I have started getting notices about refinancing my wife’s car and saving almost 200 a month due to rates dropping. I would assume there is a catch somewhere but never looked into it. Anyone done this or have any experience?

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Posted by RoyalWe

Louisiana

Member since Mar 2018

4570 posts

Posted on 3/13/26 at 7:30 pm to AUVet21

Refinancing anything restarts the principal/interest ratio where you're paying almost 100% interest from the start. Plus, there's probably a fee you're going to pay in order to further enslave yourself to the lending company. It pays to think about the actual costs involved of financial transactions rather than how much of a note you can afford.

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Posted by thunderbird1100

GSU Eagles fan

Member since Oct 2007

71969 posts

Posted on 3/13/26 at 8:10 pm to AUVet21

Only reason to consider refinancing vehicle is if the interest rate is much lower.

If you're going from 12% to 7%, sure, maybe so that if you aren't super into current loan.

If you're taking a 5 year loan you've paid 2 years on already for a new 5 year loan with a similar or worse rate just on a lower balance to "lower" your payment, you're doing poor people stuff.

Never think in monthly payments

This post was edited on 3/13/26 at 8:13 pm

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Posted by LSUSports247

Member since Apr 2007

1010 posts

Posted on 3/14/26 at 5:50 am to AUVet21

I’ve bought two trucks and financed through Ford/GM to get extra rebates. After first payment I refinanced with my credit union for a lower rate. There were no fees, but the last time I did it was in 2014

I agree with poster above, only refinance for the same number of months remaining on the original loan.

This post was edited on 3/14/26 at 5:52 am

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