Auto Finance's Best Kept Secret? Refinancing: Top Seven Questions to Ask's experts provide guidance to help car owners determine if refinancing is right for them - and what to know before applying

Jun 04, 2012, 08:30 ET from

IRVINE, Calif., June 4, 2012 /PRNewswire/ -- ( today released the second in its series of auto financing tips specifically designed to help empower car buyers with below-prime credit – this time for those who are seeking to refinance their auto loan to lower their monthly payment.

"Most people do not realize that they can keep their car, but trade in their lender to get a better loan," said CEO Jim Landy.

While many home owners are aware that they can refinance their home mortgages, many car owners are unaware of, and missing out on, a key opportunity to save extra dollars each month by refinancing their auto loans.

According to the experts at, if car owners qualify, refinancing can be done quickly, easily, securely and privately online – and can significantly reduce monthly auto payments. For example: a $30,000 new car loan originated in late 2008 with a 72-month term could have a $600 monthly payment. Today, as many consumers are holding on to their cars for longer periods, they have an opportunity to refinance the balance and reduce monthly payments – in this instance, by $200 per month or more.(1)

"We have seen a significant jump in the number of consumers successfully refinancing their auto loans; even so, it is still one of the best kept secrets in the auto finance world," continued Landy. "For car owners who purchased their vehicles when rates were much higher, or for those who did not do their homework and signed on at an exorbitant interest rate -- or for those who simply need more available cash, refinancing could make perfect sense. But it is not for everyone, which is why we have put together a list of questions to ask before starting the process."

Top Seven Questions to Ask When Refinancing Your Vehicle
If you answer yes to any of these questions, it's worth taking a look at refinancing your existing loan.

1. Have you purchased a new or used car in the last 12 to 36 months?
Today's interest rates may be lower so there are potential savings there -- and if you have improved your credit since you originally purchased the car, you could save even more.

2. Do you intend to keep your current vehicle for more than 3 years?
Refinancing could reduce monthly payments while you continue to enjoy your car. 

3. Is having several hundred dollars in extra cash flow to manage current economic challenges important to you? 
The best way to find out is to do an analysis of your monthly expenses. In some cases, a lower monthly payment could mean you pay more in the long run, but if having cash flow is important, you should explore refinancing.

4. Will your car qualify? 
With the exception of specialty collectible cars, in today's market, as long your car has less than 100,000 miles, and it is no older than 8 years old (2005), it may qualify. 

5. Will you qualify?
As long as you have been making your payment on your current auto loan, chances are good that you will be approved for refinancing. 

6. Will your existing loan qualify? 
The outstanding balance on your current loan needs to be at least $10,000 as many lenders won't qualify loans less than $10,000. The larger your outstanding balance the greater the potential savings realized if you are able to lower your interest rate.  Conversely the savings are smaller for someone with a lower loan balance.

7. Do the details of your current loan terms, i.e. interest rate, balance remaining, total payoff amount, and your monthly payment indicate that you would save if you refinanced?
Make sure you understand the details of  your current loan terms so you can compare them with your refinancing options. Many consumers fail to differentiate between the purchase price and the financing for their vehicle separately when they buy their car.   Reviewing the terms of your existing loan reveals if there are potential savings to be gained from lowering the interest rate, monthly payment or term.

If after answering any of the above questions affirmatively, you decide to apply for refinancing, here are five things you should know:

1. If you think that you can get a better loan than the one you have, you probably can. Refinancing a vehicle is a much simpler, quicker process than for your house. In fact, if you go online, it can take only a few minutes to apply – and the whole process is paperless.

2. If you purchased your car very recently, before applying for refinance, you need to make sure the title work has been registered with the DMV, which can take up to 3 months. If you were financed through the dealer, you may not know who your lender is yet, and most likely your information has not cleared registration with your state's motor vehicle department. A rule of thumb is to wait 90 days after you purchased.

3. Make sure you have all the appropriate paperwork in hand: proof of income/employment (recent pay stubs, W2s or tax returns), as well as Proof of Insurance and Proof of Identity (a valid driver's license, passport, etc.). The lender will also want to know about the car, its Vehicle Identification Number (VIN) and how many miles it has.

4. Do your homework: go online to compare the available rates, terms and payment with those of your current loan.

5. Explore doing the entire refinance process online at a reputable site where you can access direct online refinance applications, receive timely approvals and complete the whole process from the comfort and privacy of your home.

(1)The monthly payment for a $30,000 auto loan for 72 months at 13% interest is $602.22. After 36 payments, the balance would be $17,873. A new 72-month loan at 13% interest would have monthly payments of $358.78, a reduction of $243.44 per month.

About's ( management has helped hundreds of thousands of consumers with less-than-perfect credit purchase a quality, late-model vehicle. Its mission is to empower the growing ranks of below-prime new and used car shoppers by providing an anonymous time- and money-saving way to get their car loan pre-approved before they hit the dealership. Through car shoppers can apply for a new or used car loan, or lower their existing car loan payments through refinancing, from the comfort of home - and because the entire process is completed online, personal information is kept private, safe and secure. enables car shoppers to walk into the dealership with cash in pocket and their heads held high, and secure a better deal by confidently negotiating price as "cash buyers." The site also provides consumers with easy-to-use finance empowerment tools and content, such as calculators, articles, tips and advice. is led by the team that built Triad Financial, one of the largest U.S. auto finance companies, and is headquartered in Irvine, California.

Media contacts:
Melanie Webber, mWEBB Communications, (424) 603-4340,  
Angela Jacobson, mWEBB Communications, (714) 454-8776,