I checked history on my checking account a year ago the fee to get the title is $4. I also would need to get a new gap policy which would be $399.00.So the cost to refinance is $403, not 'free'.You still don't say how much you are planning on paying each month or 2 week pay period, but you will realize the highest savings in total interst by letting the Sunwest loan run for the entire 60 months. In order to compare apples to apples, I will assume that you will pay enough on the AZ Federal loan to pay it off in the same 60 months.Your current balance is $15,248.24.To pay off the current balance on the AZ Federal loan in 60 months, it will take 59 monthly payments of $279.04 and a final payment of $278.77, for a total cost of $16,742.13To pay that balance, the Sunwest loan (60 month biweekly) would require 129 payments every 2 weeks of $127.91, with a final payment of $127.18, for a loan cost of $16,627.57 So the savings for the lower interest over 60 months would be $114.56 However, add in the $403 in costs for the gap insurance and title fee, and the refinance will actually cost you $288.44 more vs. paying off the current loan in the same 60 month timeframe. Please note, this analysis assumes that you pay the gap insurance up front. I suspect that most people increase the loan amount to pay for the gap insurance. If you finance the gap insurance into the loan, and only pay the $4 fee for the new title up front, your biweekly payments increase to $131.26, with a final payment of $130.06. The total cost for this refinanced loan, including the title fee, will be $17,066.60 - so the refinance would cost you $324.47 more than paying off the current loan in 60 months.If you plan on making extra payments to pay the loans off in less than 60 months, the savings on interest for the lower rate loan decrease. With savings in interest decreased, the refinance would end up costing you even more than your current loan.So, with the costs that you have provided, refinancing your car loan would actually cost you money, which would indicate that you shouldn't refinance now. The biggest issue is the cost of the gap insurance. If you can wait until you pay down the loan enough so that gap insurance isn't required, and the only cost will be the $4 title fee, then refinancing to a 3.49% loan would save you money.AJ
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