With financial headwinds like rising gas prices, a slowly-recovering economy and continued job scarcity, reducing costs in every corner of our financial lives has become a necessity. Unfortunately, our cars aren't concerned with our economic troubles; when they break down for the last time and we are forced to buy a new one, finding the best deal on financing becomes a necessity. (Driving is often the most convenient way to get around, but it'll cost you. See The True Cost Of Owning A Car.)

TUTORIAL: Introduction To Insurance

1. Tighten Up Your Credit
The terms of your loan are based on your credit score. If you have perfect credit, you receive the lowest possible interest rate. If you don't, you have to pay more because of your questionable repayment history. If you have problems with your credit and you don't need to purchase a car right now, consider waiting until your score increases. Just a small increase in your interest rate can save you a lot of money over the life of your loan. (Learn more in Can You Hit A Perfect Credit Score?)

2. Don't Borrow Too Little
If you only need a few thousand dollars, don't apply for an auto loan. Instead, save your money (if your car purchase can be put off). Small loans are paid off much more quickly than larger loans. Since the interest on the loan is how banks make money, they don't want your loan paid off quickly. Because of this, smaller loans often have much higher interest rates than loans of higher amounts. This allows the bank to make a more acceptable amount of money off of you. Of course, some car purchases are emergencies, and the only option may be the fast one. Set your loan limit at $5,000; anything below that amount should come from your savings account.

3. Refinance
Anybody who owns a home knows that mortgage rates have dropped significantly and because of that, refinancing their home makes a lot of sense. What many consumers don't know is that they can also refinance their car. Not only does it lower the monthly payment, it reduces the amount of interest you're paying which allows you to pay off our car sooner. Cars depreciate rapidly, making it imperative that you pay off your loan quickly.

How much money does it save? Let's assume you received a 60 month loan for $16,500 at a 21% interest rate because you had less than optimum credit. This loan would cost you $446 each month and you would pay approximately $10,300 in interest over the life of the loan. If you were to refinance and get a 7% interest rate, that payment would drop to $330 per month and you would only pay just over $3,300 in interest. What could you do with an extra $116 per month? Hint: add it to your existing car payment to get it paid off faster. (If car costs are dragging you down, find out how to free yourself of some of the extra weight. Check out 12 Car Insurance Cost-Cutters.)

4. Don't Stop at the Dealership
Just as your car dealer is a middle man when selling you a car, they are also a middle man when they want to set you up with a loan or a lease. Middle men always get paid for their trouble, and the person paying is probably you. Of course, you should get a financing quote from the dealer but if you stop there, you may very well end up paying too much for your loan. You probably did some shopping around for your car. Do the same for your loan.

SLIDESHOW: Top 5 Money-Saving Tips For Your Car

5. Lease it
Leasing a car is generally considered to be a bad idea, largely because you're paying a monthly payment and in the end, you will not own the car. Is leasing really as bad as people say? If you're somebody who wants a new car every few years and don't want to pay the repair costs that come with owning a car for an extended period of time, leasing may be right for you. Not only is the payment lower but in most states you only pay sales tax on your monthly payment instead of the total value of the car. Since a lease is designed to charge you for your use of the car instead of the purchase of it, you also don't incur the full cost of depreciation on the vehicle.

Leasing is not right for anybody who wants to own the car once all payments are made, but if you would rather not own a car, leasing may be a good choice for you.

6. Buy a Cheaper Car
It seems like an obvious and not so profound piece of advice, doesn't it? Sadly, it isn't as obvious as most would think. The facts are clear in that America has an awful habit of purchasing what they can't afford. They have an overreliance on credit and that could be financial disaster if a life-changing event happened. What's worse, our country's belief when it comes to financial matters is that it's ok to be drowning in debt for most if not all of our adult lives.

Do you have to purchase a new car or could a pre-owned model from a few years ago meet your practical needs for a car? Do you really need a luxury car and have you really "earned the right" to purchase an expensive car that will put you deeper in debt? It may seem like obvious advice, but it's worth considering seriously. (Accident, theft, vandalism - make sure your coverage will protect you when you need it most. See Top Tips For Cheaper, Better Car Insurance.)

The Bottom Line
There are numerous ways to save money on your car payments. The final word of advice is to not rush the process of buying a car. From the very beginning, weigh all of your options carefully and you'll make the choice that's right for you.

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