So if you're wondering when you should refinance a car after you've bought it then i am going
to answer that question in this video because there are definitely some reasons why you should
refinance a car and there's some reasons why you shouldn't now specifically if you're asking when
can i refinance a car technically you can do that tomorrow if you want to because there are no set
rules so if anybody told you that you have to wait six months or anything like that that is just not
true unless it's actually stated in your contract and i've never seen that happen before so if you
want to refinance you can do it tomorrow or next week but it's not necessarily the right decision
and that's why we're going over when should you refinance your car now the first reason you should
refinance your car is very important because if you've got an interest rate that's a lot higher
than what you can get at a competing lender then you definitely should refinance your car as soon
as you can because you're going to be saving a lot of money and interest now the way that you can
tell what current rates are is just by doing some basic research all you have to do is hop online
just check out your local credit unions and see what their best auto loan rates are and assuming
that you've got good credit and your income is in a good situation then you probably can compete for
those different rates because if you go out and get a car loan and let's say that the loan is
twenty five thousand dollars but you get a pretty high interest rate of seven percent and then you
finance it over sixty months well during the life of that loan you're actually gonna pay about forty
seven hundred dollars in interest which is a ton of money for just a twenty five thousand dollar
car but if you refinanced and let's say the best rate you could get on that specific car was a four
percent rate well even at four percent with the exact same terms you're gonna save over twenty one
hundred dollars in interest just because of the different interest rate so it is definitely a good
idea to refinance to a better rate if you can so if you bought your car from a dealer and you feel
like your interest rate is just a little bit too high compared to what you can get somewhere else
then definitely try to get a new rate with a refinance because you are going to save a lot
of money and if you sign for your car and you don't actually know what your interest rate is
then definitely look up your contract and find out what that specific number is as an interest
rate because if it is too high compared to what you can get elsewhere then you definitely should
be refinancing now if your credit is not in the best position when you want to refinance
then maybe it's a good idea to just wait a few months and build up some payment history so that
hopefully your credit score goes up but obviously you've got to be making all your payments on time
not just your car payment so try to do the best you can with your credit bump it up and then try
to refinance but you really shouldn't have to wait too long to do this i'm talking just a few months
because even if your credit isn't perfect when you refinance as long as you're getting a better
rate than what you started at then you're on the right track to saving some money when it comes
to refinancing a car it typically doesn't cost anything to refinance your car so technically
you could just keep refinancing every time you want to get a lower payment or a better rate
but you really don't want to do that because you can easily end up upside down in your car
what you want to do is try to keep the length of the new loan close to what you currently have left
on your loan so for instance if you have 59 months left on your current loan for the car then try to
get a 60 month contract on the next refinance that way you're close and you don't end up upside down
meaning you owe more than the car is actually worth now the next reason you might want to
refinance your loan is if you originally had a cosigner on your loan because going forward
it can actually affect their credit if you make any late payments or anything like that
so really the best thing to do is get them off the loan and the easiest way to do that is just
to refinance unless there's something in your contract where you can get the cosigner off but
a lot of the time you have to get a new loan but just remember if you needed that cosigner to get
the rate that you currently have and your credit's not much better then you're probably going to need
a cosigner going forward if you're going to need a better rate so in that case it's probably better
to just wait until your credit gets a little bit better and then you can get rid of the cosigner
for sure with a better rate now the next reason you might want to refinance your car and it's
not really recommended unless you're in a serious emergency because i don't want you just wasting
money here and going upside down but you can actually do what's called a cash out refinance
meaning you can actually take some of the equity that you have in the car when you refinance and
you can take that out as cash and use it for whatever you want so obviously if you're in a
serious emergency then maybe that cash is needed but if you're just gonna go blow it on something
it's probably not the best thing to do with your car because cars are always depreciating so let's
say that your car is worth twenty thousand dollars but you only owe ten thousand dollars on it well
with the cash out refinance because you can take some of the value out of your car let's
say that you up the new loan to fifteen thousand dollars you pay off the old loan at ten thousand
and now you've got five thousand dollars extra money that you could use for whatever
so if you have credit card debt or anything like that then it might be a good idea to pay that
off because you're getting a better rate on the auto loan because if you did get a three percent
rate that's probably a lot better than what you're paying on your credit card but you've still got to
consider that you're getting a new loan of that new 15 000 and you've still got to pay that back
so either you have a higher monthly payment or you just make the length longer on your car loan
and that's really going to be a problem because eventually you will end up upside down because
like i said cars are always depreciating so just keep that in mind you really only want to do this
in an emergency or if you're going to take care of some really high interest debt and you're not
going to continue to get into that debt and get out of the problem for the long term and i want to
make a quick point here that a lot of people don't want to refinance because they're afraid that it's
going to hurt their credit score and honestly that's the craziest thing i've ever heard because
if you are going to get a better rate and you're going to save money you are going to have to have
your credit score checked in order to get the loan because that is just a part of life whenever you
get a mortgage a car loan a personal loan anything like that you are going to have to have a hard
pull which means that your credit score is going to go down just a tiny bit but eventually it will
go back to normal and as long as you're just doing this a few times every couple years it's really
not going to be a problem for your credit score and honestly it could even be better for your
credit score to get a new loan because now you've established a new line of credit credit history
and your payment history assuming that you're making the payments on time and doing what you're
supposed to because all of that is actually going to help your credit score so that new loan could
actually be a good thing now if you're wondering where you should go to refinance your car
i'm always going to recommend to just check with your local credit unions because they typically
have very competitive rates and then if you want a direct source i would recommend checking out
lightstream loans i've got an affiliate link to them in the description below which means i may
be compensated if you click through it but they've also got very competitive rates so check them out
if you have an interest but thanks for watching and hopefully you guys learned something new