Savings On Car Payments: A Pandemic Could Be The Best Time To Refinance A Car Loan To Save Money On Your Car

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CHICAGO (WLS) – When people think about saving money, they rarely think about refinancing their automobile, but right now, it might be the best time to save money with your car because. As the ABC 7 I-Team discovered, the pandemic has created an opportunity for savings.

“Our payment went down by almost $ 150,” said Jason Mason, when he found out how much he and his family would save each month on paying for their car. “It’s pretty easy. A smooth process that worked really well.”

The Masons had just bought a house and were looking to refinance it when they came across information about refinancing their car. Their interest rate on their Subaru went from almost 8% to 3.24%.

“I think this is my first time refinancing anything online, which has been surprisingly easy,” adds Mason.

“People have to think about refinancing their cars just like they refinance their mortgages. Outstanding auto loans are actually Americans’ third highest consumer debt,” said Chris Spelt, who heads Rate Genius, a car loan platform that has a network. 150 credit institutions. “Last year, our study showed that, on average, consumers save just under $ 1,000 per year by refinancing their existing car loans.”

You can use other similar platforms or contact banks and credit unions yourself for refinancing. Just be sure to look around and compare the rates.

Speltz said that no matter where you go, the process is fairly straightforward and the fees for refinancing make the money profitable.

“It’s not that complicated and not as much paperwork compared to a home loan, so there aren’t all of those fees associated with registering your mortgage and all kinds of stuff. The fees are very manageable, usually $ 100 to $ 200, ”he said.

Speltz said the pandemic has helped increase your chances of being able to get approval for refinancing.

“Last year with a pandemic, because new car manufacturing and new car sales declined dramatically, especially when some of the manufacturing companies stopped manufacturing at the start of the pandemic, the value of used cars increased about 15%, 17%, 18% last year, which made it easier to refinance because your car was more valuable, ”Spelled said.
This is exactly what happened with the masons.

“If you have the option, I would do it 100%,” Mason said. “It’s super easy.”

There are tips to follow before trying to refinance:

  • Make sure you pay off your current car loan on time, consistently. This will improve your credit score.
  • The less you owe on your car, relative to its value, makes you attractive to lenders.
  • And an automobile less than 8 years old is considered a good candidate.
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