{"id":41824,"date":"2022-06-15T08:39:47","date_gmt":"2022-06-15T08:39:47","guid":{"rendered":" https:\/\/dev.way.com\/blog\/?p=41824"},"modified":"2022-06-15T09:31:21","modified_gmt":"2022-06-15T09:31:21","slug":"is-it-good-to-refinance-your-car","status":"publish","type":"post","link":"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/","title":{"rendered":"What Are The Pros and Cons of Refinancing A Car?"},"content":{"rendered":"<div class=\"ewa-rteLine\" style=\"text-align: center;\">\n<p><em><span class=\"TextRun SCXW87333643 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW87333643 BCX0\">Wondering if auto refinancing is a good option to get out of your costly car loan payments? Let&#8217;s tell you if it is good to <\/span><\/span><a class=\"Hyperlink SCXW87333643 BCX0\" href=\"https:\/\/www.way.com\/auto-refinance\" target=\"_blank\" rel=\"noreferrer noopener\"><span class=\"TextRun Underlined SCXW87333643 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW87333643 BCX0\" data-ccp-charstyle=\"Hyperlink\">refinance your car<\/span><\/span><\/a><span class=\"TextRun SCXW87333643 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW87333643 BCX0\">!<\/span><\/span><span class=\"EOP SCXW87333643 BCX0\" data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:2,&quot;335551620&quot;:2,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/em><\/p>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">Things don&#8217;t look good for the auto industry in general &#8211; the prices of new and used cars are skyrocketing, and so are the <\/span><a href=\" https:\/\/dev.way.com\/blog\/average-monthly-auto-loan-payments\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">average car loan payments!<\/span><\/a><span data-contrast=\"auto\"> If you&#8217;re running short of money before the end of the month, it&#8217;s best to look at options to save. If you have a <\/span><a href=\" https:\/\/dev.way.com\/blog\/what-defines-a-good-credit-score\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">great credit profile<\/span><\/a><span data-contrast=\"auto\">, refinancing your car should be at the top of your list.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">If you&#8217;ve caught yourself thinking &#8220;Is it good to refinance my car?&#8221;, then this post is for you.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<\/div>\n<p style=\"text-align: justify;\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-41826 size-large\" src=\"https:\/\/blog.way.com\/wp-content\/uploads\/2022\/06\/Is-it-good-to-refinance-a-car1-1024x450.jpg\" alt=\"Is it good to refinance a car?\" width=\"640\" height=\"281\" srcset=\"http:\/\/wordwblog02.way.com\/wp-content\/uploads\/2022\/06\/Is-it-good-to-refinance-a-car1-1024x450.jpg 1024w, http:\/\/wordwblog02.way.com\/wp-content\/uploads\/2022\/06\/Is-it-good-to-refinance-a-car1-300x132.jpg 300w, http:\/\/wordwblog02.way.com\/wp-content\/uploads\/2022\/06\/Is-it-good-to-refinance-a-car1-768x338.jpg 768w, http:\/\/wordwblog02.way.com\/wp-content\/uploads\/2022\/06\/Is-it-good-to-refinance-a-car1-1536x675.jpg 1536w, http:\/\/wordwblog02.way.com\/wp-content\/uploads\/2022\/06\/Is-it-good-to-refinance-a-car1.jpg 2000w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #e71346;color:#e71346\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #e71346;color:#e71346\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#Is_it_good_to_refinance_your_car\" >Is it good to refinance your car?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#When_should_you_refinance_your_car\" >When should you refinance your car?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#If_interest_rates_have_dropped\" >If interest rates have dropped<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#If_your_credit_score_or_debt-to-income_ratio_has_improved\" >If your credit score or debt-to-income ratio has improved<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#You_feel_shortchanged_by_your_first_loan\" >You feel shortchanged by your first loan<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#You_have_trouble_managing_monthly_finances\" >You have trouble managing monthly finances<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#Pros_and_cons_of_refinancing_a_car\" >Pros and cons of refinancing a car\u00a0<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#Benefits\" >Benefits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#Disadvantages\" >Disadvantages<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#When_should_you_hold_off_on_refinancing\" >When should you hold off on refinancing?