Auto Refinancing

[Jeevsie]

I bought a truck in December and I'm starting to get refinancing mailers. Is this a scam or on the up and up? They are quoting "pre-approved" rates lower than the one I've got, so it piqued my interest. Anyone have an experience with it?

 

[Gordon Shumway]

IF you're upside down on your car don't apply. Most of the time they want to get an application and look at your credit and see if they can offer anything like credit cards, home equity loans, personal loans, or whatever. Since you have only had it for 3 months, you probably don't have enough equity in the car to get a favorable position on your refinance. They will probably get you a lower payment and rate but extend your term out back to where you started. If you have a good rate, (like under 5) just keep making the payments. I'd have to know more about your situation though like your credit, car, and the company you are with.

 

[Jeevsie]

Great info! Sounds like I won't mess with it. For entertainment purposes, I went with a 6 year term with a 7.9% to get the payment down. That's why I was even considering it. GMAC financed and it's a truck.

 

[Horn_Spanker]

Austin Telco Federal Credit Union

Usually the best rates in town.

 

[BA93]

I woud think that the only reason to refinance a car is if you can get an extremely low interest rate that would either greatly reduce your payment or keep the same payment but pay it off sooner. Going to a 6 year note with 8% is about as bad of a plan as you can get.

 

[Simon Templar]

6 years @ 7.9%? Dealer financed?

That may be one of the worst deals I've ever heard of. I'd look around on that one.

 

[Bernard]

If the amount of the payment was an issue, perhaps you should have been looking at a less expensive truck. Paying on a car for six years is crazy. How are you going to feel in year 6 when you're making that same payment on a truck with 100,000+ miles on it???

Did buying a used truck cross your mind???

Bernard

 

[dustin_c1]

Ok. I read that you have had your car for 3 months. You hardly have any equity and interest rates are generally higher now than they were just a few months ago. Getting refi mailers so soon after purchasing the car sounded really fishy. Then I read:

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[Jeevsie]

I understand the implications of the equity and term. I took that rate to get the cash back. Then I pay more than the payment amount to get out sooner and save on the interest. 100,000 will never happen as I have a very short commute. Got it in December and I just turned 2,000 this week.

 

[BA93]

I read it that you were looking to refinance at that rate/term. If you are currently on a 6 yr/7.9% contract, get out of it. If you can afford more, go refi it.