Refinancing an older car...

Exonumist · ‎09-02-2014

I'd like to refi my auto loan as I'm really paying too much in interest at 4.5%. I'm running into a few issues. Firstly the car is a 2004. So that limits what banks I can go through. Secondly even though the value is in the 15-16k range private party I'm being told it's only worth 12.9k. USAA doesn't take any of the options into consideration and this car has everything. I currently owe 12k, but I would like to take out more and pay it back down immediately to reduce the hit to my credit. Any ideas what bank to go through? If at all possible I'd rather not deal with the hassle of providing any income documentation. In the past year I became self employed and it may prove somewhat difficult until I file taxes.

Chris123nTx · ‎09-04-2014

Just my opinion, but I think there is zero chance of you getting a new loan on this car. The age alone is way past what banks are going to do regardless of the options or anything else.

Could be wrong of course, but even if you were to find someone willing to fianance a car that old, getting a rate better than the 4.5% would just never fly. The rate you have is a really good rate with all things considered.

Adding in the fact that you are now self employed with no income documentation or tax returns.

"If at all possible I'd rather not deal with the hassle of providing any income documentation. In the past year I became self employed and it may prove somewhat difficult until I file taxes."

So to sum it up, you are looking for a new loan on an 10, going on 121yr old car with a value that might or might not be near what you owe on the vehicle, and dont want the lending facility to go to the hassel of looking at your income.

I am not trying to be mean, but being blunt on this, if you can't swing it right now and are convinced a private party would pay you 15-16K for it, then I think you should sell it and buy a cheap used car until you can establish your business more.

Good luck with it. A tough situation to be in.

Exonumist · ‎09-04-2014

@Chris123nTx wrote:
Just my opinion, but I think there is zero chance of you getting a new loan on this car. The age alone is way past what banks are going to do regardless of the options or anything else.

Could be wrong of course, but even if you were to find someone willing to fianance a car that old, getting a rate better than the 4.5% would just never fly. The rate you have is a really good rate with all things considered.

Adding in the fact that you are now self employed with no income documentation or tax returns.

"If at all possible I'd rather not deal with the hassle of providing any income documentation. In the past year I became self employed and it may prove somewhat difficult until I file taxes."
http://ficoforums.myfico.com/t5/forums/editpage/board-id/autoloans/message-id/44347
So to sum it up, you are looking for a new loan on an 10, going on 121yr old car with a value that might or might not be near what you owe on the vehicle, and dont want the lending facility to go to the hassel of looking at your income.

I am not trying to be mean, but being blunt on this, if you can't swing it right now and are convinced a private party would pay you 15-16K for it, then I think you should sell it and buy a cheap used car until you can establish your business more.

Good luck with it. A tough situation to be in.

The car is valued by KBB.com for a range of 14.1-15.6 and I've always gotten more then blue book when selling cars. We're talking about a car that while it is almost 12 years old it only has 43,000 and has always been garaged. It looks and drives like new. So the value is higher. That being said, I was just hoping that someone might know of a bank that doesn't care about a car being older. I have no intention of selling the car. Would just like to pay a little less interest and if that's not possible it's really not that big of a deal.

Edit:

Also just wanted to add as a data point that USAA WOULD refinance the car. The lowest rate on a car that old was something like 7.8% so I didn't go through with taking an inquiry.

StartingOver10 · ‎09-07-2014

Agree with the poster that replied. You have a good rate now considering the age of the vehicle. It might be worth more because of the condition and the milage, but the lender looks at 'averages' (KBB and NADA), not your specific vehicle because when they underwrite, they are using worst case situations.

Yes, your car is in excellent condition with low milage. Lender is still going to treat it as a collateral type loan. This is one of those times where it is best to leave well enough alone.

Since you have the extra cash now (from your original post where you want to pay down more after the new loan), if you want to reduce your balance, just pay down the existing loan.