Auto Loans

[GideonP]

Hello, can anyone help me out? I can't decide for the life of me if it's worth refinancing my car or not.

I signed up for a 60 month loan two years back. I just started out my credit history so I think I had 650-680 credit score. My dad had to co-sign to even get me the loan. They denied me at first (multiple banks).

We got a pretty decent deal at 7.89% on a $11000 loan

Now I have 36 months left and I'm thinking of refinancing since my credit score improved. It's 750 across the board (not FICO, just regular credit score from the 3 beauros)

My local credit union can do 2% on 0-48 month auto loan (I realize that's if you have like 850 credit, I'm not expecting that). I don't think I'll get lower than 4% but even then it could save me $200+

My AAoA is only 1.8 years though. If I refinance I'll get a lot lower AAoA, not to mention the dings from the credit checks and account openings, which is why I don't just go straight away to find out what rate they can give me.

Do you think it's worth the inquiry? It's worht mentioning my dad won't be co-signing this time, so I might even get a worse rate offer than what I currently have.

Any advise you can offer?

[pipeguy]

I think you are going to run in to problems here because you don't have a regular auto loan you have a Lease. Although a lease is a loan of sorts on the "amount used" vs total cost of the car plus interest, lease terms are not easy to change without penalty. I don't know that I've ever heard of a 60 month lease for a car, but I think you'll find the $11,000 is only the lease amount financed, not the total value of the car. You need to read the contract terms for ending a lease early or buying out the lease terms.

As far as going from 7% to 2% and getting something in your name only - that's worth it as long as it doesn't cost you thousands (extra) to buy out the lease and convert the balance to a straight car loan.  

[GideonP]

Sorry I didn't mean lease. This is a regular auto loan - I own the car and owe a bank money. I am not leasing from the dealer

[pipeguy]

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GideonP wrote:

Sorry I didn't mean lease. This is a regular auto loan - I own the car and owe a bank money. I am not leasing from the dealer

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Ah okay, in that case go for the lower interest rate in your name only, no question about it.

[webhopper]

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pipeguy wrote:

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GideonP wrote:

Sorry I didn't mean lease. This is a regular auto loan - I own the car and owe a bank money. I am not leasing from the dealer

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Ah okay, in that case go for the lower interest rate in your name only, no question about it.

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Agree 100%. but I would add.......  get a 36 month term, so that you're not adding another year of payments...  The payment will still be less assuming you have no lates in the last 24 months