Quote:
Originally Posted by Joshsevo
My intrest rate on my car this very second is 9% is will be a 6.35% after the refiance. so it averages out to saving me 2300 over the life of the loan. Do the math.
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Ok, I will do the math. How long did you have 9%? 3 months?
If you financed 30k for 5 years at 9%, your monthly payment would be $622. After a year you would have paid $2500 in interest and still owe 25k. If you took that 25k and refinanced at 6.35% for 4 years (remember, you've already paid for 1 year, so you have to keep the refi at 4 years to avoid extra interest). If you do that, you save $1000 in interest over the next 4 years compared to the original rate, but your monthly payment goes up to $709 ($87/mo higher). So, I have no idea how you can save $2300 by going from 9% to 6.35% unless you just recently purchased the car, which doesn't apply to Joel (he says he has 4 years left, which means he started with 5), and he by no means wants his monthly payment to go up.
It is a very bad sign when you start refinancing cars, because that means you probably cannot afford it and/or you made a very poor decision when you first bought it (i.e. agreeing to 9-11% APR). FWIW, my Evo is at 3.99%.
