Hi all, this maybe a simple thing to do but i have no idea where to start.
I purchased a 07 G35S and am making 60 payments on it with a 6.99% interest.

MY friends told me to refinance it since the rates are lower now.
my question: how do i refinance? since i have never done this before, need some expertly advice.

Do i go to a bank and get a loan to pay off the car with a lower interest or do i go back to infiniti dealer and talk to them about it?

please help.

thank you.

 

Depends on what you qualify for and what the fees are. Capital One only advertises 7.2APR on refi's obviously making that route pointless. My experience w/ HSBC is they tend to deal w/ subprime 10%+ range. I'm not sure you'll get much better a deal outside of the Infiniti but that's b/c they subsidize to move the cars. Since you already have the car there's no incentive for them to refi your car.

6.99% isn't great but it's not that bad. Assuming you talk to Infiniti and actually get it down to 5.99% w/o any fees on a reasonable $30,000 note. Then you would save $14 a month for a grand total of $840 over the next 5 years. Now if there are any fees or anything, you save much less.

Also, you could always just drop some extra coin every now and then and pay the car off a few months early...thereby reducing the interest you paid.

 

Bought the 07 G35S last week. They showed me my credit score (700+) and said the best they could offer me was 6.99.
I say BS and told them with that score I can get 5.99 easily at another dealership.

Correct me if I am way off but isn't the interest already added to your payments. So if you pay extra each month, you still paying the OTD price + interest. The only difference is you don't need 60 months to pay off your loan.

 

Car note is usually simple interest and there's no pre-payment penalty. Essentially what you're doing is paying the interest rate on that month of the loan balance. What's left goes to the principle. If you make an additional payment, the money goes toward the principle and not the interest so next month when they do the interest calculation, it's based on the now reduced principle amount which reduces the amount you owe so you can save. If you pay off your car tomorrow, you only pay the interest amount for that given month...saving potentially a couple grand. This may not be the case in some financing deals if the bank comes up w/ a funky loan however.

Here's a car payoff calculator to give you an idea of the savings:
http://www.dinkytown.net/java/AutoPayoff.html

I've seen worse deals than 6.99% despite good credit. The manufacturers' financing arm interest rate is tied to how badly they want to get rid of the car and they'll subsidize to move the cars. That's why Dodge had that amazing "AND" deal a few years ago...0% for 60 mon and 0 down. Moved a lot of cars but people got crazy upside down and it was hell on depreciation.

I got 4.99% on my sedan and coupes were running a 2.99% special. I also had a CapitalOne blank check at 6.25% if dealers weren't willing to give market rates. The local Acura dealer was insane and wanted full MSRP for a TSX/6spd/NAV at the end of the year (I knew they were worth $300 over Invoice) and then he tried to play the work the monthly payment angle.

I went in knowing what I considered a reasonable payment and he was off by a solid $100/mon...so I knew something was off. Turns out he was trying to give me 8.3% despite a near 800 credit score and gave me the "you're a first time car buyer" excuse. Walked out on the spot and when I got an email from him, I emailed him back a picture of my new G.

 

I wouldn't bother with refinancing your car unless you can get at least 2 points off of your current interest.

Just becareful of the terms of the refinancing. Are they charging you a "refinancing" fee? Are they going to make you start over with 60 months on the new balance? Any other caveats? Too many variables and what-ifs to save a couple of bucks.

Hence why I wouldn't do it unless they can give you at least 2 points.

 

A majority of places will not charge a "refinancing fee". They make their money by taking in your loan and earning the interest on your loan. Also make sure that they do not have a pre-payment penalty. Having the term go back to 60 months would not necessarily be a negative. This will decrease your monthly payment amount. You can also make principal (extra) payments to payoff the loan sooner at no charge. The only negative I would see in refinancing is that they will pull a credit report, lowering your score slightly.

Also, make sure that the company you are currently financing through does not have a pre-payment penalty.

The next step is to go to different banks and credit unions (CU's usually have better rates) and shop around for rates. DO NOT submit an application at every place you go to because they will pull your credit report. Once you found the lowest rate, submit the application through them and they will take care of the rest (basically payoff the other financial institute and bring the loan over to them).

How do I know all this? I do it for a living.

Hope that answers your question. Any other questions just pm me.

Regards,
Jimmy

 

What's the best rate he could possibly get with perfect credit at this point? Making much below 6% isn't much for a financing company to live on given they have to borrow the money to finance the car as well. Reseting to 5 years after 1 year of payments will put him right back to where he was.

Some Math:
$30,000 hypothetical note
6.99% interest
No Pre-payment penalty

Original Loan:
Payment Amount: $593.89 x 6 = $3,563.37
Interest Paid after 6 months: $1,011.59
Principle Paid after 6 months: $2,551.77

Original Loan Payoff Amount = $30,000 - $2,551.77 = $27,448.23

Refinanced Loan:
Refinance to 5% for another 5 years ($517.86 monthly payment)
Payment Amount: 517.86 x 60 = $31,071.37
Interest Paid: $31,071.37 - $27,805.96 = $3,623.14

Difference:
Original Loan Interest: (60 x $593.89) - $30,000 = $5,633.67
New Loan Interest: $1,011.59 + $3,623.14 = $4,634.73
Total Savings: $5,633.67 - $4,634.73 = $998.94

So you would save a grand total of $998.94 and drag out your payments and additional 6 months. The overall interest rate would be 5.1% and I somehow doubt anyone will give you a rate that low. By the time you get to 1 year, the savings will only be around $500. Any interest rate higher than 5% will give you far less savings. You could probably save that much interest by just making a couple hundred in extra payments early on.