Good ways to lower monthly car payment?

[swbsam]

My wife and I got a new car about 8 months ago, when I started working in the suburbs of NYC (there's no way to get here by public transportation). We got the cheapest new car that we could, a Nissan Versa, and bought new not due to prestige but because we wanted a good warranty and, honestly, the Versa was cheaper than most used cars even.

Now we have been paying $350 a month, which we could handle then and could handle now. Since then we've worked very hard to improve our credit, paying down our balances and settling old debt - my personal credit has gone up 50 points, and my wife's doing her darndest as well.

We're also about to close on a house and figure, after the dust settles on that, we may look to refinance the car.

Good idea? Bad idea? Other options?

 

[ivan2]

$350 is nothing, what's your rate?

 

[swbsam]

Originally posted by: ivan2
$350 is nothing, what's your rate?

Our credit was pretty mediocre back then (we just got married) so it was about 9%. I figure by the time we seriously consider this (about 4 months from now) we'll be on the high end of mediocre 🙂

 

[JulesMaximus]

How long is the loan on the car? Honestly, it might just be better to pay it off as soon as possible by just making your current payments until it's done with.

 

[ViviTheMage]

psssh, I pay 400$ a month on my Audi, financed 22k, on occasion i can put a lot more into it then 400$...don't stretch yourself too thin, you will hate it.

 

[JohnCU]

damn i pay $470.73

 

[nakedfrog]

Originally posted by: JohnCU
damn i pay $470.73

Weren't you talking about getting a new car, too?

 

[JohnCU]

Originally posted by: nakedfrog

Originally posted by: JohnCU
damn i pay $470.73

Weren't you talking about getting a new car, too?

i do want a 370z but i talked myself out of it

 

[KentState]

That's not a bad car payment these days. I'm up around $650 and the next car will probably be around that.

 

[swbsam]

Originally posted by: KentState
That's not a bad car payment these days. I'm up around $650 and the next car will probably be around that.

Yikes.

Thanks guys for the informed postings - no one in NYC owns a car so I have no basis of comparison! I just felt $350 was a big chunk of change to go out every month.. Knowledge is power, I'll just continue paying my econo-box up at the current rate then 🙂

 

[amdhunter]

Just pay off what you have. Refinancing is dumb, IMO.

 

[mugs]

Originally posted by: swbsam

Originally posted by: KentState
That's not a bad car payment these days. I'm up around $650 and the next car will probably be around that.

Yikes.

Thanks guys for the informed postings - no one in NYC owns a car so I have no basis of comparison! I just felt $350 was a big chunk of change to go out every month.. Knowledge is power, I'll just continue paying my econo-box up at the current rate then 🙂

If/when you can get a lower rate, I don't see any reason not to refinance it. 9% is a pretty high rate for a new car.

I've never done it myself, but I assume you get a used car rate when you refinance it. Used car rates are higher than new car rates, but you can still get a lower rate than 9% if your credit improves. You might save ~$30 a month if you get it down around 6%.

Play with the numbers here to see what you'd be paying: http://www.bretwhissel.net/cgi-bin/amortize

Just don't extend the term of the loan when you refinance. Since you'll be dealing with a bank, they should be more honest than the car dealership's finance guy. Don't let them entice you into a 72 month loan with the promise of lower payments. Know what interest rate you're paying.