Feeling Stuck in Your Car Loan? It may be time to shop around.

Getting a new car is always exciting, however, most of us buy for our current lifestyle, rather than thinking about the future. A lot can change in the three to five years you financed your car for. A new baby requires more space; a new job might require a lower payment. Life happens and things change, don’t let that get you down. You might feel stuck in your current car loan, but that’s not necessarily true.

Before you start looking for a new vehicle, be sure to communicate with your current lender, they may have options for you.

First and foremost, decide if you’re going to refinance your current vehicle, or trade in for a new one. Knowing your credit score, payoff amount, and the vehicle’s blue book value will help you make a realistic decision.

Your credit score is a big determining factor in the car trading/refinancing process. If your score is below average, consider keeping your vehicle a little longer to increase your credit score by paying on time every month. Be mindful that all auto loans are “simple interest loans,” meaning the loan accrues interest daily. Everyday after the due date the loan accrues an additional day of interest (even during the grace period) meaning more of your money is going to interest, instead of the principal balance.

In the event that your vehicle payoff amount is more than the value of your vehicle, be prepared to bring some money to the table for a down payment, unless your credit score is above average. If money is tight, try refinancing into a longer term to lower your monthly payments.

Try getting pre-approved for an auto loan before you hit the dealership. This puts you in a better negotiating position and usually gets you a better rate. I got pre-approved at FTWCCU and the entire car-buying process was a lot easier than my last one. If you’re unable to get approved beforehand, be sure to shop around before you sign on the dotted line.

If trading, or refinancing is not an option, try selling the vehicle yourself for the actual pay off amount. Don’t throw in the towel before trying all avenues, you do have options.