How to Find the Best Car Refinance Deals
Financing and refinancing a vehicle can be a confusing process, and most people don't know where to even begin looking for the best car refinance deals or even how the process may work. A car finance deal is a multi-year agreement that may be more flexible than you think. If you signed an agreement for a higher interest rate, are behind on your payments or had to have a cosigner due to poor credit or other circumstances, you may be able to refinance your loan. A new loan can allow you to take advantage of lower car refinance rates and lower payments, catch payments back up and remove the cosigner from your loan. While there are many reasons to refinance, the most compelling one is to save money.
Step 1. Start with Your Current Lien Holder
The best place to look for car finance may be your current lender. Your current lender may even be able to offer you refinancing if you are a few payments behind. It is a common myth that the lien holder would rather repossess your vehicle then help you. The truth is it costs the lender more to take your car than to keep you in it.
Step 2. Your Bank
If your current lien holder cannot or will not help you, look to your bank. Here is where a good relationship with your bank comes in handy. Many banks offer car financing and refinancing loans. Call your bank's loan manager to find out about what rates are offered and any sales or special deals available to you.
Step 3. Web Search
If your current lender or your bank can't or won't help you, there are other places to search for a great deal. There are a great many third party lenders available for auto refinancing. A simple web search will net thousands of them. When looking via the Internet it's best to compare the offers of several companies to ensure the best deal before making the final decision.
Step 4. Dealerships
The last place you should look is the dealership due to the much higher interest rates they charge. However, many dealerships and car lots offer no credit check and other credit options you may not be able find elsewhere. If you're looking to refinance a car, the dealership you bought it from may be a great place to start. Most automobile dealerships have several lenders that they work with, giving you more deals to choose from. Sometimes dealers can even get you a refinancing deal from the manufacturer for an even lower interest rate.
Tips and Cautions
Be careful if offered a deal too good to be true, because it just may be. Make sure to check out any company you choose to sign with and be sure to read the small print. Using a third party auto refinancing search tool may be an excellent way to get the best car refinance deals, but there are unscrupulous companies out there.
Another thing to consider is the length of the loan. If you started with a five-year loan and made two years worth of payments, refinancing for an additional five years means you will be paying on the car for seven years. It may be worth it to ask your mechanic if the car will last the life of the loan.