How to Manage Your Used Car Payments

Whether buying or leasing a pre-owned vehicle, find your comfort zone with your car payment!


In previous posts, we have talked plenty about how to make the most out of your car buying experience. We have touched on how to manage emotional buying decisions, how to choose the ideal time to buy a car, and what to expect of your salesperson. It’s time to talk about the finances. When you decide that you want to invest in a quality pre-owned vehicle, you have a number of follow-up decisions to make: budgeting, financing options, and payments. Not sure how monthly car payments might affect your budget? Need help deciding between buying versus leasing? Let us help you figure that out. Here are a few tips on how to manage your car payments wisely.

1.      Set your budget

Used cars come in many shapes and sizes. You might even have some idea of what’s most important to you in a vehicle. But before you start shopping for a used car, you need to review your household budget. Figure out how much you are comfortably able to pay for a car every month, including the cost of gas, insurance and general maintenance. Once you work out your numbers, you will be able to turn your car shopping into a stress-free experience. Next, you can start looking at financing options.

2.      Understand your financing options

Now that you know what budget to work with, let’s talk about savings. However small or large your down payment is, it’s important to stick to a plan that will help you save. Start saving in advance and remember that monthly car payments usually don’t vary, which means, you can know ahead of time how much you need to budget each month. That’s much easier than taking that same amount out of each check. Plus, avoiding unexpected expense is nearly impossible. Your best bet is to divide your monthly car payment by four and put away that amount each week. This will leave you well prepared by the monthly due date.

How much do you need to save and what will the monthly car payments come up to? Our car loan calculator can help you figure all that out. Plug in your down payment estimate and then use various financing terms and interest rates to see what you’d be committing to. You could also estimate the value of your trade-in and factor that into your calculations.

Now, let’s take a closer look at the top three financing options for buying a used car: bank loan, dealer financing and leasing.

Bank loan

If you have a good record with your own bank, this option is for you. Try to negotiate a lower interest rate on your car loan from your own financial institution. Also, you might want to compare a loan to a line of credit to see which option would cost less over the term of the payments.

Dealer financing

If you’re looking for ease and convenience, then financing through your dealership is your best option. Car dealers who offer financing can save you the hassle of coordinating payments between the bank and the dealership; you pay the dealer directly and the dealer arranges the loan with a lender.


Surprised? Yes, leasing is an option for pre-owned vehicles, at least with some dealerships. Think of leasing as renting a car, except that the term is usually 3 to 5 years. At the end of the term, you simply return the car to the dealer and hand in the keys. You would have the option to buy the car if you choose to but only at the end of the term of course.

If you are able to make monthly car payments on a regular basis and can’t be bothered with selling or trading in cars, then the lease option would have you driving a different car every few years.

3.      Pay more when you can

You saved your down payment, shopped for your car and figured out a financing option. You planned and prepared well. If you’ve decided to buy instead of lease, consider paying more than the minimum monthly requirement when you have extra cash on hand. This could go a long way in helping you pay off your car faster. If you’re choosing in-house financing with your dealer where you pay the dealership directly each month, ask if the company accepts additional payments whenever you’re able to make them.

Reviewing your finances before you browse used cars can help you understand how a car payment might affect your budget. Once you feel confident about how to pay for a vehicle, your car shopping can be a fun and exciting adventure.

At Global Auto Sales, we are proud to offer end-to-end service, including financing with the lowest possible interest rate. And for your convenience, we accept online requests for in-house loans.


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