After a year that caused many to have little to no need for driving, 2022 is looking to be a good year to get back on the road. Whether you’re looking for a new car or to reduce the monthly payments on your current vehicle, understanding the art of refinancing can save you a lot of money.
If you’re thinking about getting a new vehicle, have you decided to buy it or lease it? Buying a used car and keeping it after it’s paid off may be the most cost-effective option. But what if you’re looking to have the features of a brand-new car?
Maybe you’re trying to reduce your monthly payments to save some money. Is there a way you can refinance your current vehicle? There are many factors to consider when deciding if refinancing is the right choice for you. We have compiled a list of useful articles to help answer all of your questions.
Which Is Better – Buy or Lease?
Buying vs. leasing is an ongoing debate with no certain answer. Deciding if buying or leasing is better for you will depend on your financial preferences and driving needs.
There are advantages and disadvantages to both choices. Buying a vehicle means you will own the car at the end of the payment plan. But this also means you’ll likely have to commit to higher monthly payments. While leasing is considered cheaper, you may be restricted to mileage limits. You may also be charged for wear and tear at the end of your lease.
Our advice is to consider the primary use of the car, how much you’ll be able to afford every month, the amount of driving you need to do, and if you might want a newer model in the next few years. Interest rates were considerably lower in 2021, which made auto financing popular. Check with various banks and lending partners to find the best deal for you.
Why Was Auto Financing Popular in 2021?
There are many reasons why auto financing was so popular in 2021. One of which includes car manufacturers’ desperation to recover from a downward decline in sales in 2021. The shortage of semiconductor chips for 2021 models also meant less inventory for some dealerships. Now that the market is getting back to normal, you may be able to find great deals on 2020 models.
These factors led to low-interest rates, making it the perfect time for customers to take out a loan. While there’s no telling if this trend will continue into 2022, jumping on it now is a great way to ensure your monthly payments are manageable.
Tips on Refinancing
If you took out a loan to pay for your car, there are ways you can re-evaluate it to see if you can save some money. Refinancing makes sense if your credit rate has improved or you need to reduce your financial commitments.
Refinancing an auto loan is taking a new loan to pay off the balance of your existing loan. The new auto loan can potentially provide better interest rates and lower monthly payments. Refinancing is an easy process, provided you have all the information required. These may include details of your current loan, your vehicle’s VIN and accident history, and documentation of your ability to pay, such as a tax return.
You can also consider refinancing your auto loan with the same lender. While you’re free to shop around, some lenders may charge a penalty for paying off a loan too early. If that happens, you can always ask about refinancing with your current lender and compare the penalty price to the amount you’ll save from a new auto loan.
How Soon Can You Refinance Your Car Loan?
Most auto loans last up to nine years for new vehicles and up to six years for used vehicles. If you’re considering refinancing your auto loan, you may be wondering if there’s a wait time after the loan has been approved.
Though there isn’t a set time on how soon you can refinance a car loan, it’s advisable to wait until the title on your vehicle has properly transferred, which can take anywhere from 60 to 90 days.
You can tidy up your credit score and gather your personal and financial information during this time. Start shopping around for the best loan terms with the lowest interest rates. If your credit history or debt-to-income ratio was the reason your initial loan was refused or delayed, you might want to consider getting a co-signer for the new loan.
Where to Find the Best Auto Refinance Rates?
Searching for the best auto refinance rates is not difficult. Most, if not all, financial institutions offer auto loan refinance services. These include credit unions, banks, market lenders, and direct lenders. Refinancing your loan could save you thousands of dollars, so it is beneficial to do your research and consider each lender carefully to find the best auto refinance rates.
You can start by approaching your bank to see if they can offer you a better deal for being a customer. Get quotes from several lenders and consider the APR and the length of the loan. Search the internet for reviews and lenders who may not physically be in your area but serve customers nationwide.
Tips On Buying Out a Lease
If you like the current vehicle you’re leasing, you may be wondering if you can keep it by buying out a lease. This is an easy process if your lease contract allows it at the end of the term, which is the most common time to arrange for a buyout.
Some contracts provide an early buyout option before the end of the term. This option may include certain stipulations and additional fees, so it’s best to read your contract or speak to the leasing company before deciding.
Before applying for a lease buyout loan, consider factors like the vehicle’s current market value, the interest rate you may be approved for, and if it will save you money in the long run. If you put more miles and wear and tear on the vehicle than allowed in the lease, then a buyout would make sense.
However, if you aren’t willing to increase your monthly payment or the vehicle’s current market value is lower than the residual value, you may be paying more than the car is worth. In this case, a buyout would not be your best choice. A quick online search to determine the market value can help you determine if that is the case.
How Vantage Finance Can Help Finance Your Next Car
If you’ve decided that refinancing is the best option for you, Vantage Finance is ready to help you take the next step. We are a virtual finance company with expertise in refinancing auto loans. We’ve helped many customers search for lower insurance premiums and interest rates on their existing vehicles, resulting in significant savings each month.
We’ve also helped customers connect with reputable lenders to buy out their current lease. You can start your journey by using our online loan payment tool to calculate potential loan payments or get in touch with us for a quote.
Want to see if Vantage Finance can help lower your monthly auto loan payment? Get in touch with us today, and we’ll connect you to reputable lenders who can help you.
