When Is The Best Time To Re-finance My Auto Loan?

I’m paying $314 a month on a 72 month loan and am 12 months in. When is the best time re-finance? Now, or should i wait a couple years?


This entry was posted on Thursday, February 4th, 2010 at 2:19 am and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

6 Responses to “When Is The Best Time To Re-finance My Auto Loan?”

  1. I don’t know what your interest rate is, but don’t think that rates have dropped in the past 12 months.
    It would cost some money up-front to refinance, too. The best way to ultimately save money might be to pay more than the standard payment. If you can up your payment to $350, maybe you can get rid of the loan in 5 years instead of 6.

  2. Probably on the fourth of never. Car loans, especially a 72 month loan, are notoriously hard to refinance at more attractive terms.
    The first problem you have is the length of your original loan. Cars depreciate sharply in value from the moment you drive away from the lot. One year into a 6 year loan, and you probably owe more than the car is worth.
    The second problem is used car loans are almost always more expensive than new car loans. Yes, that’s right. The car you bought new a year ago is now a used car, and any loan you get will be priced accordingly.
    Without a substantial payment against the principal or a dramatic difference in your credit profile, you may find it impossible to escape your current situation. Sorry.

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  4. It only makes sense to refinance if you move to a much shorter loan term – like three years. With a 72-month loan, you’re getting killed with interest.

  5. Never. When you refinance a new car after owning it, you refinance it as a used vehicle.

  6. Check you finance rate now and if you see a lower rate, re-finance it.

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