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Seven Ways to Save on Auto Payments

Buying a car or truck has always been a major expense for most people, but the current state of the auto market puts even more pitfalls in place. Before you drive off the lot with your new vehicle, you want to make sure you’re getting the best deal possible. Fortunately, there are things you can do to save on your auto payments and the total cost of your vehicle. 
Consider these seven ways to save money on a new ride or your current vehicle.

1. Improve Your Credit Score Before Applying for an Auto Loan

The best way to save on your auto payments is to ensure that your credit is in good shape before you apply for an auto loan. If you have excellent credit, you can expect to get the lowest interest rates, which can decrease the total amount you'll have to pay back and lower the size of your payments.
Visit once a year to check your credit reports from all three major credit bureaus for free.
You want to also check your credit score. An excellent credit score is at or above 800 while a very good credit score falls between 740 and 790. If your credit score falls below these ranges, you should take some steps, if possible, to improve your credit score before applying for an auto loan.

Some ways to build your credit score include:

  • Challenge wrong information on your credit reports.
  • Pay your bills on time.
  • Pay more than the minimum payment on your credit cards.
  • Keep your debt-to-income ratio under 30%.
  • Deal with delinquencies.
  • Monitor your credit.
  • Keep old accounts open

If you need more help improving your credit score, reach out to one of the financial professionals at La Capitol — we’re here to help you! 

2. Get a Co-Signer

If your credit score isn't great, you don't have credit, or you don't have enough time to work on improving your credit score, you might be able to get a better interest rate by getting a co-signer.

Remember that when you have a co-signer on your auto loan, they will be responsible for your loan if you fail to make payments so you don’t want to hurt their credit or damage your relationship.

3. Shop Around for the Best Interest Rates

Shop around for the best interest rates before buying a new vehicle. You can check online and get quotes from banks and other auto lenders.

You can take a look at today’s interest rates at any time in our Auto center

Being pre-approved can help you negotiate with the dealership and secure a better deal.

4. Avoid Using Dealership Financing

While many dealerships offer to finance, the loans they offer generally have higher interest rates than an auto loan you can get through your credit union. Avoid financing an auto loan through a dealership and instead secure financing before you arrive.

5. Consider Buying a Used Vehicle

If you want to cut down on the total amount you will have to pay for your vehicle over the life of your auto loan, consider buying a used vehicle instead of a new one. Cars lose value the second you drive off the lot.
Consider looking for used models from the last couple of years to get a better deal and avoid being upside-down in your auto loan. Prior lease vehicles can be great to purchase since the lessees have to keep up with regular maintenance schedules as a condition of their leases. Make sure to review the Carfax report on any vehicle you consider.

6. Consider Refinancing

If you are paying on an auto loan with a high-interest rate, you might consider refinancing it. For example, if your credit score has improved since you started your loan, refinancing can allow you to replace it with one at a lower interest rate.
When you refinance your auto loan with La Capitol, you can benefit from a cash incentive of up to $100* and free up money to use on other things by being able to skip payments for 90 days**

7. Make Extra Payments to Pay Off Faster

You can reduce the total interest you'll have to pay over the life of your auto loan by making extra payments towards the principal each month. In addition to your regular monthly payment, try to send a second payment toward the principal. This can quickly reduce your balance and the interest you'll ultimately have to pay.
If you’re unable to make extra payments every month, another great option is to put any extra money you receive — like bonuses, tax refunds or gifts — toward your balance.
Whether you are preparing to buy a car or want help with reducing your payments, La Capitol is here to help you save.  To learn more about saving on your auto payments, contact La Capitol today.


*Up to $100 incentive offer is valid for transferred vehicle loans currently with other financial institutions and does not apply to vehicles currently financed through La Capitol Federal Credit Union. Only balances of $8,000 or above qualify for a cash incentive under this offer: $50 for vehicle loans with a balance of $8,000 up to $11,999.99, $75 for vehicle loans with a balance of $12,000 up to $17,999.99 and $100 for loans with a balance of $18,000 or more. Offer valid on 2019 or newer year models.

**Loan products are available to qualified, creditworthy members. The actual rate for which you qualify will be based on your credit history, loan amount & the term of your loan. Eligible members may elect to defer payment for up to 90 days (some restrictions apply). Interest continues to accrue during deferment period. Offer is valid for transferred vehicle loans currently with other financial institutions and does not apply to vehicles currently financed through La Capitol Federal Credit Union.

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