Author Topic: Refinance car and for how long?  (Read 1541 times)

Fireman

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Refinance car and for how long?
« on: February 08, 2014, 10:02:27 PM »
I recently traded my 2013 SUV for a 2010 Civic and financed the car, fees, negative equity.  I've been very happy with the 'downgrade' thus far but was wondering about refinancing.

Original loan:          $18,330 @ 2.99% for 60 months (329.61/mo)
Possible new loan:  $17,500 @ 1.74% for up to 66 months (270.28/mo at 66 months)

I could shorten the term to 36 months and still feel comfortable and this would save $378 in interest over the 66 month loan and about $828 over my current loan. 

However, I also could stretch it to the 66 months and invest that money elsewhere at a low 'cost.'  The other consideration is that I originally financed this car in November of 2013, refinanced it soon thereafter, and then opened two new credit cards for sign on bonuses in January.

So, based on the recent hard inquiries (credit was in the mid to upper 700's after the refinance) should I try to refinance at all?  Also, what is the opinion on length of term:  short to get this financed car paid off or longer to use this inexpensive money for other investments?

Dicey

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Re: Refinance car and for how long?
« Reply #1 on: February 08, 2014, 10:40:54 PM »
I would leave the length of the loan alone and just double or triple up on payments as your cash flow allows. That way, if you have a bunch of OT, you can pay more. If you are tight on cash another month, you can just pay the required payment without penalty or jeopardy to your credit report. At that interest rate, having the flexibility is a no-brainer.

I'm going to leave the discussion of what you bought and paid for your cars to someone else...

Fireman

  • Bristles
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  • Location: Fredericksburg, VA
Re: Refinance car and for how long?
« Reply #2 on: February 09, 2014, 06:58:45 AM »
I'm going to leave the discussion of what you bought and paid for your cars to someone else...

Trust me, i've punched myself in the face over it already.  Check out my story about cars and you'll see that financing a three year old car is the least of my transgressions!

http://www.mrmoneymustache.com/forum/antimustachian-wall-of-shame-and-comedy/six-cars-in-seven-years!/