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Should I refinance auto loan?

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Money Talk > Credit & Loans

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wealthstudent
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Should I refinance auto loan?  Reply with quote  

Hi,

I have a car loan with the following details:

Current Balance: $16,866.65
APR: 6.17%
Term: 60 months
Loan Start Date: 10/21/11

Should I refinance? This would be the second time I refinance since I bought the car new.

Thanks.
Post Wed Apr 24, 2013 5:26 pm
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oldguy
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Location: arizona
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Yeah - if you can get a <5% longterm loan, I would take it.

Two schools of thought - some people hate loans of any kind, and especially hate car loans because of the stereotype of IQ-challenged dolts driving new Cadalacs. And because cars depreciate and put you upsidedown in the loan. And becasue some folks just blow the money.

I pay little attention to that - to me it is just a way to get a <5% longterm loan, in my mind I dissociate with the car, it's just a loan that I have to manage - and I use the money elsewhere to earn more money.

Given your demonstrated ability to manage - ie, an income in the top quintile, a $130k fund, and a plan to buy a house in SoCal - I would fully liquidate the car and put that capital to better use.
Post Wed Apr 24, 2013 6:31 pm
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wealthstudent
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Thank you for the comments. I think I should've bought a used car and saved a little more money to buy it with less of a loan. It's hard to see myself or my wife without cars since we live in Los Angeles. Smile
Post Sun Apr 28, 2013 4:43 am
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oldguy
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quote:
I think I should've bought a used car and saved a little more money to buy it with less of a loan.


Maybe a used car would have been better at the time - but that was 2 yrs ago, now you have a used car.
But IMO you are missing the point - the size of the loan has little to do with the cost of owning a car. Late model cars deprecioate at about $4000/yr, that is most of the cost-of-ownership. The interest on a loan is a small cost, eg, the cost of a $16,000 4% loan is $480/yr, that adds a bit to the $4000/yr but it's not the big cost. In fact, if you borrow the $16k at 4% and invest it at 10%, the 6% is profit, you would be making money on the loan.

Like I said - I woulld take all of the equity out of the car (refi it) and invest the money elsewhere.
Post Sun Apr 28, 2013 4:16 pm
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Montgomery
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Flashy animations that don't benefit your customers or add to your content, are not what your customers are looking for. In fact, it will probably just drive them away.
Post Tue Apr 30, 2013 6:41 am
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Robinmarsh321
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I'm no economic expert, I'm sure more knowledgeable people will chime in soon, but I don't think there will be enough of a direct effect from the rate
Post Mon May 06, 2013 10:14 am
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