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I bought a car 2 years ago soon after college. My credit at that point wasn't that great (I had most of my cards maxed out at that point), it was close but I got the loan. The interest rate was pretty bad for a car loan ~12%. I now have pretty good credit although Im not happy dancing yet:
8K left on CC (finally 10% interest down from 14% and 16%)
10k on car (12% interest)
20K in school loans (6-8% interest).

It seems silly to me that my CC debt is a lower interest than my car loan. And to be strictly Foolish I would pay down the car first since it has a higher interest rate. However like most people (with reason!) Im pretty anti-CC and prefer to get rid of it first.

I've heard of people refinancing houses when the interest rates drop. I've also called CC companies to get them to lower the interest rates and its worked in many cases.

So my question is (yup its in here somewhere):
Can I refinance my car loan? If so, how do I go about it?

My loan is with Ford Credit (but the car is a Jeep Wrangler). I have a little less than 3 years left on the loan (5 year plan) but I planned on paying more than the minimum after the CC is gone.

(Well that was longer than it needed to be.. sorry)
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Yes, you can refinance your loan (and now is a great time to do it) - just make sure:

There are no or very minimal fees involved in doing it.
You don't end up on refinancing the car again over 60 months. If you have about 3 years left now. Make sure that you finance it over 36 months.
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Thanks for the quick reply. It sounds like something I want to do.

Do I simply call Ford Credit and ask to refinance or do I have to go somewhere else and they will buy? the loan?
I really like Ford Credit's online bill pay.

If I contact Ford Credit, what advantage do they have of refinancing over the same time period? In other words, why would they want to do it?

(Sorry to be such a dunce... Im pretty decent at playing the CC game because your setting one CC company vs another, but secured loans baffle me)
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Call Ford Credit and point out what a good fellow you
have been for the past 2 years, paying on time, etc.
Ask what they can do to lower your interest rate, now
that interest rates are lower.

Point out that you have unsecured credit at a lower
rate than your car loan, and that if they can't help you
you will be paying off the car loan fairly quickly;
therefore, they will make more money from you if they
can lower the rate and thus decrease your will to pay
it off early.
If that doesn't work, check with your credit union,
and your bank, in that order.

The reason you'd rather pay off the credit cards is
that we don't trust credit card companies; they can raise
your rates in a flash for no good reason "just because
they can". Your auto loan is at a rate fixed for the
life of the loan. Clearly there is a point at which
you'd rather take your chances on credit card companies
raising rates and get rid of the higher interest loan first.
Exactly where that point is, your choice.
Good luck! Chris
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Great! Thanks for the help.

You're right, there is that point where the difference between the two is great enough such that I would throw caution to the wind and pay off the car loan before the CC. I don't think 2% is enough of a difference to chance it. But I suppose the car loan company wouldnt have to know.

Ill give refinancing a shot and post how it comes out.

Thanks again.
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conick,

I posted about this a few weeks back. Here's the link to my original post:

http://boards.fool.com/Message.asp?mid=14842733

Good luck!
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I dont know how I missed that thread in my search. Thanks for pointing it out!

What happened? Did Toyota beat/meet the peoplefirst offer?
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What happened? Did Toyota beat/meet the peoplefirst offer?

No. When I called them up to negotiate, I was put on hold for 15 minutes, so I finally gave up. When I sent in the check to pay off the loan, I explained what I was doing and told them that if they wanted to beat PeopleFirst and keep our business, they were free to call me to discuss it. We just received our "paid in full" letter from Toyota and "welcome!" letter from PeopleFirst, so I guess Toyota was happy to lose our business.

Funny, because when we originally negotiated our loan with Toyota about a year ago (it was a lease buyout -- never again will I lease or finance a car), we used PeopleFirst's rate as a negotiating tool -- Toyota was willing to match it then.

Just remember to refinance for the same period of time that you currently are financing for -- in other words, if you've got 48 months left on your current loan, don't refi for longer than 48 months. Otherwise, you'll probably pay more in the long run.
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You can refiance a car loan. You can check out e-loan.com. I just refianced my car to add a little more to the snowball. Two problems with refiancing cars 1. Interest Rate don't really effect the payment a great deal 10-20 bucks 2. Older cars aka not new don't get as good of interest rates as brand new. Your car being less then 3 years old so you can still get some good rates.
Erick
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I used the peoplefirst calculator and came up with:
Payoff Amt: $10,372
Months left: 36
PeopleFirst: 7.75% - 323.83/mo - 11657.73 total
FordCredit: 12.00% - 344.50/mo - 12401.96 total
~$20 less per month and ~$800 less total sounds good to me.

I dont plan on paying that large total since I will pay it off early.

However, the peoplefirst website says you need "excellent credit" to be considered. I have far from excellent credit but it doesnt hurt too much to give it a shot. If I don't qualify I can at least get a free credit report out of the deal and Im not concerned too much about multiple credit checks lowering my fico score.

If I do qualify I have a nice bargaining chip to use. Either way I should know today.

Thanks for everyone's help. Ill let you know what happens.
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Hi
We called Ford Credit and they said that they do not refinance car loans, so we checked out a credit union. We refinanced at 7.5% with Associated & Federal.
Good luck
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Yup, I found out that too today.

I got accepted by www.peoplefirst.com and FordCredit will receive a check for the full amount next week. Their loss I guess.

I told a friend of mine today that I refinanced my car at 7.75% and he just about flipped. I'm pondering whether I should tell him where I get my "Foolish" information or keeping it to myself and being the GURU for awhile. I suppose I'll let him in on it. :D Maybe I'll make him beg a little first.

Thanks for all the information.
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Wow Conick! That's awesome!! You just saved $800 because someone you've never met pointed you in the right direction.

Isn't the internet awesome sometimes?

Congrats on your car loan. That's terrific news.

Karen
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I hope jthrelkeld isn't expecting a check! :D
Thanks again for everyone's help. I've learned a lot in just a few short days.

It's great to be able to talk and read about people who are in the same boat that I am in and paddling like the dickens to get above water. (how many cliche's is that? hehe)
Most of the people I know in person are:
a) In major debt and don't seem to care (Im trying to turn these around)
b) Never had any debt at all due to family help (dont you hate 'em ;))

Thanks to reading this board I can now say that I've gotten my interest rates down to the best I possibly can and now I will continue to attack them with a vengeance!


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