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Vehicle refinance?

YotaAtieToo

Thick skull
Joined
May 19, 2020
Member Number
142
Messages
11,663
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Bonners Ferry, ID
So we bought my wife's truck 2 years ago. I think the loan was about $35k, 60 mo, 2.99% apr. We new the payment would be a little high, ($620) but it wasn't an issue at the time, it was right after the fire and we literally had no bills :laughing: we figured we would pay as much as we could down, then refi later if our situation changed. Its still not an issue, but we noticed that they're offering used vehicle loans as low as 1.99% in 48 MO loans. We are trying to buy a house, so a little extra money each month could be a good thing.

We owe $20k on it now and it blue books for $30k. Assuming I can get the 1.99%, $20k over 48 months is ~$425/mo. So all in that's still only 72 months total and at now 1.99%.

I'm thinking a lower monthly payment could possibly look better to lenders, but also, I'm not sure if the hit to my credit will offset that negatively.

What am I missing?

I half joked about trying to "pull out equity" and use the $10k on for the, but that feels wrong for some reason, even at the 1.99%.
 
i doubt a lender will care over a couple hundred bucks a month on a vehicle loan unless you are trying to buy at the absolute skinny edges of what you really can't afford.

if you want to justify it that way to yourself, have at it :flipoff2:

how much will they charge you to to redo the loan?
 
I’m fairly certain you won’t get that rate for a refinance on auto loan. Auto Refi loans are typically priced way higher than purchase. Most people putting the effort into refinancing something short term like an auto loan are in financial trouble, or see trouble coming on the horizon, so that runs up the rate because it’s a higher risk product.

your best option is to call your current auto lender and ask them to lower the rate, extend the term when you mildly threaten to leave, but they might tell you not to let the door hit ya on the way out.

your next best option would be to sell the truck in this insane demand truck market and buy a car or crossover with the equity and have no payment.
 
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No trouble refinancing that thing. Hit up your local credit union and let them have at it. Seems like the one I’m a member of does half their business doing refi’s. It’s not like a house. There’s no fees and it’s a simple interest loan.
 
KBB means jack shit. Banks run off NADA loan.

Years ago I would finance a truck, bank would give me the difference in cash between value and what I paid. Used "equity" to fix truck. Profit. So its possible.
 
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i doubt a lender will care over a couple hundred bucks a month on a vehicle loan unless you are trying to buy at the absolute skinny edges of what you really can't afford.
if you want to justify it that way to yourself, have at it :flipoff2:

how much will they charge you to to redo the loan?

You're probably right, but the lower payments along with lower rate would be nice.

Working seasonal, a lower payment would be nice. We obviously pay extra when we can.

No idea what the fees would be.

I’m fairly certain you won’t get that rate for a refinance on auto loan. Auto Refi loans are typically priced way higher than purchase. Most people putting the effort into refinancing something short term like an auto loan are in financial trouble, or see trouble coming on the horizon, so that runs up the rate because it’s a higher risk product.

Makes sense.

your best option is to call your current auto lender and ask them to lower the rate, extend the term when you mildly threaten to leave, but they might tell you not to let the door hit ya on the way out.

How is that different from a refi?

your next best option would be to sell the truck in this insane demand truck market and buy a car or crossover with the equity and have no payment.

We could, but we use the shit out of it.

No trouble refinancing that thing. Hit up your local credit union and let them have at it. Seems like the one I’m a member of does half their business doing refi’s. It’s not like a house. There’s no fees and it’s a simple interest loan.

I went through a credit union from my union, so far I'm happy.

Funny how opposite some of the responses are on here.

KBB means jack shit. Banks run off NADA loan.

Years ago I would finance a truck, bank would give me the difference in cash between value and what I paid. Used "equity" to fix truck. Profit. So its possible.

Either way the truck is worth a decent amount more than we owe.
 
Right now $500/ month works out to about 100k they will loan you on a home... so every $100/month you save you should approve for roughly $20k more in home. Beyond trying to max out on the value home you buy/approve for it wont make much of a difference.
 
I would wait until after you purchase a home. The hit to your credit will make the mortgage company look into it. The lower payments might not be a negative to the them, but what if it is?
 
Not trying to max out our approval ceiling :laughing:just thought it might be a bonus to the plan.

What's funny is that around me a brand new $375k house is far cheaper than a $250k older house. The older places cost a fortune to insure, if they even will. I know a few paying $7k+/yr in insurance :eek:

The new house is $900/yr, but with bundle discounts, works out to be $140/year.
 
I recently refi'ed a truck I bought, but my situation was way more....uh....weird.

While my wife was in anesthesia school I joked that she would be buying my "dream truck" when she graduated. I had been driving a $600 chevy half ton for 8 years and she was tired of it always needing work.

Over the years when it was "my turn" to get a better truck something would come up. Her daily would need to be replaced, she'd cross another gateway in her career or educational pursuits that would mean we need the money elsewhere and a couple times I just backed out. Well, she took it as a personal goal and point of pride to buy my truck and that actually motivated her in school.

