Auto Refinancing

[vnot]

I'm just curious as to how auto refinancing works and if I should refinance. Anyone have any suggestions per their experiences? This is my first financed car bought it in 12/2009.

Right now I have a loan balance of $13597 @ 6.5%. I pay $350/month (a little above the actual pmt).

Per KBB, my private party value of my car is $16305 (good condition). Trade in value $14725. How is the value of my car determined by banks anyway? It's a Honda Civic SI.

I'd love to pay a lower rate and my credit is really good right now 750+ (at least according to creditkarma and my reports are clean). CapitalOne is offering 4.19%, BofA 3.89% but I'm a bit nervous about the process and if I'm missing any important information that can affect my decision. Any advice would be appreciated.

[jk70]

I only recently did a financed purchase through BofA at 2.69% and it was really straight forward. They will check your credit obviously but I don't know if a refinance will be different; in other words, I don't know if its the same as refinancing a house where there are closing costs. Just call BofA or Cap One and ask.

[Gardening Grandma]

I'd just start inquiring especially at a credit union. If you get a lower interest rate and keep the payments the same, you can have it paid off sooner. What's not to like about that?

[thyme4change]

I've refinanced several cars - if you can lower the rate, it is worth it. I think they used the KBB Private Party value.

[vnot]

I definitely like the idea of paying less interest and keeping my payment the same. I just talked to BofA and they charge a $200 loan fee. I'll have to definitely check out the credit unions. Thanks so far! This would be a first for me and I don't want to make any mistakes.

[Plain Old Petunia]

Credit unions typically do not charge loan fees, so look there first. If you have to pay a $200 loan fee, there goes half of your interest savings for the first year.

[vnot]

I was approved for the best rate at one credit union at 3.875% and no fees! Almost cut my interest rate in half! Working on the paperwork to go through with everything. Thanks for the advice petunia100!