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#How_to_evaluate_if_refinancing_your_car_is_a_good_idea\" >How to evaluate if refinancing your car is a good idea<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#Identify_your_financial_goal\" >Identify your financial goal<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#Calculate_your_savings_using_an_auto_loan_refinance_calculator\" >Calculate your savings using an auto loan refinance calculator<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#Compare_multiple_offers_and_rates_before_finalizing\" >Compare multiple offers and rates before finalizing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#Tips_when_refinancing_your_car_loan\" >Tips when refinancing your car loan\u00a0<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#Frequently_Asked_Questions_FAQ\" >Frequently Asked Questions (FAQ)\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#What_is_a_good_reason_to_refinance_a_car\" >What is a good reason to refinance a car?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/#Is_refinancing_a_car_worth_it\" >Is refinancing a car worth it?\u00a0<\/a><\/li><\/ul><\/nav><\/div>\n<h2 style=\"text-align: justify;\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Is_it_good_to_refinance_your_car\"><\/span><span data-contrast=\"none\">Is it good to refinance your car?<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:40,&quot;335559739&quot;:0,&quot;335559740&quot;:259}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">Refinancing is one of the best options you have to save money &#8211; provided you do it the right way. Everything that involves money also has caveats, and so does refinancing. When done with a good credit profile, a good lender, and at the right time, refinancing can be the best thing you&#8217;ve done since buying a car.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">However, if you rush to refinance under the impression that it will save you money anyway, you&#8217;re wrong. You should ideally meet certain criteria before refinancing, as we&#8217;ve mentioned below.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<h2 style=\"text-align: justify;\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"When_should_you_refinance_your_car\"><\/span><span data-contrast=\"none\">When should you refinance your car?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"If_interest_rates_have_dropped\"><\/span><span style=\"font-size: 14pt;\"><b>If interest rates have dropped<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">Banks and financial institutions set auto interest rates based on those set by the Federal Reserve. If the Fed has reduced rates recently, it&#8217;s possible that you can get a lower rate to refinance your car. Reducing your APR by even a couple of points can save you hundreds every year.<\/span><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"If_your_credit_score_or_debt-to-income_ratio_has_improved\"><\/span>If your credit score or debt-to-income ratio has improved<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">Your credit score might&#8217;ve been poor when you first financed your loan, which means you were offered a high APR. But if your credit profile has improved since then or you&#8217;ve reduced the number of loans taken by you, you can refinance to score a lower APR and save more money.<\/span><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"You_feel_shortchanged_by_your_first_loan\"><\/span>You feel shortchanged by your first loan<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">It&#8217;s also possible that despite having a great credit score, you were not given the APR you deserved. This is common at dealerships and credit unions, which try to lock you into the first offer you get. Not only do they give you fewer choices, but they also make use of your FOMO (fear of missing out) by telling you that it&#8217;s the best deal you can get.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">With car refinancing, you can shop around, compare offers from several lenders, and get the APR you deserve for your credit score.<\/span><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"You_have_trouble_managing_monthly_finances\"><\/span>You have trouble managing monthly finances<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">A problem most car owners face is that they end up overestimating their ability to repay the car loan. This could lead to cash flow issues &#8211; especially if you&#8217;re running a household with school- or college-going kids. If you find your wallet drying up before the month&#8217;s end, you can refinance your car to save some money every month.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<div style=\"text-align: justify;\">\n<p><a href=\"https:\/\/www.way.com\/auto-refinance\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/blog.way.com\/wp-content\/uploads\/2022\/02\/REFINANCE-BANNER.png\" alt=\"Is it good to refinance your car?\" width=\"744\" height=\"276\" \/><\/a><\/p>\n<h2 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Pros_and_cons_of_refinancing_a_car\"><\/span><span data-contrast=\"none\">Pros and cons of refinancing a car<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:40,&quot;335559739&quot;:0,&quot;335559740&quot;:259}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 aria-level=\"3\"><span class=\"ez-toc-section\" id=\"Benefits\"><\/span><span data-contrast=\"none\">Benefits<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p aria-level=\"3\"><b style=\"font-size: 16px;\"><span data-contrast=\"auto\">1. Lower monthly payments<\/span><\/b><\/p>\n<p><span data-contrast=\"auto\">With an excellent credit score, borrowers can save between $800-1500 every year on an auto loan. Even with a moderate-to-fair credit score, you&#8217;ll be able to cut your monthly payment by a significant amount. This money can then be used to cover other household expenses, repay student debt, or even gas.