How To Get a Lower Car Payment and Save Today

Key takeaways:

Monthly car payments hit record highs in 2026, making it even more important to get the best deal before and after you buy.
Some of the most effective ways to lower your car payment include renegotiating your terms, putting more money down up front, or refinancing your auto loan.
Refinancing replaces your auto loan with a new loan with lower interest rates, lower monthly payments, or a longer repayment period.

For many people, a car payment can be one of their most expensive monthly bills. And if you’re like most people, you’d love to lower your car payment.

In this guide, we’ll discuss 8 ways you can potentially lower your monthly car payments. Read on for everything you need to know about how to get a cheaper car payment before and after you purchase a vehicle.

How to get a cheaper car payment before you buy

Shopping for a new or used car can come with serious sticker shock. Between supply chain problems and rising inflation rates, car prices and monthly payments have reached record highs. The average car payment in 2026 is nearly $767.

Fortunately, you can still take a few steps to ensure you get the best rate and lowest monthly payment possible. Consider the following tips to lock in a lower monthly car payment before you buy a car.

1. Shop around for the best rates

As a rule of thumb, take some time to shop around for the best deal before financing a car. It may add time to the process. But you could save by finding an auto loan with better terms, such as a longer repayment period or lower annual percentage rate (APR).

Talk with your auto retailer to see if they offer any special financing for new or repeat customers. You may also check with your bank, local credit unions, or online lending platforms to get a better understanding of your options.

2. Put more money down up front

When you make a down payment, you pay for a portion of your vehicle up front, then finance the remaining amount. Typically, you should try to put down about 20% of your vehicle’s total cost. However, making a larger down payment can reduce your monthly installments and save you money in the long run.

For instance, consider the following scenario. You plan to buy a $25,000 car. You prequalify for a 5-year loan with a 4.5% APR. If you decide not to make a down payment, your monthly loan payments will be $466. You’ll also pay an additional $2,965 in interest over the life of your loan.

If you put down $6,000 up front and finance the rest, your monthly expenses will change substantially. Your monthly payment will decrease to $354, while your total interest costs will drop to about $2,250.

Keep in mind that these are only rough estimates and don’t include taxes or fees, such as loan origination fees or processing charges. Still, using a loan calculator to get a general idea of your expenses can help you decide how much you want to put down and how much you want to finance.

3. Choose a longer-term loan

If saving up for a larger down payment isn’t an option, you may decide to take out a loan with a longer term.

By choosing a longer-term loan, you’ll stretch your payments out and lower the cost of each installment. For example, consider the scenario above once more. You buy a $25,000 car and put no money down, which means you’ll need a $25,000 loan.

The monthly payment on a 5-year loan with a 4.5% APR would be about $466. However, if you choose a 7-year loan with the same APR, your payments will automatically drop to $348, saving you more than $100 each month.

It’s important to remember longer loans may only help you save in the short term. When you take out a loan, the interest on the loan works like a rental payment. The longer the loan, the more “rent” you pay.

Your total interest charges will vary based on your interest rate, too. If you have excellent credit, you may qualify for a rate as low as 2.47%. If your credit falls below the 660 mark, you could pay 6% or more on a new car and 9% or more for a used car.

4. Consider leasing a car

Trying to decide between leasing and buying? The potential monthly savings could help you make your decision.

Generally, the payments on a lease are substantially lower than the payments on an auto loan. That’s because you’re only paying for the vehicle’s depreciation over the life of your lease, instead of its total cost. In many cases, your lease will cover maintenance and repairs, too.

Still, leasing comes with a few downsides. Your monthly payments won’t increase your equity in the vehicle unless you decide to buy out your lease at the end of the term. You may also face steep mileage and wear-and-tear fees.

How to lower your car payment after purchase

If you already bought your car, high monthly payments or an upside-down car loan can leave you feeling stuck. But we’ve got good news. You may still be able to lower your monthly car payments using the following tactics:

1. Renegotiate your loan terms

Your loan provider is the first person you should talk to if you want a lower car payment. This is especially true if you’re at risk of falling behind on your auto loan.

If you default on your loan, your loan provider will have to spend time and money repossessing your car, taking it to auction, or transferring your debt to a collection agency. In many cases, it’s easier for them to work with you to adjust your loan terms rather than letting you default on your loan.

2. Refinance your auto loan

You may also consider refinancing your auto loan to save money. When you refinance your car loan, you replace your current loan with a new one. Ideally, your new loan will come with better terms, such as lower interest rates, lower monthly payments, or a repayment period that works for your needs.

Generally speaking, you can refinance your car loan as long as you’ve owned the car for at least six months and your name is on the title. That said, refinancing makes more sense in certain scenarios.

For instance, if you got stuck with an upside-down auto loan, refinancing your loan can help you get ahead of your payments and start building equity in your car.

Refinancing may also be a good idea if your financial circumstances have changed for the worse. It may allow you to get a loan with a longer repayment period. This could reduce your monthly payments and help you save more every month.

Lastly, you may decide to refinance your car loan if your financial circumstances have improved since you took out your original car loan. When you apply to refinance your loan, your lender will review the same factors your original loan provider considered, like your credit score, repayment history, and debt-to-income ratio. If you got a raise, paid off another loan, or improved your credit score, you may be able to get a better deal.

Refinancing may require extra time and effort, especially when it comes to submitting your personal and financial information and shopping around for lenders. Still, it’s one of the most effective ways to reduce your loan payments without spending more on interest.

3. Make extra payments

Depending on your financial circumstances, you could get ahead of your loan with a few extra payments. Doing so may help reduce your future payments—or allow you to skip payments entirely.

Many loan providers allow you to make extra payments on your loan. However, they often direct the money toward your interest instead of the principal. If that’s the case, you may be able to request extra payments to go toward your loan balance. You’ll reduce the amount you owe and provide a pad if you run into a more difficult financial season in the future.

