Refinancing a car is when you get a new loan to finance the same car that was just paid off. for example, if you have a balance of $20,000 on your card and it's been in good standings with no late payments for 2 years, your bank might let you take out a loan for another $30,000 so that you can buy something else.
in this case the bank will use whichever aspect of the current account history to decide whether or not they'll approve you for additional credit. in other words, because they know you've maintained good credit up until now and have no bad credit history they're going to take into consideration that getting approved will probably be easier than if someone who has previously had trouble
what is the point of refinancing a car?
many people don't know the answer to this question, but refinancing a car can be one of the smartest financial decisions you can make. for example, let's say you find out that your mechanic has done $2000 worth of work on your car so far this year- and now because tariffs are skyrocketing from china, there is no way he will be able to do more for less after 2020. it may not make sense for him to invest in replacing parts with quality parts- because right now all the spare parts he needs are coming from china cheaply due to tariffs and his profit margins nosediving as a result! so instead of going home and continuing on with business as usual automagically, what if you were to
does refinancing a car hurt you?
refinancing a car is the same as extending the payment period. interest rates and such will be different, but someone who has a higher risk profile may end up paying more interest over that time even with lower monthly payments because of other factors like default rate. the decision to refinance should be weighed against these other factors and should not be made lightly based on your first glance at the numbers alone.
do you get money back when you refinance a car?
in the event that you have negative equity, you will receive a partial refund.
refinancing a car is not as simple as refinishing it. generally, when someone refinances their car they have negative equity and are seeking to improve their interest rate or term of loan. refinancing a car does not however guarantee a “refund”, though the percentage received depends on how much money one owes on their vehicle – generally those with no remaining equity will be given nothing back, those with only minor amounts of negative equity may receive up to 20% of what they initially invested in their car back (minus any outstanding balances), and those who've gone through prior refinances will generally see 10-20% refunded depending on previous