<\/span><\/p>\n<p><b><span data-contrast=\"auto\">2. Paying less in interest<\/span><\/b><\/p>\n<p><span data-contrast=\"auto\">When repaying a loan, the most effort goes into repaying interest charges, not the principal. Interest charges accumulate much faster if you have a higher APR. It is good to refinance a car if you&#8217;re looking to pay fewer interest charges and close the loan as soon as possible.<\/span><\/p>\n<p><b><span data-contrast=\"auto\">3. Pay off your current loan earlier<\/span><\/b><\/p>\n<p><span data-contrast=\"auto\">Let&#8217;s say that you are expecting to take on a new loan in the next couple of years. It would be much easier if you closed your current auto loan before that since it will improve your credit score and help you have some disposable income. You can refinance your car to get a shorter term as long as you&#8217;re okay with higher payments.<\/span><\/p>\n<p><b><span data-contrast=\"auto\">4. Tap into your car&#8217;s equity<\/span><\/b><\/p>\n<p><span data-contrast=\"auto\">If you expect to run into a financial crunch sometime soon, refinancing can help you there as well. With cash-out refinancing, you can use the equity you own in the car to borrow up to 125% of the car&#8217;s resale value. However, you must not be &#8220;underwater&#8221; or &#8220;upside-down&#8221; on the loan (which means you owe more than what the car is currently worth).<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<h3 aria-level=\"3\"><span class=\"ez-toc-section\" id=\"Disadvantages\"><\/span><span data-contrast=\"none\">Disadvantages<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p aria-level=\"3\"><b style=\"font-size: 16px;\"><span data-contrast=\"auto\">1. More interest charges with a longer term<\/span><\/b><\/p>\n<p style=\"text-align: justify;\"><span data-contrast=\"auto\">One way to reduce your monthly payment is to refinance your car loan to a longer term. However, with each passing month, the interest charges continue to pile up and you could end up paying more than the loan amount in the long run.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><strong>2. <\/strong><b><span data-contrast=\"auto\"><strong>Pr<\/strong>epayment penalty and fees<\/span><\/b><\/p>\n<p><span data-contrast=\"auto\">\u00a0<\/span><span data-contrast=\"auto\">Some lenders also have<\/span><a href=\" https:\/\/dev.way.com\/blog\/what-is-an-auto-loan-prepayment-penalty\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\"> prepayment penalties for closing a loan<\/span><\/a><span data-contrast=\"auto\"> before the end date. This is because lenders make money through the interest charged on principal\u00a0 &#8211; which they will lose if you close the loan early. Auto lenders can charge up to 2% of the remaining loan balance.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><strong>\u00a03. <\/strong><b><span data-contrast=\"auto\"><strong>You could en<\/strong>d up upside down<\/span><\/b><\/p>\n<p><span data-contrast=\"auto\">\u00a0<\/span><span data-contrast=\"auto\">If your priority is just to save money every month but don&#8217;t mind extending your loan term, there&#8217;s always the danger of going<\/span><a href=\" https:\/\/dev.way.com\/blog\/upside-down-car-loan\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\"> underwater on the loan<\/span><\/a><span data-contrast=\"auto\">. In such a case, you could end up paying more than the car&#8217;s worth in the long run.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"When_should_you_hold_off_on_refinancing\"><\/span><span data-contrast=\"none\">When should you hold off on refinancing?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p aria-level=\"2\"><b style=\"font-size: 16px;\"><span data-contrast=\"auto\">1. If the fees outweigh the benefits<\/span><\/b><\/p>\n<p><span data-contrast=\"auto\">If the prepayment penalties and other fees cost so much that it takes a big chunk out of your finances, then you should hold off on refinancing.<\/span><\/p>\n<p><b><span data-contrast=\"auto\">2. If your car is more than a few years old<\/span><\/b><\/p>\n<p><span data-contrast=\"auto\">Most lenders will not refinance vehicles older than 10 years old.<\/span><\/p>\n<p><b><span data-contrast=\"auto\">3. If you&#8217;ve almost paid off the loan<\/span><\/b><\/p>\n<p><span data-contrast=\"auto\">It doesn&#8217;t make sense to refinance your car if you have less than a year left on the loan. It&#8217;s best to &#8220;drive-through&#8221; and complete paying off the loan in the remaining term.