A little while after graduation my shit box broke down again, she decided it was time. She knew everything I wanted in a truck and started shopping for it. She found some fully loaded brand new f350 with every option and an $80k+ price tag. I fought and we compromised by buying a slightly more reasonable 2019 ram 2500 laramie with most the options for $25k less. One hell of a compromise, right? :lmao:

I didn't think this would happen, so I just went to the dealer instead of a local bank or credit union. I figured when she seen the numbers on paper it would get real and we would run. I never thought we'd actually be offered the loan since she didn't work for the 3 years she was in school.

They slapped down the monthly payment and she said "huh, that's less than I expected." Shit! That's not how that was supposed to go! I said it's too much. She let me know she was buying me a truck that night and I could leave with her car since she won't need a ride home.

The dealer financing sucked at 7%. After the first year I went to my credit union, refi'ed at 3.49% which was .5% below their advertised rate. That let me knock a year off the term and will save about $4k if I were to let this go to term.

The credit union was awesome to work with. No nonsense and we did everything but the document signing over the phone and email. They never asked to see the truck or made me go through any other annoying processes.

I wouldn't pull money out of that thing or extend the term at all, but if you wanted a lower interest rate they'll probably make it happen.
 
So basically I should just call the bank and ask for the interest rate to be lowered and possibly add 12 months to the term?
 
So basically I should just call the bank and ask for the interest rate to be lowered and possibly add 12 months to the term?


No you should drive it down to me and I will buy you out of your loan for what's owed. Then you can buy your dream house and wont have another payment over your head.
Dont worry, your wife will understand and im sure she will be plenty happy with the samurai on tracks as soon as you get the power steering on it. Hell it might be the only thing that will make it out of your driveway in the morning.


Oh and I got the parts this afternoon, thanks. Let me know what I owe you.
 
So basically I should just call the bank and ask for the interest rate to be lowered and possibly add 12 months to the term?

To a future creditor, that will probably be the same or most likely worse than where you are now. Pay down your highest rate notes first, if this is it buckle down and pay it off or sell it, pay off note, and buy a shitbox with your "equity". Anything less and you are just kicking the can down the road.
 
If you have to borrow the down payment for a house, you cannot afford it.
 
So basically I should just call the bank and ask for the interest rate to be lowered and possibly add 12 months to the term?

I worked in credit unions for many years and currently working for a large bank. By asking for a lower rate and longer term, that’s a refi. They won’t just change it when requested. People ask me this quite often and I have to educate. It’ll lead to pulling your credit and all that jazz. *Usually* those low advertised rates only apply to new loans(not new car but it can’t already be financed with that institution). Most have some fine print that mention not available on refi’s. I watch rates and read fine print a lot because we go through a lot of vehicles in our house and I’m the negotiator/finance person.
 
No you should drive it down to me and I will buy you out of your loan for what's owed. Then you can buy your dream house and wont have another payment over your head.
Dont worry, your wife will understand and im sure she will be plenty happy with the samurai on tracks as soon as you get the power steering on it. Hell it might be the only thing that will make it out of your driveway in the morning.


Oh and I got the parts this afternoon, thanks. Let me know what I owe you.

OK, sure, of course I'll sell it to you for 2/3rds the value

​​​​​​:flipoff2:

Snow turned to rain early this morning, 6" of wet stuff. Definitely don't need tracks for that. :frown:

Dang, that was fast, I dropped them off yesterday at 4:45pm. Don't worry about it, I still feel like I owe you for rounding up the last parts cache I got from you.

To a future creditor, that will probably be the same or most likely worse than where you are now. Pay down your highest rate notes first, if this is it buckle down and pay it off or sell it, pay off note, and buy a shitbox with your "equity". Anything less and you are just kicking the can down the road.

This is the only debt we have, like I said, we can afford it, just figured if we can lower the interest rate and monthly payment, why not. I have plenty of shit boxes already :flipoff2:

If you have to borrow the down payment for a house, you cannot afford it.

Reading isn't your strong suit I guess?

I worked in credit unions for many years and currently working for a large bank. By asking for a lower rate and longer term, that’s a refi. They won’t just change it when requested. People ask me this quite often and I have to educate. It’ll lead to pulling your credit and all that jazz. *Usually* those low advertised rates only apply to new loans(not new car but it can’t already be financed with that institution). Most have some fine print that mention not available on refi’s. I watch rates and read fine print a lot because we go through a lot of vehicles in our house and I’m the negotiator/finance person.

OK, that makes sense. Kinda what I figured. Maybe I'll call them at some point, or just leave it as is. I'd rather not run my credit just to find out they won't be able to do the 1.99% on a refi.
 
OK, that makes sense. Kinda what I figured. Maybe I'll call them at some point, or just leave it as is. I'd rather not run my credit just to find out they won't be able to do the 1.99% on a refi.

1.99 is rather low and maybe unrealiatic, but 2.99 or 3.99 is more reasonable

an inquiry isnt the end of the world, and you can do several of them without each one impacting credit individually.

