Blog

The Average Car Payment Has Surpassed $700. What Now?

Author

A set of wheels is a necessity for most consumers in the U.S. But this necessity increasingly comes with a luxury price tag.

According to the Moody’s Analytics Vehicle Affordability Index, auto loan payments for new vehicles reached an average of $712 a month in May 2022. This hefty sum is the result of higher interest rates AND sticker prices. According to Kelly Blue Book, the average new car purchase price in May was $47,148.

With no signs of a return to previous levels, consumers are looking for ways to cut back on this major budget-breaker. While we can’t control vehicle costs and inflation, there are a few things any prospective buyer can do to set themselves up for more affordable outcomes. 

Here are the best ways to get a lower monthly car payment:

1. Save money by purchasing a used car:

While used cars have also climbed in sales prices, the average monthly payment for a used car was $538 in May 2022. 

2. Shop around for an auto loan:

Get pre-approved for your auto loan: Showing up to the dealership with pre-approved loan terms (rather than relying on dealership financing) gives you more control over your car shopping process.

3. Reduce interest rates by improving your credit score:

A higher credit score shows lenders that you’re more likely to repay your loan on time, and they’ll offer lower interest rates to less risky borrowers. Increasing your credit score from the “fair” range (around 650) to the “excellent” range (over 750) can reduce your monthly payment by over $100/month.

How can you improve your credit score fast to buy a car?

Luckily, raising your credit score isn’t as hard as it used to be. Now you can build credit without a secured card and other less-than-reliable methods, with StellarFi. StellarFi allows you to build credit using the bills you already pay, with NO interest, NO deposits, and NO surprise fees. 

Here’s how it works:

  1. Set up your membership
  2. Link your bank account and your bills
  3. Each bill you pay through StellarFi is reported to all three major credit bureaus
  4. StellarFI optimizes your payment history, your credit utilization, and other factors that contribute to your credit score

StellarFi works quickly, so you can get in the driver’s seat of your new ride as soon as possible—with an interest rate that doesn’t break the bank.

Check it out!

StellarFinance, Inc. and its affiliates do not provide financial, tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own financial, tax, legal, and accounting advisors before engaging in any transaction.