<\/span><\/p>\n<p><b><span data-contrast=\"auto\">4. If you want to take out a loan in the near future<\/span><\/b><\/p>\n<p><span data-contrast=\"auto\">Having too many open loans can affect your credit score, besides making it hard to take on new loans. You can refinance your car loan to a shorter term so that you get to pay it off before the next loan.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<\/div>\n<p style=\"text-align: justify;\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/blog.way.com\/wp-content\/uploads\/2021\/12\/Depositphotos_320470120_XL-min-scaled.jpg\" alt=\"Is it good to refinance a car?\" width=\"744\" height=\"496\" \/><\/p>\n<div style=\"text-align: justify;\">\n<h2 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"How_to_evaluate_if_refinancing_your_car_is_a_good_idea\"><\/span><span data-contrast=\"none\">How to evaluate if refinancing your car is a good idea<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Identify_your_financial_goal\"><\/span>Identify your financial goal<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span data-contrast=\"auto\">Before refinancing, ask yourself &#8211; what is your financial goal?<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Do you want a lower APR to save on interest? Or would you rather risk more interest in the long term and extend your loan term? Or do you want to keep your current loan term and just lower your monthly payment? It&#8217;ll be easier to decide if refinancing is right for you if the final goal is clear.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Calculate_your_savings_using_an_auto_loan_refinance_calculator\"><\/span>Calculate your savings using an auto loan refinance calculator<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span data-contrast=\"auto\">Before refinancing, it&#8217;s best to calculate your estimated savings with a new APR. An auto loan refinance calculator can quickly help you make a decision on whether refinancing is a good idea.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Compare_multiple_offers_and_rates_before_finalizing\"><\/span>Compare multiple offers and rates before finalizing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span data-contrast=\"auto\">Don&#8217;t make the same mistake you did the last time &#8211; shop around for better offers<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<h3 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Tips_when_refinancing_your_car_loan\"><\/span><span data-contrast=\"none\">Tips when refinancing your car loan<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:40,&quot;335559739&quot;:0,&quot;335559740&quot;:259}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559684&quot;:-2,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"5\" data-aria-level=\"1\"><span data-contrast=\"auto\">Try to build up your credit score well before applying. According to FICO and VantageScore, a score above 660 is considered &#8216;good&#8217; and can get better rates.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559684&quot;:-2,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"6\" data-aria-level=\"1\"><span data-contrast=\"auto\">You can <\/span><a href=\" https:\/\/dev.way.com\/blog\/car-loan-pre-qualification\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">pre-qualify with multiple lenders<\/span><\/a><span data-contrast=\"auto\"> using refinance platforms like Way.com. Not only can you get a range of options, but you&#8217;ll also be able to choose the offer that fits your budget best.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559684&quot;:-2,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"7\" data-aria-level=\"1\"><span data-contrast=\"auto\">If you think that you have bad credit, try getting a close friend, parent, or sibling to <\/span><a href=\" https:\/\/dev.way.com\/blog\/joint-auto-loan-vs-co-signed-auto-loans\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">co-sign when refinancing<\/span><\/a><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559684&quot;:-2,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"8\" data-aria-level=\"1\"><span data-contrast=\"auto\">You can also choose lenders that specialize in bad credit if you are desperate and want to refinance as soon as possible.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<h2 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions_FAQ\"><\/span><i><span data-contrast=\"none\">Frequently Asked Questions (FAQ)<\/span><\/i><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:40,&quot;335559739&quot;:0,&quot;335559740&quot;:259}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h2 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"What_is_a_good_reason_to_refinance_a_car\"><\/span><span data-contrast=\"none\">What is a good reason to refinance a car?