Should I refinance auto loan? |
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wealthstudent
Member
Cash: $ 4.25
Posts: 20
Joined: 07 Dec 2012
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Should I refinance auto loan? |
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Hi,
I have a car loan with the following details:
Current Balance: $16,866.65
APR: 6.17%
Term: 60 months
Loan Start Date: 10/21/11
Should I refinance? This would be the second time I refinance since I bought the car new.
Thanks.
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Wed Apr 24, 2013 5:26 pm |
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oldguy
Senior Member
Cash: $ 751.85
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Joined: 21 May 2006
Location: arizona |
Yeah - if you can get a <5% longterm loan, I would take it.
Two schools of thought - some people hate loans of any kind, and especially hate car loans because of the stereotype of IQ-challenged dolts driving new Cadalacs. And because cars depreciate and put you upsidedown in the loan. And becasue some folks just blow the money.
I pay little attention to that - to me it is just a way to get a <5% longterm loan, in my mind I dissociate with the car, it's just a loan that I have to manage - and I use the money elsewhere to earn more money.
Given your demonstrated ability to manage - ie, an income in the top quintile, a $130k fund, and a plan to buy a house in SoCal - I would fully liquidate the car and put that capital to better use.
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Wed Apr 24, 2013 6:31 pm |
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wealthstudent
Member
Cash: $ 4.25
Posts: 20
Joined: 07 Dec 2012
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Thank you for the comments. I think I should've bought a used car and saved a little more money to buy it with less of a loan. It's hard to see myself or my wife without cars since we live in Los Angeles.
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Sun Apr 28, 2013 4:43 am |
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oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona |
quote: I think I should've bought a used car and saved a little more money to buy it with less of a loan.
Maybe a used car would have been better at the time - but that was 2 yrs ago, now you have a used car.
But IMO you are missing the point - the size of the loan has little to do with the cost of owning a car. Late model cars deprecioate at about $4000/yr, that is most of the cost-of-ownership. The interest on a loan is a small cost, eg, the cost of a $16,000 4% loan is $480/yr, that adds a bit to the $4000/yr but it's not the big cost. In fact, if you borrow the $16k at 4% and invest it at 10%, the 6% is profit, you would be making money on the loan.
Like I said - I woulld take all of the equity out of the car (refi it) and invest the money elsewhere.
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Sun Apr 28, 2013 4:16 pm |
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Montgomery
New Poster
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Joined: 30 Apr 2013
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Flashy animations that don't benefit your customers or add to your content, are not what your customers are looking for. In fact, it will probably just drive them away.
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Tue Apr 30, 2013 6:41 am |
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Robinmarsh321
New Poster
Cash: $ 0.40
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Joined: 06 May 2013
Location: australia |
I'm no economic expert, I'm sure more knowledgeable people will chime in soon, but I don't think there will be enough of a direct effect from the rate
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Mon May 06, 2013 10:14 am |
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