Refinance a 1999 car

[mizzoutiger]

I paid off a 1999 subaru that i purchased used in 2004, in 2007. i took a personal loan out from american general finance for emergency and paid out some credit cards, interest rate was at 17% and they had  a lein on my subaru. i currently oew around 6000$. is there any way i can refinance it for lower interest.

thank you for your replies.

[cadavis0609]

Only if the amount owed is equal to or less than the value of the vehicle in most cases.

[MattH]

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@mizzoutiger wrote:

I paid off a 1999 subaru that i purchased used in 2004, in 2007. i took a personal loan out from american general finance for emergency and paid out some credit cards, interest rate was at 17% and they had  a lein on my subaru. i currently oew around 6000$. is there any way i can refinance it for lower interest.

thank you for your replies.

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That would depend whether the value of your car exceeds the amount owed, as another poster noted.  There are several websites (such as www.edmunds.com , www.kbb.com , and www.nadaguides.com) for estimating the value of your car based on model, miles, options, condition, your zipcode, etc.  You don't say which Subaru model, so I tried Edmunds assuming a 1999 Subaru Legacy with maximal options, low mileage, excellent condition, etc., and got about $7K for "dealer retail" which is more than most lenders would allow, so I would guess you probably can't refinance $6K for whatever you've got.  Could you come up with a couple thousand dollars cash to pay down the balance, so you can refinance the rest, if that's what it would take to refinance?  Alternatively if you cannot come up with much cash up front, maybe you can find ways to increase income and/or reduce expenses so you can make extra payments on that loan to reduce the principal to where refinancing would be possible.  Are you investing in anything else?  If so, then you might want to stop making that investment and redirect the money to this loan, because any other investments would have to be very speculative to equal the 17% rate on your loan!

In any case, unless you talk to a specific lender nobody can give you more than educated guesswork.  Every lender has a table of values they use for such purposes, and your lender may use a different table from some other lender.  Also the amount of risk they will undertake will depend on your credit history and any prior relationship with you as well.  For instance, when I bought my current car in 2004 and financed it with Chase Auto Finance they approved me instantly -- not only did I have a good overall credit history, but also I had a Chase credit card with over a decade of on-time payment history.

Be aware that right now is a very tough time for auto loans in general, so their underwriting standards may be pretty strict.  The fact that you are currently paying 17% strongly suggests that your FICO score was not very good when you took out that loan.  Do you have reason to believe your FICO score is substantially higher now than it was when you took out the loan in question?

So although you should do some homework to learn the value of your car and what loan options may exist, my guess is your best option will be to do whatever it takes to reduce that debt.  In these uncertain economic times many people will need to make hard choices, and the sooner those are made the better.