<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:40,&quot;335559739&quot;:0,&quot;335559740&quot;:259}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span data-contrast=\"auto\">The most common reason to refinance a car is usually to lower one&#8217;s car loan monthly payment. With increasing vehicle costs, more people are looking to save on expenses every month. Refinancing can help you get a lower APR, which along with a change in loan term can result in a more affordable car payment. Apart from this, you can also refinance to add a co-signer or co-borrower, which can help you pay off the loan quickly.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Is_refinancing_a_car_worth_it\"><\/span><span data-contrast=\"none\">Is refinancing a car worth it?<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:40,&quot;335559739&quot;:0,&quot;335559740&quot;:259}\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span data-contrast=\"auto\">Yes, refinancing a car is worth it &#8211; but only if you do it right! Most people refinance to reduce their APR and save on interest charges over the course of the loan. However, some borrowers may refinance to extend their loan term &#8211; which means you end up paying more in interest! Therefore, analyze the reasons for<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"2\"><span data-contrast=\"none\">Is it bad to refinance your car?<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:40,&quot;335559739&quot;:0,&quot;335559740&quot;:259}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">Refinancing can have bad outcomes if you do so without researching or for the wrong reasons. For example, extending your loan term without lowering the APR can increase your interest charges over the course of the loan. Ideally, refinancing with a higher credit will always have a great outcome for you.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"2\"><span data-contrast=\"none\">What happens after you refinance your car?<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:40,&quot;335559739&quot;:0,&quot;335559740&quot;:259}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">During the refinancing process, your new lender will pay off the remaining loan balance with the current lender. This will close the old loan and leave you free to start paying lower monthly payments on the new loan. This may be either because the new lender gave you a lower APR, or because you extended your loan term. With an excellent credit score, you can save up to $1500 every year.<\/span><\/p>\n<\/div>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.way.com\/auto-refinance\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/blog.way.com\/wp-content\/uploads\/2022\/02\/REFINANCE-BANNER.png\" alt=\"Is it good to refinance your car?\" width=\"744\" height=\"276\" \/><\/a><\/p>\n<hr \/>\n<p style=\"text-align: center;\"><em>Here\u2019s more info on\u00a0<\/em><a title=\"https:\/\/www.way.com\/airport-parking\" href=\"https:\/\/www.way.com\/airport-parking\" target=\"_blank\" rel=\"noopener noreferrer\" aria-label=\"Link top-rated airport parking\"><em>top-rated airport parking<\/em><\/a><em>,\u00a0<\/em><a title=\"https:\/\/www.way.com\/cities\" href=\"https:\/\/www.way.com\/cities\" target=\"_blank\" rel=\"noopener noreferrer\" aria-label=\"Link the best parking spots in your city\"><em>the best parking spots in your city<\/em><\/a><em>, the most affordable\u00a0<u><a title=\"https:\/\/www.way.com\/auto-insurance\" href=\"https:\/\/www.way.com\/auto-insurance\" target=\"_blank\" rel=\"noopener noreferrer\" aria-label=\"Link auto insurance\u00a0\">auto insurance\u00a0<\/a><\/u>for your car, easy <a href=\"https:\/\/www.way.com\/auto-refinance\" target=\"_blank\" rel=\"noopener\">auto refinance<\/a>, and <\/em><a title=\"https:\/\/www.way.com\/car-wash-near-me\" href=\"https:\/\/www.way.com\/car-wash-near-me\" target=\"_blank\" rel=\"noopener noreferrer\" aria-label=\"Link top-rated car washes near you\"><em>top-rated car washes near you<\/em><\/a><em>.<\/em><\/p>\n<hr \/>\n<p style=\"text-align: justify;\">\n","protected":false},"excerpt":{"rendered":"<p>Wondering if auto refinancing is a good option to get out of your costly car loan payments? Let&#8217;s tell you if it is good to refinance your car!\u00a0 Things don&#8217;t look good for the auto industry in general &#8211; the prices of new and used cars are skyrocketing, and so are the average car loan&hellip; <a class=\"more-link\" href=\"https:\/\/dev.way.com\/journal\/is-it-good-to-refinance-your-car\/\">Continue reading <span class=\"screen-reader-text\">What Are The Pros and Cons of Refinancing A Car?<\/span><\/a><\/p>\n","protected":false},"author":46,"featured_media":41825,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1962,1855],"tags":[5906,5907,5908,5909],"class_list":["post-41824","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-auto-refinance","category-finance","tag-is-it-bad-to-refinance-your-car","tag-pros-and-cons-of-refinancing-a-car","tag-benefits-of-refinancing-a-car","tag-disadvantages-of-refinancing-car","entry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.3 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Is It Good to Refinance Your Car? 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