3 Tips to Manage a $750 per Month Car Payment

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Taking on an expensive car payment? Read on for ways to make sure you don’t fall behind. 

If you’re buying a car and are looking at an auto loan payment of $750 a month, it doesn’t necessarily mean you’re purchasing a luxury vehicle. The average monthly payment for new vehicles hit a record high of $730 during the first quarter of 2023, according to Edmunds. So if you’re now on the hook for $750, it may just be that you had to buy a larger car, like a minivan or SUV, to accommodate a bigger family.

But no matter the reason for your $750 monthly car payment, the reality is that it’s a lot of money. And if you’re going from having no car payment to a payment of $750 a month, it could really constitute a shock to your finances. Here are a few steps you can take to cope with such a large car payment.

1. Start following a streamlined budget

Budgeting isn’t something everyone likes to do. And if you’re managing your bills just fine, you can easily argue that there isn’t a need for you to do it.

But any time you commit to a large recurring expense, whether it’s a car payment, a mortgage, or a personal loan, it’s important to adjust your spending accordingly. So take a look at your recent bank and credit card statements to see what your monthly spending looks like. And from there, identify expenses you can trim as needed to make room for your new $750 monthly car payment.

Of course, depending on your financial situation, you may not have to cut your spending at all. Let’s say you’ve been saving $800 a month for the past few years and have a solid emergency fund and retirement nest egg already. You may decide that for the time being, you’re just going to spend the additional $750 a month, and if you’re only able to save $50 a month moving forward, so be it.

That’s not necessarily a terrible choice to make once you’re set on emergency savings (though it’s always good to keep funding an IRA on an ongoing basis for retirement purposes). But even if you know you have the room in your budget to spend a lot on a car payment, you should still have a solid sense of what your expenses look like so you can make adjustments as needed.

2. Consider a side hustle to boost your income

Perhaps your regular paycheck simply can’t handle an additional $750 a month. If that’s the case, and you have no choice but to spend that much on a car payment, then look to the gig economy for a second job that can put extra cash in your pocket and help ensure you don’t fall behind on your auto loan.

The good news is that there are many side hustles you can do either from home or at your own pace. Think about your schedule as well as your skills to land on the ideal gig. If you’re great with animals, you can look at starting a pet-sitting business on the side to drum up extra cash.

And remember, if you get a nice salary increase at the start of the new year or in conjunction with a promotion, you could decide at that point to dump your side hustle if it’s taking up too much time. You may, however, need that second job as you’re adjusting to spending an extra $750 a month.

3. See if you can snag a discount on your auto insurance

Your monthly car payment may be non-negotiable based on the vehicle you’re buying. But you can try to compensate a little by seeing if you can shrink your auto insurance costs.

Some insurers, for example, will give you a discount if you don’t use your car for commuting. If that’s your intent, let your insurer know. You may also be eligible for a discount on your premiums if you take a defensive driving course.

And don’t forget, spending some time shopping around for rates could leave you paying less for auto insurance. It may just be that your car insurance company is on the expensive side, and there’s a more economical option if you look around.

A $750 monthly car payment is a tough expense to keep up with. But if you’re careful with budgeting and boost your income as needed, you might manage to swing those payments just fine. And if you’re able to reduce what you’re spending on auto insurance, even better.

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