(From The Detroit Free Press)
Going out to buy a new or used car later this summer? Ever imagine that you might want to refinance that car loan soon after you buy a car?
Most of us only think about refinancing when it comes to a mortgage. But credit unions and banks will give you a chance for a re-do on a car loan, too.
Maybe, you didn’t shop around for a car loan — as you should — before you headed to the car lot.
Maybe, your credit isn’t great and you’re stuck with a double-digit rate on a car loan and wondering if, somehow you’d be able to save some money.
Maybe, you’re kicking yourself now and wondering why you didn’t take a second look car loan rates on your own before agreeing to a loan at the dealership.
On average, consumers saved $52 a month by refinancing car loans when they wanted to reduce their payments, according to a TransUnion study of 1.5 million refinanced car loans in 2013 and 2014.
On average, consumers reduced the interest rate by 2.4 percent.
The average monthly payment for an auto loan is between $500 to $525 — meaning some could save roughly 10 percent a month.
Never heard of anyone refinancing a car loan?
You’re not alone.
Many times, you’re not going to know about re-fi options unless a lender is pitching you a program — and many lenders aren’t running big TV ads for these deals.
TransUnion’s research indicated that nearly two-thirds of major lenders offer refinancing programs for auto loans. But many times you cannot spot such offers easily online, said Brian Landau, senior vice president and automotive business leader at TransUnion, which reviewed information on 1.5 million refinanced auto loans originated in 2013 and 2014.
Sometimes, Landau said there’s been a reluctance to go after another lender’s customers when it comes to car loans. Car loans, after all, are far smaller than a home mortgage. Some lenders are wary of breaking unwritten rules that could harm relationships with car dealers who are at the front lines of making car loans.