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How To Get Lower Car Payments For Low Income People

Written by: Jody Adams
Last updated: January 31, 2024

For low-income households, car financing expenditures are the second largest monthly expense behind housing costs. The monthly payments for a new or secondhand vehicle usually range from $500 to $700, which is 25% more expensive than a decade ago.

Increasing gas prices and record-high inflation rates are making it even harder for low-income car buyers to afford such steep monthly payments. Luckily, there are ways you could get lower car payments apart from car assistance programsContinue reading the article below to learn more.  

Lowering Your Car Payment In 2023

Your current financial situation may limit your ability to settle your monthly car payments on time. If you are experiencing any of the situations listed below, it is best to make the necessary adjustments immediately.

  • Although you were qualified for a lower-interest loan and monthly payments, you mistakenly financed your vehicle at an expensive car dealership.
  • You purchased or leased a modern and more expensive vehicle that is way beyond your fixed budget.
  • You are currently having trouble paying off your medical bills from a work-related injury, which also affects your car payments.
  • You manage to increase your credit score, allowing you to qualify for cheaper monthly dues and lower loan rates. 

What You Can Do To Get Lower Payments In 2023

You can end up in financial ruin by having a high-interest auto loan with steep monthly payments. The good news is that you can get lower auto payments and better loan terms with these simple adjustments: 


Your current loan can be replaced with a new one through refinancing, which should result in a lowered monthly auto payment. With a history of on-time payments, refinancing also enables you to qualify for a lower-interest-rate loan with a longer recompense term, making your monthly payments more affordable. 

Selling Or Trading

It is more reasonable to buy a cheaper car with reduced installment payments rather than falling behind on your monthly dues and damaging your credit. Before selling your car, contact your existing lender to determine the loan payoff amount. 

Alternatively, you may trade in your current vehicle to a local dealership if you still want to acquire a nice car for cheaper monthly payments and lower loan rates.

Lease A Car

By leasing a used vehicle instead of buying a new one, you may be able to reduce your monthly payments. Since you're only paying to drive the car for a set amount of time rather than trying to acquire it, car leases typically have better financing terms and lower payments. 

Look Into Lease Buyout Loans

A lease buyout loan provides funding to help you purchase the vehicle you're currently leasing for a lower predetermined price. However, it is important to consider that lease buyout loans typically have higher interest rates than loans for brand-new vehicles. Also, not all leasing companies permit the purchase of leased automobiles.

Talk To Lenders

Speak with your lender immediately if you're in danger of missing an auto loan payment. Most will be accommodating, especially if you're going through some temporary financial problems.

The lender might even consent to "forbearance," which is a pre-arranged length of time during which you are allowed to skip your payments or provide a lesser amount than agreed upon.

When Is The Best Time To Lower Car Payments?

The best time to negotiate a lower monthly payment is before you buy or lease a new or secondhand vehicle. Before financing an automobile purchase, we recommend looking around for dealerships that offer long loan periods, affordable monthly payments, and low-interest rates.

Other Ways To Prevent A High Car Payment

There are also other ways you could prevent lucrative monthly payments when purchasing or leasing a vehicle, such as:

  • Lower the amount financed. Your car payment should be lower the less debt you have. To lower your monthly payments, save aside money for a sizable down payment of at least 20% of the initial cost of the vehicle.
  • Shop for a low APR. Your monthly car payment may be reduced by paying less interest. With a lower APR, more of your monthly payment will go toward lowering the debt amount and speeding up the loan's repayment.
  • Get a longer loan term. Generally speaking, we do not advise obtaining a loan with a longer duration since the interest accumulates over time. However, longer loan terms allow you to have a lower monthly minimum payment.

Frequently Asked Questions

Below are some of the most commonly asked questions on how to get a lower car payment. 

Does refinancing a car hurt your credit?

Refinancing your auto loan will result in a hard credit inquiry, which will temporarily lower your credit score.

How much will $1000 lower the car payment?

A down payment lowers the amount you'll need to finance and speeds up loan repayment. Typically, a down payment of $1,000 lowers your monthly payment by $15 to $18. 

What is too much for a monthly car payment?

Experts say that if your monthly car dues exceed 30% of your overall income, you have a hefty car payment. 


Taking out a car loan could be an option for you if you need a vehicle but don't have the income to buy one. You can also lower your interest rates and reduce your monthly car payments. 

If you need help buying a car, check out our article about grants to buy a car.

Having trouble finding the perfect vehicle? Check out this article from Gov Relations on the top 5 working cars for working people.

Jody Adams
Jody Adams is an accomplished editor-in-chief with a deep understanding of social care and government benefits issues. With a background in journalism and a master's degree in Public Policy, Jody has spent her career shaping the narrative around social policies and their impact on society. She has worked with renowned publications, effectively bridging the gap between complex policy analysis and public understanding. Jody's editorial expertise ensures that vital information on social care and government benefits reaches a broad audience, empowering individuals to make informed decisions.
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