Car payments topping $1,000? Here’s how to avoid getting stuck with one

(InvestigateTV) — For many Americans owning a car is essential – but it’s becoming more expensive.

A new survey by LendingTree shows the growing impact of high auto loan payments, with a significant number of people with four-figure monthly payments.

“A little less than one in ten Americans with an auto loan are paying at least $1,000 a month on that auto loan, and about 40% of the people who are doing that are doing it as a result of a loan that they took out,” said LendingTree’s Chief Consumer Finance Analyst Matt Schulz.

Schulz said Gen X is hit hardest by this trend, with more people in this generation having high payments than any other generation.

“As a Gen Xer I can relate to this,” he shared. “Gen X was the most likely to say that they had a $1,000 car payment and to a degree that makes sense because Gen X is pretty much in their prime earning years. So, they’d have a high enough income to actually qualify for a high dollar loan. They also tend to have higher credit scores than younger Americans do.”

LendingTree also found that high payments are most common in the South and West, while the Northeast and Midwest see the fewest one thousand plus dollar auto loans.

Schulz had several tips for those facing potential high car payments:

• Look up credit scores and rating before negotiations
• Have a clear monthly payment amount in mind
• Compare loan offers before stepping into a dealership
• If possible, plan to make a down payment

“With car prices as high as they are and interest rates as high as they are, even being able to shave a fraction of a point off of your interest rate on that auto loan could save you very, very real money,” he said.

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