Your car can be refinanced just like your house can. It can save you hundreds of dollars every month. That’s money you can put toward paying off other debt or saving for that big purchase. Auto refinance is fairly simple. Do a little research before you get started and save yourself a bundle of time and money in the long run. A refinance is basically getting a new loan at a better interest rate to pay off the old one. Then you start paying on the new one. Often times you get to skip a payment in the process.
There are more benefits than just a better interest rate when you do an auto refinance. You may opt to change the term of your loan. Make the term shorter and pay off the loan sooner; or you might make the term longer and decrease your monthly payments. You could keep the same term and keep paying the same amount, therefore paying more to the principal amount and less interest. That would also end your loan sooner. Most lenders do not have prepayment penalties, but make sure to ask. You would not want to pay a fee just because you paid your loan off earlier than expected.
Another added benefit to auto refinance is special coverage of the vehicle. You may like to have gap coverage which pays for things that your insurance does not in case of an accident. Mechanical coverage is also often available. This gives you coverage if your car breaks down. Look out though, these extras cost money and the whole point of refinancing is to save money. Don’t do the clearance sale thing and buy stuff you don’t really need just because it’s on sale.
There are other things to watch out for as well. Make sure that a refinance is going to be worth it for you. Generally speaking, refinance isn’t helpful unless you still owe at least $7,500; $10,000 or more would be ideal. Automobile refinance is based upon what you owe rather than the value of the car. Don’t get caught up in all the options and benefits offered to you. There are fees you need to watch out for as well. In the end, remember your bottom line is to save money. If you are not saving money, the refinance won’t help you.
For more information about getting the best deal on your next car loan or refinancing your existing car loan to start saving money, go online to OpenRoad Lending.
About the Author: Chris Goodman has been in the auto finance business for more than 20 years and has assisted thousands of consumers with their car loan needs. He is an expert on automobile refinance and car loans. Find more information at http://www.OpenRoadLending.com and see how easy it is to get a car loan.