Feb 1, 2008 3:36 pm US/Eastern
3 On Your Side: Refinancing Your Auto
PHILADELPHIA (CBS 3) ―
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The price of gas is going through the roof and auto insurance can cost you big bucks too! But did you know there may be a way to save money on your car loan? All this week, 3 On Your Side's Jim Donovan has been giving us advice on managing our money.
CBS
The price of gas is going through the roof and auto
insurance can cost you big bucks too! But did you know there may be a way
to save money on your car loan? All this week, 3 On Your Side's Jim
Donovan has been giving us advice on managing our money. Today he steers
us in the right direction.
As interest rates drop, people's thoughts turn to
refinancing. Swapping out one home loan for another.
But did you know you may be able to do the same on your car loan and save cash
too?
What's the interest rate on your car loan? "I
don't know the interest rate," said one woman. Another woman said,
"I don't have any idea what the interest rate is." Whether you
don't know or you know and it's sky high, you may be able to save big bucks by
refinancing.
"A lot of people don't get the finance rate that they
should when they buy a car," said Jeannine Fallon with Edmunds.com.
"Either they don't realize it's negotiable at the time of purchase or
maybe their credit rating isn't that great and they're not offered a
particularly good finance rate," Fallon added.
Let's say you have a 5 year loan for $20,000. At a
rate of 12% your monthly payments would be $444.
But if you refinance at 7% after just one year, your monthly payment drops to
$404. Over the course of the loan it's a savings of $1936.
So where do you sign up? "It's a program that's
available from online lenders, banks and credit unions now and usually there's
no fee involved which is really a special deal for consumers," Fallon
said.
Capital One Auto Finance and eLoan.com are some of the
biggest auto refinancing companies, while Bankrate.com can match you up with a
bank to refinance.
So find out what your interest rate is. "If
it's anything higher than the national going rate, you should really
re-evaluate and try to refinance," Fallon suggested.
As long as you have at least a year on your car loan, auto
refinancing may be an option for you. Just be sure to keep the term of
your loan the same. If you have 36 months left, refinance for 36 months,
don't extend the payments, otherwise you're defeating the purpose and will end
up spending more in the long run.
www.edmunds.com
www.capitalone.com/autoloans
www.eloan.com
http://bankrate.com/
www.hsbcusa-autoloans.com
http://www.lendingtree.com/
http://loans.citifinancialauto.com/
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