Question

Has anyone recently refinanced their vehicle? How does all that work? I have some questions. What if your score isn’t as good as it first was when you purchased the car? Will it always go down or is there a chance for it to go up? It’s been 2 years since I bought the car and interest has been paid HELP!  

Answer 1

Just be cautious because sometimes the payment lowers because it adds time on your loan . make sure you don’t select one that adds time

Answer 2

Do you have an idea of what your credit score is? If so there are a lot of online calculators that can help you determine if refinancing is beneficial. Depending on when you purchased, interest rates have likely gone down since then so you may end up with a better interest rate despite your credit score being lower.  

Comments

@boice Ok. The only way to know if it's worth it is to know current refi interest rates, your credit score, etc. It depends on your personal situation whether it makes sense. I just looked into refi one of our vehicles 2 weeks ago and it didn't make sense for us because we wouldn't have gotten an better interest rate so our payment wouldn't have gone down.  

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@boice Most likely. But again if interest rates have gone down enough it still may be beneficial. Someone posted an article below from TBM outlining a lot of the things I mentioned.  

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@boice That's what I did by using the online calculators. I wanted an idea before having anyone pull credit.  

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Most financial institutions have their current auto loan refi rates online and many have online calculators as well. So having an idea of your credit score, and knowing what you owe on your current loan so you can plug it into the calculators should give you a decent idea. Hope that helps!  

Answer 3

Is your original financing through the dealer? Look at refinancing with a credit union, their rates are almost always better than dealer rates. You go to the credit union or there’s usually an option to apply for financing online and take your 10 day payoff (request this from your current financing institution) and you usually find out the same day what your new rate will be. I will say credit unions also go based off of loan to value rates and some have a cap. For example, my credit union finances up to 110% loan to value but be careful with this as you don’t want to be super upside down on your loan. Also make sure your new financial institution adds GAP coverage as well. I’m not clear on whether it is carried from institution but better to be safe than sorry. Also sometimes even if your payment doesn’t change a lot, it’s still better to refinance because you have more of your payment going towards your principal balance.  

Comments

@boice and I’ve refinanced with a lower score than my initial one and the credit union I used still lowered my rate by 4%