It has been a few months since you walked off the lot of the local “Buy Here, Pay Here” dealership with your shiny new looking lemon-yellow car and the monthly payments are leaving a bitter taste in your mouth. You understand the rate on the loan was high because of issues with the credit card company that caused the dealer to at least pretend there was nothing they could do for you until you practically begged for the loan, but now your payments are up to date and you feel you could do better. How do you get out of a bad car payment? Is there a trade-in option for cars?
The first and most obvious way if you have the cash is to go down the dealership and start rolling off hundreds and get rid of the loan; but if you had the cash you wouldn’t need to have the loan in the first place. The second way would be to refinance the loan by getting a lower rate from a bank or credit union; the challenge with refinancing a loan with a bank is they may look down on past mistakes and reject your application. Another option you could try is to ask your dealer to lower your rate in light of the fact that you are making your payments on time and they haven’t had to go through the expense of hiring a tow-truck to take your car away. Getting a loan to reduce a car from family or friends is another way to lower your payment but there are pitfalls to this as well which we’ll talk about in a later post. You could try this move but there is a potentially better way.
If you have enough money to potentially make another down payment on a car and maybe your car is beginning to have more than just the taste of a lemon…or maybe it’s just time to upgrade your wheels is to take your car to a dealer and trade it in for something else with lower payments. You could then drive off the lot with a car where you like the way it runs and can handle the payments without that bitter taste in your mouth.