Car Loan Financing
The current US economy is full of challenges for the everyday working family. There are pay cuts, rising consumer prices and a depressed housing market that has taken personal savings to the lowest levels in years. People who purchased homes in the height of the housing market are now stuck with inflated payments, especially if their mortgages contained adjustable rates. All these dynamics are creating pressure on their finances and calling for a change. So how do you bring your head back above water? After your mortgage payment, a car payment is the next largest consumer expense. Here are a few tips that will help you lower that payment in negotiations with your car loan financing company:
• Ask them for an extension to your loan to reduce your payments. This is a known reality in the vehicle financing arena and one concession that auto finance companies are doing on a daily basis. If you are the type of customer that has consistently, with a few exceptions, made your payments on time, there is no reason why they would not approve this type of extension. An extension will increase the number of payments that need to be made but also lower the payment amount. In today’s market, it’s not easy to source reliable customers who make their payments on time, so you are more valuable to them than you think. They know your payment history and benefit from the extension as they collect more money from you in interest payments if you have a longer term.
• Request a payment break. What this means is that you request a short period – 2 or 3 months – where you receive approval from them to not have to make any payments and have those payments you missed added to the ended of the contract. This way you have the opportunity to get through a tough period and they have the opportunity to earn more money because the outstanding balance is higher than what was on the original loan schedule. You will want to ensure that they don’t add excessive fees or costs for this extension that mitigate the benefit.
• If you are a very good customer, ask your finance company to lower your rate in light of your excellent payment history. Again, this comes back to the fact that a lower margin good customer is better than no customer at all. The costs of losing you far outweigh the costs of cutting a valuable customer an interest break.
Use the current economic environment to your advantage. There are many car loan companies in the market that are interested in keeping good accounts rather than losing them to expensive collection procedures or competitors. These times bring challenges but not without opportunities too.