Refinancing Car Loans Soaring

 Refinancing Car Loans Soaring


US-NCUA-Seal-EO11580 (Photo credit: Wikipedia)Refinancing Car Loans SoaringRefinancing Car Loans Soaring

Low interest rates and pent up demand have caused a growing demand for people to refinance older car loans they may have gotten at a higher rate.  Many people have been riding out the recession by driving old but still serviceable cars longer. When you’re worried about job security a new car seems less important. When you’re worried about the home mortgage payments the flashy new car becomes less important than status or what the neighbors think.  Young people who are dreaming about a head turning new vehicle to impress the opposite sex are facing the fact that a dream is what it really is.  At least for now.  Refinancing car loans soaring will be here to stay as long as the low interest rates are here. It looks like that means the foreseeable future.

Sales Tax, Insurance

Always bear in mind also that a more expensive car carries with it a higher sales tax and more expensive insurance payments.  At least in my city it means higher excise taxes as well.

Banks and Credit Unions have also been forced to lower rates on car loans down to record levels by the use of manufacturer subsidized loans at dealerships of 0%.  Is anyone so naive that they don’t think that having financing in hand means you can negotiate a better deal on the vehicle price by waiving the 0% financing? Frequently the 0% financing is an “either or” with a cash back on the price. Many credit unions have rates as low as 1.5%-2.5%…even on used cars…er I mean “pre-owned” of course.

The Rich Get Richer

The best rates go to those who can boast a credit score of 700 or above.  Even those with lower credit scores can still enjoy a cheaper rate.  Many re-financers report savings of more than $1,000.00 in exchange for no more than a few minutes of time.  After all it is free to apply.  It’s not like re-financing a house which requires cash outlays for a new appraisal and other closing costs.  It does represent a credit score dinging inquiry with the credit reporting agency used.  The inquiry represents a negative of a few points for 1 year.

Consumers should consider the age and value of the car before they stretch out the loan over an extended period of time.  Although every consumer knows this is true most rationalize the extended repayment period by planning to just roll the balance over into their next vehicle.


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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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