Can’t Afford Your Car Payments? Here Are 5 Things You Can Do Immediately

Kenny Sokan
October 11, 2019
Some of the links in this post are from our sponsors, and we might earn a commission if you click on one. We are letting you know because, as our grandmother taught us, an honest penny is better than a stolen dollar. Now, back to filling up your piggy banks.

A lot of us are living paycheck to paycheck and it’s a tough situation to be in. Even when you’ve managed to get your budget down to your core expenses — rent, food, car — it can be a struggle to make ends meet.

We know it can seem impossible to cut back on your spending, especially when you’ve already scaled it back, but we know a good place for you to start: your car. We hear this all the time from readers: “I can’t afford my car payments.” With that in mind, here are five immediate steps you can take to do something about it.

1. Cut Your Car Insurance Bill By Hundreds Of Dollars

We’ll let you in on a little secret car insurance companies don’t want you to know — you are paying too much for your policy. It’s important that every year or two you compare your car insurance rates to those from other insurance companies. Premiums can go up for several reasons, including a policyholder’s age, accident claims, traffic violations, moving to a different location, a drop in credit score, adding drivers to your policy and more. But there is also a lot of competition in this industry — and car insurance companies really want your business. You can end up saving a lot when you change your car insurance every year or two. Spend a little bit of time on this and you might never have to say “I can’t afford my car payments,” again.

If you’ve had the same insurance policy for years and are now in need of a cheaper one, you need to try Gabi. In just two minutes, Gabi could help you save up to $825 a year on your car insurance. They do this by letting you compare your current car insurance rate with rates from up to 20 other providers. All you have to do is link your current insurance provider by logging into your account or uploading a PDF of your policy. Seriously, take two minutes to see how much you could save and get a new policy instantly

This is one of the easiest changes a person can make to change how much they are spending on their car every month.

Find a cheaper policy with Gabi

2. Refinance Your Car Loan

Loans are a pain. Yes, they can help you get the things you need that you can’t afford to buy outright (like the car you drive in every day), but the interest they collect as you work to pay them off can be a real budget killer. We know: it’s infuriating.

If a car loan is the driving force behind how much you are spending on your car every month, you should consider refinancing it to reduce your monthly spending. I know, it sounds complicated, but refinancing a loan is a lot simpler than you’d think. All you’re doing is taking out a new lower-interest loan to replace one or more higher-interest loans. Doing this can trim down your monthly payments.

An awesome app that can help you compare personal loan rates from the top trusted lenders in seconds is Fiona.

All you have to do is fill out a simple form with a few questions about your financial situation and needs and the app will get back to you with offers you prequalify for based on the answers you gave. See an offer you like and apply for it directly through the app and you could be approved in seconds and get access to your funds right away.

Loan rates start at 4.99% and you can borrow anywhere between $1,000 and $100,000 with payments lasting between 24 and 84 months. The better your credit score, the better rates you’ll be able to get.

Fiona is completely free to use and the best part is that using it won’t affect your credit score in any way. Start breathing a sigh of relief and stop saying “I can’t afford my car payments.”

Refinance your car loan

3. Ask To See If There Are Discounts Available

On top of getting the absolute best insurance premium quote possible, it pays to ask your insurance company what premium discounts they offer. Car insurance companies have all sorts of discounts for policyholders that are based on driving history and habits, car safety features, a driver’s education, military or employment affiliation, customer loyalty and more. Do your research and ask what’s available. 

It can also pay to come in armed with information that you can get a cheaper policy from someone else.

Zebra is a fast and easy way to see what policies are available to you in your area and to see if you’re overpaying for your current one. You can compare car insurance rates instantly from over 100 providers nationwide. Just answer a few questions about yourself, your driving experience and the coverage you need (it takes less than two minutes) and within seconds you’ll see side-by-side quotes from insurance companies in real-time to help. 

Zebra says it saves users up to $54 a month on average, so if your current provider isn’t willing to budge on your premium, if Zebra finds you a cheaper policy, you could just switch providers.

See what you could save with Zebra

4. If You Just Need Some Free Cash To Tied You Over One Month Do This

Sometimes you just need some extra cash to hold you over until your next paycheck, especially when you have a car payment coming up that you can’t afford. Some people opt to take out payday loans to help them out when they’re in a tough spot, but they can end up costing you a fortune thanks to high-interest rates and crazy fees. There is a better way to get a hold of some cash now to make a car payment — Earnin, a cash advance app.

Earnin lets you cash out money from your paycheck ahead of your job’s payroll schedule. Share some basic details with Earnin including where you work, your work schedule and how you track it and where you bank and you’ll be able to access the money you’ve earned the same day you’ve earned it. Then, when you get paid by your employer, Earnin deducts the amount you cashed out.

You can withdraw up to $100 per pay period and eventually up to $500 after using the app for a while. You pay no fees or interest, but rather leave whatever “tip” you think Earnin deserves for this service in order to keep the work it does going.

Access your paycheck sooner

5. Think About Trading In Your Car

One of the easiest ways to afford your car is to trade it in for one that costs less to maintain or to find another cheaper mode of transportation. It’s something to think about if you’re struggling to make your car payments every month. Ask yourself this question: Can I afford this car? If not, you should probably trade it in for something you can afford.

Feature Image: Twenty20