You’ve refinanced your student loans, your credit cards, and your home; so why not refinance your car too? It could save you some serious cash each month on your current auto payment, not to mention that it’s really a much easier process than you might think. Here’s why:
If you currently have a lien on your car, you don’t hold the title; the financial institution to which you make your payment does. All necessary title swapping must be done on their level, not yours. Therefore, all of the legwork is alleviated from your list of things to do. All you need worry about is finding the best deal out there to refinance your auto online. Yes, online
The recent popularity of having multiple lenders compete for your mortgage or home equity loan has trickled right on down into the car loan market. This basically means that you can plug all of your information into one secure website (be sure to check for the Verisign logo) and get a number of different quotes within minutes.
The internet offers many great alternatives to traditional lending institutions and their auto loans, as you probably have a lot of better things that you could be doing instead of trekking out to the bank (or banks) and beginning a painstaking process. For the most part, the entire refinancing process online can be completed on your lunch break while still leaving you time to grab a bite to eat.
A few caveats to be on the lookout for :
- Make sure that you get the payoff from the financial institution that currently holds the lien on your car before you start or agree to anything. Many times, the balance of your auto loan will be higher than the amount of the original financed, especially within the first six months of your loan’s life (give or take a few months, depending on your terms). It may be worth it to hang onto your note for a bit longer, as the principle loan amount will begin to drop shortly.
- Some refinancing lenders will attach a few for this service. Be sure to read the fine print before signing anything.
- Your insurance company will need to know who the new financing establishment is (who holds the first spot on the loan). Don’t rely on anyone to take care of this important task for you; contact your insurance company yourself to make sure that all is taken care of.
Be sure that you refinancing your loan payment is worthwhile in the long run. By refinancing your vehicle to a lower payment, while simultaneously adding two years onto your car note, you will be paying this same, new amount for an additional 24 payments, costing you hundreds of dollars more before your vehicle is officially yours. A mere $30 a month for two years (or 24 months) is $680.
If you really can’t afford your car note, you may want to consider selling it outright or trading it in for a less expensive and/or older model. Potentially increasing fuel economy (while maybe lowering your insurance payment) are two bonuses that deserve your consideration while in the process of reevaluating your current car payment situation.