​​​​wont know till you try it. but seriously, penfed.
 
No trouble refinancing that thing. Hit up your local credit union and let them have at it. Seems like the one I’m a member of does half their business doing refi’s. It’s not like a house. There’s no fees and it’s a simple interest loan.

100%

I refinanced from Ford to a local credit union. Ford was something like 7.1% or something stupid. LCU offered 1.9%. But, if I made them my primary bank or whatever, they had a thing where'd they take off 1% on a loan. Ended with .9% on my truck. Saved quite a bundle.
 
There it is... weren't you considering using the 10k equity for a down?

Again, read it, I said I joked about it. It wouldn't be the down, just added on. Doesn't really make sense to borrow from one to pay another.

1.99 is rather low and maybe unrealiatic, but 2.99 or 3.99 is more reasonable

an inquiry isnt the end of the world, and you can do several of them without each one impacting credit individually.

​​​​wont know till you try it. but seriously, penfed.

It's already 2.99%

Sounds like it most likely won't pan out. Like woods said, if we were paying 7% or something it might make more sense.
 
The only option that I would consider before closing in your house is the “sell it and pocket the cash” option. You have excess cars, so you guys could go back to driving what you were before. It would eliminate your only debt and add some cash to your pocket. After the house and move are done and you settle into your new payment structure, getting a car loan would be easy.

Do not finance, or even look at financing anything other than house. With this being your first home and depending upon what loan package you end up with you may also have to explain any cash influxes (some do not allow gifts. When we bought our first home we sold my wife’s 4 yr old truck and my first rock buggy and had to “prove” where that money came from with copies of the bill of sale.

On the last house because of the 11 months it took us and because we were looking in multiple regions, we had multiple hard inquiries and had to explain all of them, even though three were from the lender we were signing with.
 
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So we bought my wife's truck 2 years ago. I think the loan was about $35k, 60 mo, 2.99% apr. We new the payment would be a little high, ($620) but it wasn't an issue at the time, it was right after the fire and we literally had no bills :laughing: we figured we would pay as much as we could down, then refi later if our situation changed. Its still not an issue, but we noticed that they're offering used vehicle loans as low as 1.99% in 48 MO loans. We are trying to buy a house, so a little extra money each month could be a good thing.

We owe $20k on it now and it blue books for $30k. Assuming I can get the 1.99%, $20k over 48 months is ~$425/mo. So all in that's still only 72 months total and at now 1.99%.

I'm thinking a lower monthly payment could possibly look better to lenders, but also, I'm not sure if the hit to my credit will offset that negatively.

What am I missing?

I half joked about trying to "pull out equity" and use the $10k on for the, but that feels wrong for some reason, even at the 1.99%.


So, you currently owe 3 years on the truck... That's $22,320 at the current payment and rate...

Refi'ing that to a 4 year adds a year (duh)... At $425 a month that's $20,400.

The question is whether or not $1900 is worth another year of payments or not...

In your position, I'd refi the loan and continue paying the original $620 a month and have that bastard paid off in 33 months... 3 Months faster than you're currently on the hook for.


EDIT: I am also inclined to agree with Wilson... Having gone through the mortgage process 3 times now, it's to your advantage to clear the deck of debt beforehand.
 
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100%

I refinanced from Ford to a local credit union. Ford was something like 7.1% or something stupid. LCU offered 1.9%. But, if I made them my primary bank or whatever, they had a thing where'd they take off 1% on a loan. Ended with .9% on my truck. Saved quite a bundle.

You've bragged about paying that loan off years in advance. If you had .9% for 60+, and intended to keep the truck, I wouldve rode that bitch to the bitter end.
 
You've bragged about paying that loan off years in advance. If you had .9% for 60+, and intended to keep the truck, I wouldve rode that bitch to the bitter end.

I have a 0.05% loan on my skid steer and as much as I want to write a check for it, instead of continuing with the monthly payment; I haven’t.
 
You've bragged about paying that loan off years in advance. If you had .9% for 60+, and intended to keep the truck, I wouldve rode that bitch to the bitter end.

Naw. I wanted to get out from that note. I just wanted that truck to become mine. Having a loan I think affected the insurance rate too. I can't recall. But yea, I just wanted it paid off as quick as possible. Hated having the string attached. Didn't feel right driving it when I still owed on it. Wasn't "mine".
 
I have a 0.05% loan on my skid steer and as much as I want to write a check for it, instead of continuing with the monthly payment; I haven’t.

What's the angle here? :confused:
 
I have a 0.05% loan on my skid steer and as much as I want to write a check for it, instead of continuing with the monthly payment; I haven’t.

What brand and through who?

I have my eye on a few pieces that I cant justify, but I'd take the dive for that rate.
 
What brand and through who?

I have my eye on a few pieces that I cant justify, but I'd take the dive for that rate.

Bobcat, was a promo rate late 2019. Loan is held by “Wells Fargo.” Machine and implements. Cat was around 5% at the time and $8k more on the package.
 
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