If you think you’ve been paying high interest on your auto and it’s time to refinance, you’re probably right. But make sure you come into the refinancing office prepared so that you get the best deal by the time the loan ends and not just when it begins. We’ve refinanced several times over and learned something new each time. Here are some helpful hints.
1) Improve your credit score by doing the little things. Run the free credit report at freecreditreport.com Sometimes you think you’ve closed an account and it hadn’t closed properly. Sometimes things pop up that weren’t there 6 months ago. One example is if you get new credit cards to replace old ones, or your credit card company switches banks and sends you new cards. You could see duplicate accounts for one bill. Usually companies work with you on mistakes, but it could take a few months. Be patient and watch out for those, plus don’t make too many inquiries.
2)Check online for deals. There are actually several banks and credit unions that can help you online. We found one for our car and liked it so much we refinanced our other vehicle with them. They were more than enough helpful and dropped our APR by 2 or 3 points easily.
3) Find out what your original financer may owe YOU. If you financed through a dealer, they may have charged you more for GAP insurance than your current financer will. Or you got a warranty that’s useless since you’ve moved or don’t drive your vehicle enough. Often times you can get money BACK like we did for service contracts we couldn’t use since we moved. That can knock down the amount of money being financed, thus giving you a better deal.
4) Figure out if lower payments over more years is truly your best option. It seems pretty at first, but your car isnt’ worth the same 7 years from now is it is today. Is it worth paying 20 bucks less a month when inflation is going to go up and your car is depriciating? In the long run you haven’t saved a dime unless you know FOR SURE you plan on keeping that car ’til it dies.
The more you know about your money going in, the better it will be to refinance your vehicle. Banks and Credit Unions always want your business. Make it easier on yourself.