7 Ways to Lower Your Car Expenses

Laveta Brigham

By Philip Reed From monthly payments to repairs to insurance, a car can be one of your biggest expenses. But that also makes it one of your biggest opportunities to put money back in your pocket. If you’re trying to make ends meet or want to simply save some money […]

By Philip Reed

From monthly payments to repairs to insurance, a car can be one of your biggest expenses. But that also makes it one of your biggest opportunities to put money back in your pocket.

If you’re trying to make ends meet or want to simply save some money in 2021, here are seven easy ways to reduce your car costs in the coming year.

1. Refinance Your Car Loan

If your credit score has gone up since you bought your car, or the dealership put you in a bad loan, you can easily find a new lender that can lower your interest rate and save you hundreds over the course of the loan.

For example, according to the most recent data from Experian  (EXPGY) , the average annual percentage rate for a used-car loan for a consumer whose credit scores fall in the subprime category (501 to 600) was 16.4%. For those in the next tier (601 to 660), the average APR was 10.13%.

On a 60-month car loan of $20,000, a borrower who refinanced from 16.4% to 10.13% would save $64 a month and more than $3,600 over the life of the loan.

Refinancing will also give you the chance to adjust your payment schedule. In an emergency, you can extend your loan term. Or, perhaps you can even pay the loan back sooner.

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