Refinancing for my mom's truck?

WallyxD · ‎04-26-2013

So, my mom was in a hurry to get a car. We settled for a sub-sub-sub-sub prime lender. She got a 2005 Explorer paying an outrageous 465$ a month for 48 months. (Yes, her credit is in bad shape, but she now has a secured card and I'm adding her as an AU to my cards for the time being.) If I had known better during that time, I would've forced to find another place. Anyway, I believe I heard the lending place say she'd be able to refinance in either two years or in two and a half years. Does that mean she's only able to refinance with them after two years? Or as a part of her contract, is she not allowed to refinance at all for two years?

She does now belong to a CU, so should she give the lending institution a call about the specifics on refinancing and based on what's said, she can then go to the CU?

I feel really bad being as though I see people on here paying much less for brand new cars and she's stuck with an 8 year old car paying near $500 a month for it. So whatever you guys can advise us to do, I will let her know.

203bravo · ‎04-26-2013

Find out if her current contract has any pre payment penalty. If it does not then simply have her find a better financing deal and she'll be fine. If it does then she will need to make the determination if the money she will be saving will offset the penalty. This early in the game - it probably will.

WallyxD · ‎04-26-2013

@203bravo wrote:
Find out if her current contract has any pre payment penalty. If it does not then simply have her find a better financing deal and she'll be fine. If it does then she will need to make the determination if the money she will be saving will offset the penalty. This early in the game - it probably will.

I forgot to mention, she got the car 11/2011. Is it still early enough for her to try to refinance?

203bravo · ‎04-26-2013

She can refi at any time that she finds a lender willing to loan her enough for the car to pay off the origianl lender. Since she bought in 2011 hopefully she is not upside down on the car and unable to find another lender. I would try --- even if she can't she'll be no worse off.

ds3 · ‎04-26-2013

How much does she owe in principal? I can't imagine a 2005 Explorer would be worth more than $7,000 or so, and finding a lender willing to go way over value would be the toughest part to refinancing it.