Money Monday: Car Refinancing
Hank Investigates: Money Monday: Car Refinancing
With a 2-year-old son, and another on the way, Jessica Girouard of Ashburnham is always looking for ways to save money and she just found a new one!
Jessica Girouard, Re-Financed Car: “In a matter of an hour, hour and a half, we were saving upwards of $100 a month.”
Andrew Curran of Winthrop is now saving more than $3000.
Andrew Curran, Re-Financed Car: “I was elated.”
How are they saving big bucks? They re-financed their cars!
Denise Richard, DCU Credit Union: “For a lot of people, it's really news. A lot of people don't think about the savings they can make with the car they already own.”
It's just like re-financing your house to get a lower monthly payment. Now that interest rates are low, you can do the same thing with your car.
Mike Farren, Riverworks Credit Union: “We’ve seen cases where some people have saved up to a couple hundred dollars on their car payment.”
Here's how it works. First, get the interest rate on your current car loan. Then, get the latest interest rates from banks and credit unions. If their rate is at least 2% lower than yours, time to shift into high gear, and fill out an application.
Denise Richard, DCU Credit Union
“It’s a very easy process.”: Auto re-fi's are a lot less complicated than home re-fi's. There are no assessments or big fees.
Denise Richard, DCU Credit Union: “Within minutes they have the loan.”
So why are lenders doing this? Because they want your business.
But keep in mind, if your car is too old, or not worth a lot, or your credit history is poor, you may not be a re-fi candidate.
But Danim Ahmed of Swampscott was. It took him one trip to the credit union and he saved $3000, cutting his interest rate in half.
Danim Ahmed, Re-Financed Car: “I wasn't expecting as low as 2-3%, I was expecting maybe 4%, but to get it down to 3%, oh, this is awesome.”
Andrew's monthly payment went down $40
Andrew Curran, Re-Financed Car: “I apply it towards gas, and groceries and whatever, it all adds up.”
Jessica saved twice, because she re-financed two cars!
Jessica Girouard, Re-Financed Car: “Between both car loans over the course of four years, we save just under $5000. Too good to be true, but it wasn't.”
But before you re-finance, experts warn, make sure there's no penalty for paying off your current loan early. And make sure the term of your new loan isn't longer than your old one.
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