ReFinancing Auto Loan Question

[mAndrew1980]

I recently purchased a new car with a 4.9% rate over the course of 72 months. My credit is good but I had never had  a car loan before so I had difficulty getting the full loan amount that I wanted ($40K). Dealers were offering 0.9% and 1.9% but only up to $25K or $30K. Bank of America finally gave me the full loan amount with a 4.9%, which isn't horrible.

After making on time payments for six months, should I look to refinace? My scores are all around 700 right now. I would imagine I could get my APR down to 2.5% maybe?

[pizzadude]

Looks like you'll be paying over $900 in interest over the course of your first six payments, so I'd look to refinance as soon as possible, assuming that you're not upside down on the car.    Do you know the estimated book value of your vehicle, and how does that compare to your loan balance?

[mAndrew1980]

Yikes that is a lot of money in interest! The value of the car is probably $32K so I have a ways to go before I'm above water. My current payment is $637.00/month. Looks like I won't be able to refinance for probably 3 years - when I've paid $22K off. The car will surely be above water by then. Ugh.....

The car itself was like $33K purchase price but the rest of the loan amount was for taxes, etc. I put no money down.

[pizzadude]

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@mAndrew1980 wrote:

Yikes that is a lot of money in interest! The value of the car is probably $32K so I have a ways to go before I'm above water. My current payment is $637.00/month. Looks like I won't be able to refinance for probably 3 years - when I've paid $22K off. The car will surely be above water by then. Ugh.....

The car itself was like $33K purchase price but the rest of the loan amount was for taxes, etc. I put no money down.

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You might be able if you can find a lender who'll do 110% or 125% LTV ~ I think there may be some CUs who'll go that high, but you'll have to shop around.

[Ragelog]

I am pretty sure DCU will go as high as 120% LTV Nada Retail.