Refinancing Vehicle

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.

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.

Is the monthly payment going to be $200 lower because the interest rate is lower?

Or is the payment $200 lower because the refinance offer stretches out the length of the loan compared to how long you have left to pay on the existing loan?

$200 a month savings on an auto loan refinance seems awfully high, so I’m betting they’re taking a loan that you’ve been paying on for a couple of years and starting you over with a new 60-72 month term

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Refinancing anything restarts the principal/interest ratio where you're paying almost 100% interest from the start

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This is sorta true. For vehicle loans - the interest in nowhere near the principal payment except for horrendously high interest loans. For example, $50k total financed, 60 month term, @ 8% - the first payment would be $1.013.82 per month, of that $333.33 is going to interest and the remaining $680.49 is going to principal.


Look at the entirety of the loan and see if it makes sense to restart it. Its always good practice to refinance down (shorten the loan term) and not up (extend the length of the loan).