Refinanance $26K, worth it?

[Dexter02]

I owe $26K on my car loan and have about 3.5 years left on it. APR is 3.9%. My payment is $647/month and I would like to get it around $550/month so I have that extra $100 for rent...I can't find a loan with an APR that low, shoudl I just stick this one out?

[mk_378]

Refi for a lower payment (via longer term), even at the same APR, is usually a very bad idea. You will pay more in total of payments and also be "upside down" longer. Only when there is no other way to avoid defaulting on the car or something else, you do what you have to do. Usually there is another way to come up with $100 more per month.

 

The best way out of a car payment that is more than you can really afford is to do whatever you can to make the payments until the car is "rightside up" then sell it and replace it with something less expensive. If you refi for a longer term and continue to make only the standard required payments you will not have positive equity for a long time.

Edited July 28, 2005 by mk_378

[hoapres]

While anything is possible, I doubt that one can get an interest rate below 3.9% on a used car loan refinance.

[outofdebt]

I'd be really surprised if you could get a rate that low for a used car refi, but anything is possible. Seriously though, new car loans are often not coming in that low.

 

My advice would be to just ride it out and try to find a different way to add $100/month to your cashflow for the rent. Do you have a cell phone you could cancel or change the service on? Could you cut back on going out to dinner, movies, sporting events? Are you paying $100/month for cable TV? If you look hard enough, I bet you could find $100 somewhere in your expenses that could come out.

 

Hey, at least you're not stuck at $647/month on an 18% loan or something...so look on the bright side

[MarvBear]

I would doubt a refi would be as low an APR as you are currently obligated.

[breaker200]

I have the same problem i used to have 07 altima for a year i was paying $387 then i wanted to refinance to make lower payments. Salesman convinced me in getting into a 2011 altima, told me about how my rates will be lower. I didn't have to put a down payment, i had the car for a year and 2months paying $489 with APR at 1.9%. i want lower payments or get out of the car into something cheaper, should i refinance?? need some advise.

[MarvBear]

I have the same problem i used to have 07 altima for a year i was paying $387 then i wanted to refinance to make lower payments. Salesman convinced me in getting into a 2011 altima, told me about how my rates will be lower. I didn't have to put a down payment, i had the car for a year and 2months paying $489 with APR at 1.9%. i want lower payments or get out of the car into something cheaper, should i refinance?? need some advise.

 

 

How would you refinance a used vehicle for less than 1.9 is beyond me.