Car Refinance Rates

Written by Jeremy Horelick
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More than anything else, it's the the rates you find on refinancing deals that will determine whether or not now is the right time to take the plunge. Just because you qualify for refinancing doesn't necessarily mean it's smart to do so. You may, for example, find a rate that's one or two points lower than you're currently paying. Wait another week or two, however, and you may discover that rates have fallen even further.

Once you've locked yourself into a new rate, it can be a real headache to have to shuffle all the paperwork involved in refinancing yet again. The best way to avoid this is to a) keep a close watch on the prime rate, and b) continue shopping even after you've found a few good bargains. As far as the first step is concerned, understand that not all car refinancing rates will follow prime exactly. Still, the prime rate is usually a solid benchmark for what lenders are offering in general.

Refinance and Save

It's often not until consumers see the numbers laid out that they realize how foolish they'd be not to refinance their cars or trucks. Consider that the term of a typical car loan is four or five years. Sure, there are those who will take out one-year loans, just as there are those who take out 10,000-dollar mortgages. For the most part, though, it's safe to say a 60-month loan is par for the course.

A single point's worth of difference on your rate will save you roughly 500 dollars on a 15,000-dollar automobile, which is considerable. Now figure that many buyers get encouraged into accepting 20- to 25-percent rates, when they could just as easily qualify for a 15-percent APR. Multiply those 10 points of difference by 500 dollars a point and you've got 5,000 dollars worth of savings over the life of your loan.

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