If it's important that you reduce the monthly payment, or the down payment, there are a variety of ways to make that happen. For a lot of reasons, which will probably be obvious, most people don't want to hear about them. But, here they are.

Bad Ways

Bad ways to reduce your monthly payment, all of which will end up costing you more money in the end, are:

Lease instead of purchase. The attraction of a lease is that it enables you to drive around in a more expensive vehicle than your personal financial situation would, and should, rightfully allow you to purchase. You think it's great because you're in a more cool car than you would have otherwise. Some folks, in certain situations and with good self-control, can take advantage of a lease. That description does not include a lot of people. Quite often, leases are used by obsessive-compulsive buyers who just have to have that new car, right now, but don't want to, or can't, actually pay for it. Quite often, at the end of the lease you have nothing except, in all likelihood, a penalty for all the extra miles you drove.

Lease, but at a lower annual mileage limit. When you lease you are renting it based upon use. You can sign up for 10,000, 12,000, 15,000 or even more miles as your annual limit, but the higher the number, the more it increases your monthly payment. To reduce the monthly payments, many buyers choose lower annual mileage limits, figuring they just won't drive as much. Sure, you're just not going to drive as much. Did the distance to your job all of a sudden get shorter? If you didn't sign up for a sufficient limit in the beginning, the cost for the extra miles will be added at the end, and that penalty can get rolled over into the next new car. You will be driving a new car, but still paying for the miles on the old one.

Purchase, but stretch the payments over a longer period. Instead of 48 months, run the payments out to 60 months or maybe 72, 84 or even 96. You won't have any equity in the thing until you're at least about two-thirds through the payment schedule, and how much are you going to like it then? So you'll trade it in before it's paid for, and take what you're upside-down (the negative difference between what the car is worth and what you owe), and roll that into the next one. It is not unusual for people to be upside-down by more than $10,000, and just on one car. Huge numbers of people are paying not only for what they're driving now, but the two or three or even four or more before that.

Good Ways

Good ways to reduce your monthly payment, which will save you money but a lot of you won't like them, are:

Save your money up front and pay cash. Except, you don't have the money to do that, and you really, really want that new car. Really.

Make a larger down payment. The monthly payments will go down but, we know; you don't have the money to do that and you really, really want that new car. Really.

Buy something less expensive. But you want the high-end model, you like those chrome rims and you just can't imagine not having the big stereo.

Buy a good used car. You want the best deal? Pick out a certified used car, sometimes known as a CPO, for Certified Pre-Owned. Most manufacturers offer them. It will be a really clean used car, typically carries a manufacturer's warranty that's often longer than the original, can be paid for with factory financing, and somebody else has already eaten up the worst part of the depreciation. CPOs are the best deals on the dealer's lot. But, we know; you really, really want a new car. Really, really.

Don't buy anything at all. In many cases, that current car or truck still has lots of good miles and service in it. Maybe it needs tires and little fixing up, but it's a lot less expensive than a new car payment.

But, we know.

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