How to Keep Monthly Payments Down

While shopping for a new vehicle, it can be easy to lose sight of your budget, its ok to go a little higher than my budget – right?  It is important to keep your car payments reasonable.  As exciting and fulfilling buying a new car can be, the whole experience may turn into regret if you get in over your head and struggle to pay your monthly bill for your vehicle.  So, here are some tips to keep your car payments reasonable:

How many cylinders?

This is something you can save a lot of money with, both at sales time and down the road. The average new car four-cylinder engine produces as much power (around 120-150-hp, on average) as the typical V-6 did 10 or so years ago. And today's V-6 engines offer 200-plus horsepower -- output levels you used to have to buy a V-8 to enjoy. In other words, it's no longer necessary, in most cases, to step up to the larger, optional engine just to get adequate power/performance -- as it used to be in the past.  Before you get sold on a bigger engine you may not need, test drive the model equipped with the standard engine. It may be more than enough. And remember, smaller engines use less fuel, too. A 3-5 mpg difference can amount to hundreds, even thousands of dollars, in fuel savings over the life of the car.

Discounts form slight irregularities

In some western/southern states, hail damage is common -- and the bane of new car dealers. Yet as far as functionality, a few dings do not affect the vehicle.  Unlike something like flood damage, hail damage doesn't affect the operation (or warranty coverage) of the vehicle. It will run and drive and should last just as long as any other new car of its type. And often, the dings are tiny -- noticeably only to the perfectionist. But new car buyers (rightly) demand perfect sheet metal -- and so dealers are compelled to offer even very lightly hail-damaged new vehicles at discount prices.

Buy only what you need

It is important before you go to the lot, to decide exactly which options are priorities and which ones you could live without.  Once you are shopping for the car, stick to your list. If the exact car you want is not available among the cars the dealer has in stock, ask that it be ordered for you -- with just the equipment you want.  Adding a few options on a car might not seem like much, but in the end it will raise your monthly payments.  

Shop for a more unpopular vehicle

If image is not your top priority, than you may be happy with something that’s a slow seller – meaning the price will be lower than the most popular cars.  For example, full-size SUVs and pick-ups are languishing on dealership lots because of a wave of a trend of high fuel efficiency cars.  If you can live with 15 mpg and you could honestly use the size of an SUV, you may save money in the long run, even thought you are paying more at the pump.