4. Trade in your car

Is your car worth more than the amount you owe on your auto loan? If so, you may consider trading it in.

Trading your car in allows you to claim your positive equity and put it to work. You can use your profit for a down payment on another car, which will reduce the amount you need to finance and lower your monthly payment. Choosing a less expensive model can help reduce your payments even more.

Wondering how to get lower car payments? Upstart may be able to help

There’s no doubt about it: car payments are expensive. They may get even costlier, too, as inflation rates and demand increase. That’s why it’s so important to learn more about your options and take steps to get ahead of your car loan sooner rather than later.

While refinancing can help some borrowers reduce their car payment, it isn’t the only way to improve monthly cash flow. A personal loan could also help consolidate higher-interest debts into a single monthly payment, potentially freeing up room in your budget and making it easier to manage car payments. Learn more about your loan options through Upstart and check your personal loan rate online in minutes.

Upstart Network, Inc. (NMLS #936133) is not a lender. All loans on its marketplace are made by regulated financial institutions.

All mortgage lending is conducted by Upstart Mortgage, LLC dba Upstart Home Lending. (NMLS #2443873). Equal Housing Opportunity.

Checking your rate won’t affect your credit score: When you check your rate, we check your credit report. This initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, we do another (hard) credit inquiry that will impact your credit score. If you take out a loan, repayment information may be reported to the credit bureaus.
Upstart’s model considers education: Neither Upstart nor its lending partners have a minimum educational attainment requirement in order to be eligible for a loan.
41% more approvals and 33% lower rates than a traditional model: As of publication in April 2026, and based on a comparison between the Upstart model and a hypothetical traditional model using Upstart data from Jan – Dec 2025. For more information on the methodology behind this study, please see Upstart’s Annual Access to Credit results here.
Unsecured Loans: While most loans through Upstart are unsecured, certain lenders may place a lien on other accounts you hold with the same institution. There may be an option to secure your personal loan through Upstart with your vehicle, which will require a lien to be placed on the vehicle. It is important to review your promissory note for these details before accepting your loan.
Loan amounts from $1,000 -$75,000: Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($1,500), MA ($7,000). Maximum loan amounts may vary by state.
Closing and funding timeline: In April 2026, 10% of funded HELOCs achieved a closing timeline of 2 days or less and a funding timeline of 7 days or less. This timeline assumes consumers close with our remote online notary, provide supporting documentation promptly, and ensure the information provided is accurate and consistent with our verification process. Delays, discrepancies, and other unforeseen factors may impact the closing timeline. MBA’s 2025 Home Lending Study reports an average industry closing time of 37 days.
APRs from 6.2% – 35.99%, with 3 or 5 year terms: The full range of available rates varies by state. The lowest rates are only available to the most qualified applicants. A representative example of payment terms for an unsecured Personal Loan is as follows: a borrower receives a loan of $10,000 for a term of 60 months, with an interest rate of 17.50% and a 7.25% origination fee of $725, for an APR of 21.23%. In this example, the borrower will receive $9275 and will make 60 monthly payments of $252. APR is calculated based on 5-year rates offered in March 2026. There is no downpayment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
Instant deposits: To receive instant funding, your bank account must support instant transfers. If your account does not support instant transfers, funds will be available to you depending on your bank’s transaction processing time and policies.
Always On Commitment: We are committed to maintaining your credit limit as long as you continue to meet program eligibility and account requirements. To ensure the safety and security of all our members, we reserve the right to adjust or close lines in specific circumstances, including account default or late payments, suspected fraud, violation of our terms of service (including abusive behavior), or when necessitated by legal or regulatory requirements.
Cash Line draws: You may request a draw at any time. Only one draw may be outstanding at a time; after it is fully repaid, you may request another.
HELOC APRs as low as 6.52%: Terms shown here are subject to change without notice. APRs for initial advances range from 6.52% to 18.00% based on rates offered as of April 2026. The lowest rate is only available to consumers willing to become a member of a credit union and to those who meet a minimum FICO score of 780, CLTV under 70%, and DTI under 45%. Your actual rate will depend on many factors such as your credit history, combined loan-to-value ratio (CLTV), line amount, loan term, lien position, and property state. Origination fee to open an account is between 0% and 4.99% of the approved credit limit. The Annual Percentage Rate (“APR”) is variable and based on the Prime Rate as published in the Wall Street Journal “Money Rates” table plus or minus a margin. Your APR will never be less than 3.99% or greater than 18.00%. Property insurance is required.
No annual fee, prepayment penalty, or fees to redraw: Terms shown here are subject to change without notice. Origination fee to open an account is between 0% and 4.99% of the approved credit limit. The Annual Percentage Rate (“APR”) is variable and based on the Prime Rate as published in the Wall Street Journal “Money Rates” table plus or minus a margin. Your APR will never be less than 3.99% or greater than 18.00%. Property insurance is required.
2,500+ Variables:As of 3/31/2026. “Variables,” often also referred to as “features,” refers to raw variables and combined variables considered in our AI models. A “raw” variable is a non-combined, conceptually distinct unit of data, such as “applicant-reported savings.” A “combined” variable is data that has been transformed, combined, or otherwise engineered from a raw variable or set of raw variables, such as “applicant-reported savings” divided by “loan amount.
Fully automated loans: In Q2 2026. Percentage of Loans Fully Automated, which is defined as the total number of loans in a given period originated end-to-end (from initial rate request to final funding for personal loans and small dollar loans, and from initial rate request to signing of the loan agreement for auto loans) with no human involvement required by the Company divided by the Transaction Volume, Number of Loans in the same period.

8 Ways To Get a Lower Car Payment