4 Actionable Ways To Avoid Having a $1,000 Per Month Car Payment
Written by
John Schmoll
Edited by
Zuri Anderson
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Purchasing a car is an increasingly painful transaction. Already the second-largest purchase for most Americans, more are spending at least $1,000 on monthly payments. According to Edmunds, slightly over 20% of Americans are committing to monthly payments of $1,000 or more as of Q4 2025.
A similar number is taking out loans of at least 84 months, per Edmunds. Rising prices make it challenging to find an affordable automobile. Although difficult, it’s not impossible to merely accept such a costly monthly payment.
Here are four ways to avoid having such a burdensome monthly car payment.
1. Work Dealers Against Each Other
Dealerships generally need to sell a car more than you need to purchase one. They must move cars for new ones coming in, and dealers know there are often plenty of opportunities for you to find a new automobile.
Using this to your advantage can help save money on the purchase. Once you identify the new car you want, attempt to get pricing from each dealer in your area. You may be able to find this information in their inventory, or you can email them to see if they will provide pricing via email. Don’t overlook online sites like Carvana either to secure pricing data.
Getting this information before walking into a dealer with the intent to purchase puts you in a position of strength, according to Consumer Reports. The more information you have, the more you can negotiate a price that works for you.
2. Bolster Your Credit
Taking out a loan is necessary for many would-be car buyers. Your credit score directly impacts the rate you can secure on financing, and improving it can save significant money over the life of the loan. Begin by reviewing your credit report for errors, which Americans can get for free on AnnualCreditReport.com.
Don’t stop there, though. Pay down credit card debt to get it under 30% of your available amount. Pay your bills on time and avoid applying for new credit for at least six months before applying for the auto loan. These actions will boost your credit score, making you more attractive to lenders.
Don’t overlook getting pre-approval for a loan before going into a dealership. The dealer makes money on financing, so walking in with an approved loan puts you in a position of power.
3. Handle the Trade-in Differently
Dealers typically like to handle all facets of negotiation, such as a trade-in or financing, together, according to Consumer Reports. It’s best for consumers to do everything separately.
If you have a car to trade-in, this could result in thousands of dollars lost. Rather than using the car you want to trade in as a bargaining chip, consider selling it privately to get more cash for it. Private sales can net you 10% to 30% more for your trade-in versus trading it in at a dealership, according to UsedCars.com. For Americans looking to trade in, this immediately puts more cash in your hands to grow your down payment.
4. Skip the Extras
Buying a fully loaded new car is fun, but it’s a costly luxury. Instead of purchasing a top-of-the-line car, look for ways to materially reduce the overall cost of the car. If you want a new car, avoiding dealer extras is a good way to lower the cost.
Extended service plans, various protections, sunroofs and more can easily add thousands to the final cost when totaled up, according to AAA. Selecting a trim down can also reduce costs by several thousand dollars. Together, these actions can help buyers buy less car without it being too painful.
Affordability will remain an issue for American car buyers, according to the Wall Street Journal. Purposeful steps combined with a keen eye can help you get the car you need without overspending too much in the current economic climate.
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