Lowering Your Monthly Car Payments

Leasing is never a good choice: you don't even own the car.

It's Time to Get That Old Car Fixed!

If your monthly car payment is $380 and repairing your older car would cost $2000, then in 4 months or so (depending on fuel use, insurance, etc.) you'll be near or around the break-even point.  From then on your car or truck will only cost you insurance, maintenance and fuel.  Keep in mind also that insurance for older vehicles is generally lower, sometimes significantly lower, than the newer car you still have to make payments on.

Here's an example of how repairing that old car will get you on track to saving big money.

  • Insurance: $80 per month (example)
  • new car payments: $380 per month, 5 year term (this figure is slightly below the NADA estimates)
    • You are paying $460 per month (insurance + car payments)
  • assume 2 years on your lease: $9120 of lease payments remaining, $1920 for two years insurance payments.
    • $11,040 remaining (payments + insurance for 2 years)
  • repairs for the old car you already have: $2000 (varies depending on the car)
  • It will only be 4 months and 1 week until your current car payments and insurance are equal to $2000.

If you keep doing what you're doing (no changes), you are already paying as much as it would cost to repair the old car every 4 months!  Even if you buy an old car for $2000 dollars and then put in $2000 more dollars to repair it you will *still* pay out less than what remains on a 2 year lease and have lowered insurance premiums to boot.

Here's more on why you should avoid car payments

Even if your older car or truck gets bad gas mileage compared to your new car, the difference is probably so small it doesn't matter.  If getting rid of your new car would save you $3000 in payments - well, just figure how much gas you can buy for that.

Remember to factor in how much extra you are paying for the new car (monthly payments and higher insurance)