The processes of refinancing your car or trading it in both have wonderful benefits. You're more likely to reap the benefits if you refinance or trade-in under optimal circumstances. Our team at Rex Perry Autoplex in Nacogdoches, TX offers the following explanation and tips.
Refinancing your car is the same as applying for a new loan on a car that you currently own and want to keep. Most people refinance when their credit improves. Lenders prefer that you refinance after at least six months to one year of making on-time payments consistently. Refinancing and applying for a new loan often comes with the benefits of:
- A lower interest rate
- A lower APR
- Shorter or longer loan terms
- A lower overall monthly payment
It's best to trade in your vehicle when you're ready to purchase and drive another vehicle, used or new. Trading it in allows you to apply its positive equity to the cost of your next vehicle. Trade-in value is more of a special dealer 'store' credit or allowance. It varies by make, model, year, and vehicle condition.