Refinancing car loan

[Benzadmiral]

I looked into the refinancing thing in 2007 with the Park Avenue, but the interest rates I found then (~8 %) were so close to the dealer's that it wasn't worth my time. This go-round, however, a local/regional credit union is offering 1.49 APR on auto loans, including on used cars.

I'll save, logically enough, half the interest -- about $250 -- I would have paid at 2.99% (though I'll save more as I send payments ahead on the principal; and yes, I can pay it off early without penalty). Plus my payment amount will go down $12 a month. That alone is a big savings for my budget!

I'll close on it on Saturday, put $100 in an account there, and try not to sprain my arm patting myself on the back. . . .

 

[NMBurb02]

So you went through all of this to save less than $250, meanwhile tying up $100 in a checking account you do not need? And if you are paying extra on the principal, the $12 per month savings are moot.

 

[gofast182]

I refinanced my S2000 about a year after I bought it. My rate before wasn't bad but the refi. did help me pay it off faster. If you've got a chance to save, why not take it?

 

[cptbarkey]

the time/money you spend driving to/from the bank and then worrying about a loan you already agreed to in the first place and then spending the time making a forum post will outweigh the interest you are paying right now. guess its too late at this point.

 

[Benzadmiral]

Gee, I wondered how some people could make the fact that I'm, yanno, saving money into a bad thing. Guess I know now. (Not you, gofast182.)

 

[Quattro Pete]

Originally Posted By: Benzadmiral
This go-round, however, a local/regional credit union is offering 1.49 APR on auto loans, including on used cars.

That's a great rate on a used car loan. My local credit union is currently at 2.25%.

 

[Benzadmiral]

I'd have checked with the credit union and arranged my financing before I went car shopping. But my experience with my own employer's credit union was that (a) their rates weren't much better than a bank or a dealer, and (b) worse, they would only cover used cars 3 years old or younger. True, the Regal qualifies on that; but generally speaking, the kind of cars I was considering had to be older than 3 for me to afford 'em. So I never thought about a CU until I saw an ad on TV last month.

Oh, and the money I have to tie up in this checking account to become a member is only $10, not $100; that was a typo I didn't see in time to correct.

 

[NHHEMI]

Originally Posted By: gofast182
If you've got a chance to save, why not take it?


Exactly. BITOG'ers will go out of their way to save a $1 on oil and proudly brag they did so to the world but this guy has a chance to save a couple hundred bucks on a car loan and everyone is against it? Just another of the absurdities that takes place here.

ANY money saved is a good thing.

 

[itguy08]

Congrats!

I did something similar with my car. Took the loan for 5 and paid it like a 4 year loan. 2.5 years into it I was able to refinance with our credit union for a much cheaper rate for 2 years and saved about $200.

 

[SwampSurvivor]

I'd do it. Seems like a lot of work for $250 but, hey, it's for $250!

 

[Benzadmiral]

No, Miller88, it wasn't much work. I stopped by the branch near me about two weeks ago, got some questions answered and left my info. The loan lady called me this morning. I scanned and emailed her my registration and proof of insurance; then called my insurance company to update them and give them the contact info with the new lienholder. Saturday I'll go by and finish things up.

I've put in a lot more work for lesser returns (e.g., marriage), so this was not bad at all. Besides, I'll save still more by paying the thing off early.

 

[Tdbo]

That is a good rate for used. Nothing wrong with saving money.

 

[eljefino]

$250 is worth it! Think about people clipping coupons to save 25 cents. I've bought cars for $250... one payment.

OP can likely set up an auto-draft or online pay so he doesn't even have to worry until some day in the far-off future his title shows up in the mail.

Plus I approve on general principles of punking the selling dealer.

 

[HTSS_TR]

If you keep paying the same amount after refinanced from 8% to 1.5% you will save few monthly payments. Also your credit score may improved a little for paying off the old loan.

 

[dishdude]

Better in your pocket than the banks!

A couple years ago before the credit card companies got stingy, I used to pay off my car loans off with a 0% balance transfer. Now they all charge fees if you try that, if they even offer it at all.

 

[Benzadmiral]

Originally Posted By: eljefino
. . . Plus I approve on general principles of punking the selling dealer.

I recall reading here that switching like this in the first three (?) months will cut the salesman or the dealer out of some of their profit -- is that right?

 

[SatinSilver]

Saving $250 is almost a car payment or a car payment to some. One less is a good thing. I'd take that deal.

 

[kmcavin]

I refinanced my Outback at my local credit union at a 1.74% rate just last week. I'll save $450 on financing for less than an hour's work. I'd rather have the interest go to the local Credit Union than BMO Harris anyway.

 

[Benzadmiral]

Originally Posted By: satinsilver
Saving $250 is almost a car payment or a car payment to some. One less is a good thing. I'd take that deal.

Even if I ran it out to the full 48 months, I'd be saving another $12/month, or $576. Put it together with the interest saving above, and we're talking a new set of tires plus window tinting!

 

[pandus13]

Originally Posted By: kmcavin
I refinanced my Outback at my local credit union at a 1.74% rate just last week. I'll save $450 on financing for less than an hour's work. I'd rather have the interest go to the local Credit Union than BMO Harris anyway.

for my Yota, I had to go to my local BMO Harris 4 (four) times, to setup everything (account, payment, check they have the right address in the system)
never got the book with the scheduled payments from them. or any initial paperwork
if i would haven't done that, i have a guess they would report me for late payments...

OP, good for you. money in your pocket. ignore the nay-sayers and give us more writings about driving that beauty...