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Lots of people would do it just for the change in interest rate.
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But in that case, the type of debt isn't changing. You're maintaining the same level of debt and just restructuing - apples to orange IMO.
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Oh, and if the car loan gets paid off by the refi. then you're trading secured debt for different secured debt. Is that better?
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The car debt is secured by the car, a refi is secured by your
house - that is very different to me since I don't live in my car
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I think part of the key here is that Rock doesn't want to drive a junkier car.
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I don't think they're going from junky to junkier. That car must bey pretty nice. My car isn't junky and it only cost 3k. But I guess compared to what merits a $532 car payment, it might look junky next to it in the parking lot...
We're not factoring in RISK into this equation here. What if some other huge emergency happens and now their house is in jeopardy? Perhaps in this hypothetical emergency they could have still made their house payment and simply defaulted on the unsecured debt - now they're house could be taken. Would you really want to put your house on the line? We need to think of WORST case scenarios too - not just best-case. Sure, refing saves money on interest, but quantify the massive risk you are potentially taking by putting your house out there. Make an interest rate outta that and it doesn't look like such a great deal.