hey yall guy i work with just asked me if it would be a good idea to refinance his auto loan. i told him i had no idea never don't myself. so i thought i would i throw it to yall. thanks, buck

 

It depends.

Amount of loan, interest rate, time, all those factors.

The answer could be Yes, No, or Why Bother.

 

thanks raoul, he told me it was something crazy like 75 months? is that possible. buck

 

Yeah they have long term car loans.

The fact that he's asking a co-worker tells me the guy is probably in bad shape.

 

Also may depend on where he is located. On refinancing, if bought as a new car, it is now a used car. Some states may allow higher interest rates for used car financing compared to new. It was that way in Maryland, not sure about any more. When I was looking into it, the rate for new was about 12%, yeah back in the early 80's, used were 18%.

 

I worked for TD Canada Trust in the auto loan dept for a long time. Let me give you a piece of advice.....NEVER finance a car over 72 months! You'll pay for the car twice. If you have to finance over 72 months to get the payments down you should be looking at a cheaper vehicle. Because if you finance over 72 months you'll have a vehicle that is not worth anything at the end of the term plus if you go to trade it in say 3 or 5 years down the line you'll take up the a$$ in negetive equity.

 

what doesn't make sense to me is the guy just got his truck brand new like 2 months ago and is already talking about a refin.

 

IMO, as a car sales professional, refinancing is a bad idea. UNLESS, you got screwed at the dealer or your credit score has greatly improved since the purchase of your vehicle, and you are being offered a much lower rate than you are paying now. Also, if you do re-finance I would never do it after you've made the 6th payment. After that, you're starting your payments all over again, which seems dumb to me. Also, I would never finance a car more than 72 months, ever. If you go longer than 72 months, you have to keep the car at MINIMUM 5 years to avoid significant negative equity.

 

Or, buy a Honda, Acura, Lexus, or Toyota. Then it may pan out in your favor after 36 - 40 months, with regard to payoff versus market value. If you're financing a domestic vehicle 72 months; be in love with it... You're going to need to be.

Ford was recently offering 72 months at 0% APR. Well, maybe not FORD, but, a local Ford dealer was... While it's still depreciatign faster (way faster) than you're paying for it. Finincing $35,000 for 60 months at 0% APR is roughly $583/month. For 72 months, it's $486.00.

Hundred dollars is better than a sharp stick in the eye.

 

thanks for the replies i'll pass the word to him so he will quit bugging me with it and get back to... what here it comes that bad four letter word ... WORK. buck

 

When does that not happen?

What's sad is the people running around crying that they have to refinance because their payment is 'so high' and they already got 0% financing.

 

2 main questions:

1. Will the refinance come through as a new car loan (lower interest)?
2. Will there be any loan origination fees?

When we bought my wife's toyota, we financed with Toyota so we could get a few perks (lower cost, etc) then 2 weeks later, we refinanced with our CU to get the IR down from 7.09% to 4.25%. Our CU had 0 loan origination fees or anything like that. They even offered GAP insurance that was like 25% the cost of Toyota's.

 

I can't think of the last time I financed through a dealer. I normally buy used late-model; I belong to a credit union that gives very, very good rates. The dealer better bet them buy a great deal--normally they can't, so I am in a better position right off the top. Plus, the finance guy normally gets his kick-back, right? I also finance it for the shortest term that I can bear and bite the bullet on that one.

TSC

 

thats the same way i done mine shortest term i could bear. so when he asked the refin question i had no clue. btw the truck in question is a 07 mits raider not to bad a ride.

 

I have used the dealer for th last 4 vehicles I have owned. It has also been financed through 4 different companies. The dealer I go to shops around for the best rate. Only once was it Ford Credit. The others were 3 different banks. All for the same term.