How to Negotiate Lower Car Payments

Negotiate a lower car payment by refinancing your current loan or getting a new one to replace it. Your current lender may agree to a refinancing that adds more months to the length of the loan and possibly lowers the interest rate; this combination could significantly lower your payment. You could also choose a new loan from another lender who offers better terms.

Instructions

1

Order your credit report and score. Order your report from Annual Credit Report, a website created by the major credit bureaus to offer free credit reports under the terms of the Fair Credit Reporting Act. Visit the website to print your report. Order your credit score separately, for a fee, by following instructions on the credit report.

2

Evaluate your credit score. The interest rate on your new loan will be largely determined by your credit score. The City of Phoenix reports that credit scores of 720 or higher represent excellent credit and will qualify you for the best interest rates. Scores below 620 may make it impossible for you to qualify for an interest rate that is better than what you currently have, and at that level, you might be offered a loan with an even higher interest rate.

3

Contact your current lender to ask for a refinancing. Your established relationship with the lender could make the application process simple. Ask for the terms of the loan in writing if you are are approved. Then compare rates by applying for a new loan at your bank or credit union. Tell the loan officer that you are looking to pay off your old loan and reduce your monthly payment. Give the loan officer the current balance on your current loan along with information about the car, such as the make, model and mileage. Get the terms in writing if you are approved.

4

Choose one of the loans based on the best overall terms. Although lower monthly payments is the goal, you should pay more attention to the overall cost of the loan. Create a plan for raising your credit score if you were turned down for credit or you feel the loans were too costly. Apply again after your credit has improved.