Is it better to re-finance a car or to just buy a newer model?

1. 67

   Lady Guinevereposted 9 years ago

   Is it better to re-finance a car or to just buy a newer model?
   
   We are thinking about re-financing our car at the end of the year.  We have another car payment wrapped up in the loan.  We would like for our car payment to be less than it is and I am wondering what would be the best option.

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2. 79

   Say Yes To Lifeposted 9 years ago

   I once faced that decision when my money was really tight.  Making the payments lower meant I'd have to pay on it an additional 3 years, when I had only 18 months to go.  A friend of mine advised me to bite the bullet and get it over with.  I'm glad I took her advice - especially since the car served me well another six years after my last payment!
   The only good reason for buying a newer model is if your old car is no longer functioning well.
   Just my two cents worth.

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   1. 67

      Lady Guinevereposted 9 years agoin reply to this

      Thanks for your 2 cents.  Our 2013 Kia Soul is guarenteed to last 10+ yrs.

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   2. 79

      Say Yes To Lifeposted 9 years agoin reply to this

      The car I spoke of lasted me over 9 years. I bought it used; it was a 1995 Toyota Camry. It's the best car I ever had. It had 115,000 miles on it when I bought it; I drove it up to 355,000 miles!

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3. 60

   LoisRyan13903posted 9 years ago

   Twice I had to refinance a car and both cars needed new transmissions.  In both situations I still owed a lot of money on the cars and would have been in a more difficult financial situation.  Doing it this way allowed me to get the maintenance done and give me a lower payment even though it took me longer to pay off.  Getting the transmission work done allowed me to drive both cars for a while after the last payment was made.  Unless your car needs serious maintenance, it is best to refinance it.  Whenever you can financially, still make your original payment and get it paid off sooner.  Once you make that final payment, keep paying yourself a car payment.  Each month put whatever ypu normally pay on the car payment into your savings account.

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   1. 67

      Lady Guinevereposted 9 years agoin reply to this

      LOL what is a savings account when you have a house?  Things and repairs always come up with that.

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      LoisRyan13903posted 9 years agoin reply to this

      I know, I am always dipping into my savings.

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4. 80

   dashingscorpioposted 9 years ago

   I would never refinance a car. I always strive to payoff car loans as soon as possible. If you're a home owner it's probably best to take out a small equity home loan to purchase cars. The rates are lower.
   You also get a tax deduction on the interest of a home equity loan.
   I also tend to keep my cars for many years if there is nothing consistently wrong with them. I once had a Toyota Celica GT for 18 years. I had a 5 year loan so I went 13 years without a car payment!
   Both me and my wife currently drive cars that are over 13 years old. We invest our money in our home and have some rental properties. We also enjoy spending that money on vacations. Priorities vary.
   I have friends who have never felt what it was like to NOT have a car payment. They're always buying a new car every 5 years or less. Some even trade in cars they haven't paid off which gets bundled into their new car loan! It's hard to get ahead that way.

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   1. 67

      Lady Guinevereposted 9 years agoin reply to this

      Our car we were still paying on was bundled with this 1. Prior to that we dint have a car loan.  We have a 2013 Kia Soul.  Long story how we had a prior refi on car and not house. I wuld rather no car loan at all.

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   2. 79

      Say Yes To Lifeposted 9 years agoin reply to this

      dashingscorpio - you sound like a very wise money manager!

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      LoisRyan13903posted 9 years agoin reply to this

      I too dashing try to pay off a car loan ahead of time.  I try to pay an extra $100 a month.

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   4. 67

      Lady Guinevereposted 9 years agoin reply to this

      I try to pay everything off early.  My husband, he doesn't do that.  He pays the exact amount that is due and the day it is due.  I hate that!

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      LoisRyan13903posted 9 years agoin reply to this

      My hubby got better at that but it took a while to train him.  I would say maybe it is a man thing but I know a lot of men who are very responsible when it comes to finances

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5. 0

   Stargrrlposted 9 years ago

   It would be wiser to buy a newer model, than to refinance an old car.  Cars depreciate in value and break down over time.  They are the biggest money pits out there.  You'll be paying the money anyway, might as well be on a new car.

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   1. 67

      Lady Guinevereposted 9 years agoin reply to this

      Thak you for the answer.

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6. 60

   AJB84posted 9 years ago

   That all depends on your cars current value and how much you owe. Another important factor is how many more miles you looking to get out of it. Normally customers will refinance because they want a lower payment along with a better Apr , so to answer that question logically you would have to take a look at what you have and what you are looking to accomplish. Getting a new car will only make your payment higher though unless you owe less than the value and trade in. Which is almost never the case.

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7. 82

   peachpurpleposted 9 years ago

   buy a new model if your car is over 6 years old, mine was 8 years old before i changed to the new model, face lift twice

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