There are certain situations you should look out for because there are the ideal moments when you should consider refinancing a car loan. Sometimes, refinancing just makes sense and you have to know when that is so that you don’t miss out and know when to act.
If you’re not sure which situations are considered ideal, here is a breakdown:
- If you see that interest rates are dropping, it may be time to act. Interest rates are always rising or falling, so you need to keep an eye out for any reductions that may appear, because the chances are that at one point or another a drop will occur and you want to act fast when it does.
- If you went through your dealer to receive financing, you might be paying a higher interest rate than others because of a dealer markup. Dealers have agreements with their preferred lenders who charge higher interest rates and send the dealership a kickback. Look around for other rates that are being offered by banks or private lenders to see if you can get a lower rate if you refinance your car loan with them. It never hurts to compare!
- If your credit score has improved since you took out your current car loan, you may be eligible for better rates. Customers with a good credit score often receive far better rates than those with poor credit because they are considered an ideal candidate for a loan and present no risks. If you’ve worked hard to improve your credit score, check to see if refinancing will mean a better interest rate, resulting in more savings.
- If your lease is coming to an end and you want to buy the car, refinancing may help. Take the time to calculate all of the costs associated to this option to see if buying the car makes more sense than extending the lease.
- You never know when financial trouble will hit, so if you run into a problem and require lower monthly payments, refinancing your car loan can reduce your payments and extend the term by increasing the number of months. This would allow you to have a lower monthly payment, but remember that in the long run, you will probably end up paying more once you’ve factored in all the rates and costs.
Whatever your situation may be, Canada Wide Vehicle Finance will help you get a car loan so that you can drive the vehicle that is to your liking. They can go over all of the details with you and discuss the different aspects of refinancing if that is an option you would like to consider. Don’t hesitate and give us a call today!