Auto Refinace Loan Question

[robcg]

Hi,

I currently have two car loans and I would like to refinance one of them.

One loan is at $33,053 for a 2007 car. The other is at $25,943 for a 2006 car.

Is it safe to assume that I would have a better chance at getting the $25k loan approved (older car) than the other loan?

thanks!

- robert

[sweeps]

Depends on your credit worthiness of course, but also the actual value of the cars in question. If you're trying to get a $25K loan for a car that is only worth $15K, for example, you're probably not going to get the loan.

[maat55]

Why do you feel the need to have near 60,000 in car debt. If I woke up with that much auto debt, I'd cry like a baby. Refinance, how about selllllllllllllllllllllllllllllllll.

[Scanner]

Wait a minute. . .let's not jump to conclusions as I have been accused of here.

He could make $200,000/year. . .but then again. . .if he did. . .why would he need $60,000 in auto debt?

Hi,

I currently have two car loans and I would like to refinance one of them.

One loan is at $33,053 for a 2007 car. The other is at $25,943 for a 2006 car.

Is it safe to assume that I would have a better chance at getting the $25k loan approved (older car) than the other loan?

thanks!

Anyway. . .I don't think the approval stems so much on the car age as someone notes your credit worthiness, income, and assets. The difference between 2006 and 2007 is minimal.

What you more want to look at is the term of the loans.

If the 2006 is a 3 year term, I wouldn't refinance it at all. If it's a 5 year. . .it may be beneficial.

[maat55]

You seem to put a lot of importance on what you drive. I hope you have a large income to support this fettish for expensive autos that loose value dramatically. You could send your kids to college on what you are throwing away on these cars. This has nothing to do with your question I know, but someone had to say it. I pay cash for cars, but a good rule of thumb is, if you can't afford to pay it off in three years you shouldn't buy it. Just food for thought.

[disneysteve]

I think sweeps is right. What matters is the current value of the cars. Keep in mind that most new cars lose 20-30% of their value in the first year or so. Depending on how large your downpayments were, you may find that you are upside down on both of those loans and refinancing may not be an option.

For example, let's say that 2007 car was $38,000 new. It's current value, assuming 20% depreciation, would be about $30,400 now, but you owe over $33,000.

I think you need to look at the current values. Then, as Scanner alluded to, you need to look at the remaining terms and run the numbers to see how much you would actually save by refinancing. It might not be worth it.