longer to pay off, but it can keep the monthly cost down. Opting for a longer loan can be a good option for people who plan to keep a car for more than a few years.
3. Take out a smaller auto loan for the same car.
While it might not be practical for all buyers, one way to keep the monthly payment amount low is to make a larger down payment and borrow less for the car. This option can be particularly appealing for people who prefer to get a new car every few years.
4. Use a monthly payment amount to negotiate.
Car buyers who have a loan from a financial institution ready before they go to a dealership can avoid some sales pressures from dealers and negotiate more effectively. Keep the desired monthly payment amount in mind when negotiating the total price of the car. Buyers need to be clear with dealers about the monthly payment amounts they can afford and expect to pay so that they can get car prices that fit their budgets.
5. Select a more affordable car.
Selecting a similar but lower-priced car is an immediate way to reduce the monthly expense associated with an auto loan. Skipping a few features or shopping across brands for an alternative can often result in significant savings on the total cost of a new car that is comparable to the higher-priced first choice.
Start looking for a car loan and car options now in order to be ready to make a wise choice when great spring and summer car sales take place. Doing research now can really pay off in the long run.
Air Force Federal Credit Union is a GOBankingRates client.