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Refinancing a vehicle

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JM Aggie08

JM Aggie08

Diamond Member
I financed my car last year at around 4.2% and have been seeing rates as low as 1.9% around town. I'm not saying I'll be able to lock in that low, but it's safe to assume that I could lock in at less than I'm paying now.

Would it be worth looking into refinancing for the remaining term of the loan for just another 1-2% less interest?

**EDIT** I am not asking your opinion on whether or not financing a vehicle alligns with your personal beliefs - Please don't turn this into a damn debate.
 
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JM Aggie08 said:
I financed my car last year at around 4.2% and have been seeing rates as low as 1.9% around town. I'm not saying I'll be able to lock in that low, but it's safe to assume that I could lock in at less than I'm paying now.

Would it be worth looking into refinancing for the remaining term of the loan for just another 1-2% less interest?
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How much longer do you have on your loan? What is the balance remaining? Is the goal just to lower payments or pay off sooner?

Usually I would say yes but if its almost up or a low balance it may not be worth the effort for a couple percent.
 
Next time don't spend so much of your income on a stupid friggin vehicle. Rule of thumb is not buy a vehicle you can't afford to write a check for.
 
OILFIELDTRASH said:
Next time don't spend so much of your income on a stupid friggin vehicle. Rule of thumb is not buy a vehicle you can't afford to write a check for.
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Which is impossible for 90% of people, yet most of those people need a vehicle to get a paycheck. That's what financing is for dipshit.
 
xBiffx said:
How much longer do you have on your loan? What is the balance remaining? Is the goal just to lower payments or pay off sooner?

Usually I would say yes but if its almost up or a low balance it may not be worth the effort for a couple percent.
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4 years left, ~19k. Lowered payments, income tax returns go toward it as well.
 
SunnyD said:
Which is impossible for 90% of people, yet most of those people need a vehicle to get a paycheck. That's what financing is for dipshit.
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That's why there are dependable used cars available for about 5k. Sorry you won't look cool driving it around which is so important to the 90% but it will get you from point A to point B. Then when you save up enough money to pay cash for a new vehicle you buy it. Can't save 30k? Well then you don't fucking belong in a 30k vehicle.
 
OILFIELDTRASH said:
That's why there are dependable used cars available for about 5k. Sorry you won't look cool driving it around which is so important to the 90% but it will get you from point A to point B. Then when you save up enough money to pay cash for a new vehicle you buy it. Can't save 30k? Well then you don't fucking belong in a 30k vehicle.
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Easy there, Dave Ramsey.
 
OILFIELDTRASH said:
That's why there are dependable used cars available for about 5k. Sorry you won't look cool driving it around which is so important to the 90% but it will get you from point A to point B. Then when you save up enough money to pay cash for a new vehicle you buy it. Can't save 30k? Well then you don't fucking belong in a 30k vehicle.
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I Don't agree with some stuff you post, but you are 100% correct on this.
 
JM Aggie08 said:
Easy there, Dave Ramsey.
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There will be refinance fees rolled into the loans so it might not save you any money. The interest paid can be reduced drastically by adding more to the principal. If you are looking to reduce the payment a down payment combined with a longer loan and lower interest rate can do that.
 
How much longer do you have to pay on the loan? If you did a 5 year loan at 4.2% it might make sense to refinance it to a 3 year loan at 1.9% but if you're going to another 5 year loan that's probably not such a good idea.
 
OILFIELDTRASH said:
That's why there are dependable used cars available for about 5k. Sorry you won't look cool driving it around which is so important to the 90% but it will get you from point A to point B. Then when you save up enough money to pay cash for a new vehicle you buy it. Can't save 30k? Well then you don't fucking belong in a 30k vehicle.
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While I don't necessarily disagree with you, "dependable" used cars at "$5k" are few and far between. At best you get lucky and get something with low maintenance that you can put 100k miles on for 5 to 7 years. More often than not, that 5k is only going to buy you another 5k in headaches before you know it for the average person. Sorry, most people out there aren't mechanics.

Used car pricing is just as ridiculous as new car pricing these days. Unless you know your way around servicing a vehicle, dropping 5k on a car isn't any better than dropping 5k on a car payment.
 
JM Aggie08 said:
4 years left, ~19k. Lowered payments, income tax returns go toward it as well.
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Yeah, I think it might be worth it. Perhaps even go back to 60mo for even lower payments. Helps out a lot month to month. But even staying at 48mo will still be worth it.

Go check it out. Just make sure you see what fees you are paying to refi and compare that to what you save every month.
 
I haven't seen used car rates as low as 1.9%, only new cars. Not sure you would get anywhere near that rate on a re-fi.
 
If you can refinance using the bank with no fee (ie. Penfed) and lower APR, yes, it sure will make sense to do so.

For $ 19k, 4 years @ 4.2% is $ 431 per month with $ 1,674 paid to interest, while 4 years @ 2.74% (Penfed rate) with no additional fee is $ 418 per month with $ 1,082 paid to interest. Not dramatic difference, but still saving more than one month worth of the payment is fairly ok.

But many banks charge fee under various names (Loan origination fee, Application fee, etc etc) at higher rate then PenFed. If that's the case, no, it will not make sense.
 
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