--- title: 5 Tips to Lower Your Car Payment as Average Costs Reach a Record High description: Edmunds reports that the average car payment just reached a record high. Here are some ways to help you save on a new vehicle. authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter at Money who frequently writes about news and trends related to car buying, auto insurance and gas prices. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 600 covers: - Personal Finance - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Professional Services - Retirement - Shopping - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Personal Finance - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2024-07-02T19:09:07.000Z' modified: '2024-07-02T19:09:07.000Z' section: Personal Finance tags: - News word_count: 614 canonical: https://money.com/car-payment-record-high-save-money/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Photo collage of a car driving up a stack of hundred dollar bills](https://img.money.com/2024/07/News-Car-Payments-Record-High.jpg) New car buyers’ budgets are being pushed to the limit by rising [auto loan rates](https://money.com/best-auto-loan-rates/) and high vehicle prices. The average monthly payment for a new car reached a record high in the second quarter (April to June), according to a [new report from Edmunds](https://www.edmunds.com/industry/press/new-vehicle-buyers-stretched-to-financial-limits-in-q2-2024-according-to-edmunds-experts.html). Even though car prices have [declined in the past year](https://money.com/new-car-deals-discounts-end-2024/), the average monthly car payment increased to $740, up from $733 in the second quarter of 2023. Part of the increase is attributable to auto loan rates, which jumped to an average of 7.3%. The average was 7.1% a year ago, and it’s been been above 7% for six quarters in a row now. ## New or used, your car is an investment. Make sure it's protected! ### Get the coverage you need without breaking the bank. Click your state to get a free quote today. [View Rates](https://money.com/pr/gd49efb4d648?ap_referrer=%2Fcar-payment-record-high-save-money%2F) In this tough market, buyers are making smaller down payments, which also means higher monthly payments. The average amount buyers put down decreased to $6,579 in the second quarter. That was the lowest level since 2022 and a drop from $6,823 a year ago. There is some good news for shoppers as the supply of new cars has gotten much better in the past year, leading to more discounts. But vehicle affordability remains a challenge for just about anyone financing their purchase. "In theory, improved inventory and growing incentives should paint a more consumer-friendly picture of the market, but the reality is most Americans can't buy their cars with cash, and increased borrowing costs continue to be a major roadblock when buying a new vehicle,” Jessica Caldwell, head of insights at Edmunds, said in the report. ## Strategies to lower your car payments Car shoppers financing a new car should thoroughly research their options and remember to stick to a budget that they can afford. Here are some strategies to get a lower monthly payment for your next new car: - **Make a bigger down payment:** Car buyers are committing to higher monthly payments as the average down payment has decreased. But putting too little down can be a mistake: By saving more money for a bigger down payment, your monthly responsibility will be more manageable. - **Find the best financing option and incentives:** New car buyers can compare financing options from different lenders like [banks and credit unions](https://money.com/best-banks/), and cross those with the options that dealerships offer. In some cases, car buyers with good credit can find 0% or sub-2% loan rates through subsidized dealership financing promotions. According to [RealCarTips.com](https://www.realcartips.com/news/1051-best-finance-deals.shtml), financing offers are gradually improving and there are more than two dozen 0% APR promotions running in July. (Some of these deals are only available for shorter loans, which means the monthly payments may not be particularly affordable.) - **Negotiate:** As the inventory of new cars improves, shoppers have more leverage to negotiate at the dealership. The extra time it takes to haggle with several different dealers could save you hundreds **or even thousands** of dollars **over the life of a multi-year loan**. You can also explore special discounts and cash back offers that may be available in your area. - **Choose the right car:** Despite high average car prices, there are still plenty of options under $30,000, several of which made [Money’s Best Cars of 2024 list](https://money.com/best-cars/). Shopping for a more basic or less popular vehicle could be the right move for your wallet. - **Consider your loan term:** Edmunds reports that buyers are opting for longer loan terms to reduce their monthly payments. About 70% of loans in the second quarter had terms over 60 months. Keep in mind, however, that you’ll pay more in interest over the course of the loan with a longer term. ## One of the best ways to pay less for Car Insurance is by comparing rates ### Click below to begin finding your rate today. [View Rates](https://money.com/pr/i86244fe9d5c?ap_referrer=%2Fcar-payment-record-high-save-money%2F) ![](https://s3.consumersadvocate.org/prd/image/image/29780/medium_e439fd1c-3ee2-41b2-bccf-5dfe3c4d8add.png) Protect your vehicle with affordable Car Insurance. 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