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5 Signs Its Time to Refinance Your Auto Loan

Auto recently refinanced drives into the sunset

Drivers stand to benefit from an auto loan re-finance as much as homeowners do from a home re-fi.

Refinancing isn’t a good idea for everyone- nor is it a given because of good credit history or months of on time payments. For example, if your car is worth less than the remaining loan balance (upside down), then the lender likely won’t approve your request to refinance. You can see how much your car is currently worth by looking it up on Kelley Blue Book or AutoTrader.Com. If your auto loan isn’t upside down, you may be in luck. Here are five scenarios which could qualify you for a refinanced auto loan.

Your Credit Score Has Improved

Perhaps when you signed the loan for the car originally, you had a bad credit score and the deal you got wasn’t great. Maybe it was your first car purchase, and as such you didn’t have much credit built up. Whatever the reason, if your score has improved, there is a good chance you can refinance at a lower rate. In this scenario, it is not uncommon for consumers to be facing an interest rate that is hovering around 18%. Several months of on time payments could be enough to convince the lender you deserve a lower rate.

Interest Rates Have Decreased

If interest rates have decreased since you signed the original car loan, now could be an excellent opportunity to refinance. Don’t think it needs to be a huge difference in percentage points for it to make a difference – even just one or two percent could save you a good amount of money over the course of the loan. However, be aware that under this scenario, the new car loan will be considered the same as a used car loan – which entails a higher rate. Still, you can likely still come out ahead, and with limited fees and a simple process, there is no reason not to explore this option.

Your Lease is Expiring and you Want to Buy the Car  

Many dealerships give you the option of purchasing a leased vehicle outright after you have fulfilled the terms of the lease. When it comes to finding a lender that can help you refinance, look to Credit Unions. Many have a history in helping consumers do exactly this. Be aware that you will have to open a checking or savings account at one if you wish to do this if you aren’t a member. 

Your Financial Situation Has Changed

 Has your financial situation changed for the worse recently? If this is the case, your loan provider may be willing to work with you. While it may be difficult to lower the interest rate directly in this situation, you could be able to stretch the payment out over more months, decreasing the amount owed every month.

Your Original Loan Wasn’t Great 

Even if you had a good credit score when you agreed to the loan, it doesn’t mean you necessarily got a great deal. Perhaps you didn’t know any better and looking back you believe the rate is too high. Often, this is the case when getting the loan through a dealership instead of an outside lending institution. The higher the interest rate the dealer charges the more money they can make, which is why if you’re getting a loan through the dealer, it always pays to negotiate. If you believe this to be the case and have been making the payments constantly, you very well could qualify for a reduced interest rate on the loan.

If any of the above situations applies to you, it would be wise to consider refinancing your vehicle. Even just a few percentage points between loans could mean hundreds if not thousands of dollars saved over the course of many months. Looking for a place to get started? Check out BankRate’s Auto Loan Calculator and see how much you could save by refinancing!


Buying a Car when 72- and 84-Month Auto Loans Are the New Normal

Happy embracing couple planning their home kitchen furnishing renovation. Sketch kitchen drawing.

“The market is now comfortable in the 75-month terms.”

– Melinda Zabritski,  senior product director of automotive finance at Experian Automotive

If you haven’t bought a car in a while, you may be surprised when the car dealer explains that you can buy more car than you thought possible. It’s not a scam and a wishful-thinking salesperson. The changing nature of both cars and car buyers has prompted auto lenders to extend loan terms, bringing monthly payments down.

Those of us of a certain age will remember that in the 1970s and 1980s, a car with 100,000 miles was destined for the junk yard, a hazard no one dared to drive. While the 100,000 mile end-life of a car has been a tough perception to shake, attitudes are changing rapidly.

The Proof Is in the Power Train

Vigorous global competition among auto manufacturers has pushed automobile quality higher over the past 20 years. Today, the classified ads are full of Volvo’s, Hondas and more with 200,000 miles and cab drivers brag of getting their Toyota Prius to 600,000 miles . . . with their original batteries, no less!

Not only are cars being designed for longer life, advances in science and engineering have helped created more durable materials. Carbon finishes on parts now approach the strength of diamonds, ensuring that each part remains intact far longer. Hyundai and Kia now include 100,000-mile/10-year warranties on all of their cars’ powertrains.

Increased longevity means that a car’s value as an asset has increased. It only follows then that banks feel more comfortable lending for a longer term. The average car on the road in 1977 was 5.5. By 2014, it was 11.4, a change that indicates not only improved car quality, but a shift in the American mindset.

Pride in Long-Term Ownership

Where once, buying or leasing a new car every two years indicated success and wealth, now it just seems foolish. Conspicuous consumption has been replaced by an ethic of value and sustainability, and car buyers are looking to stretch their dollars by keeping their cars for as long as they can. Banks, therefore, not only have more confidence in the long-term value of the car, but in the trustworthiness of the buyer. Millennials are far more willing to buy a used car than their parents were.

84-month auto loan for red car with cash

Longer Auto Loan Terms Can Mean More Car for the Money

With longer loan terms, buyers are making bigger, better purchases.  The car buyer with a $300 monthly budget may be able to buy new rather than used. He or she may also choose the certified pre-owned car rather than the questionable auto obtained through private sale. While the loan will last longer, the ability to buy a better car provides more value to the buyer. Down the line, as a trade-in or sale, the car will win the buyer more cash. The average subprime loan amount as of August 2016 was $29,359 for a new car and $16,120 for a used car.These figures are up 3% and 1.3% respectively from the same time last year.

If it’s time for a new or new, used car for you, make sure to check out our loans for all credit types, even bad credit!  Those with bankruptcy still on their credit reports still can get a car loan for a used or even new car. It takes just three minutes to apply here for a new or used car loan at the lowest rates!


Will a Solar Car Finally Hit U.S. Streets in 2016?

Most solar cars only have room for one . . .

With our country’s growing awareness of our environment’s sensitivity, it’s no wonder that solar energy has been skyrocketing in popularity. Harnessing solar power makes sense, as our sun is a constant source of energy, unlike our other natural resources that risk depletion, such as fossil fuels. With this mindset, it would seem as solar cars would become a popular trendhere in the U.S. Unfortunately, no manufacturer has yet to create a viable solar family car.

Solar technology is challenging. The number of solar panels required to power a solar car inevitably creates a top-heavy vehicle that won’t pass even a basic crash test. In addition, the interior of these solar powered cars can become hot enough to endanger to the driver. Cloudy days make storage batteries unavoidable, but so far these batteries have caused the average solar car to weight too much for solar power to move it.

These setbacks haven’t stopped auto manufacturers from trying to develop the perfect solar powered car, however. In Australia, there has been a World Solar Challenge competition held every year since 1987. There, engineering schools and private companies enter their versions of the solar cars. Generally, the cars entered only have room for a driver, and no passengers, because the solar panels inevitably take up so much room.

Can “The Immortus” Be the First Widely Available Solar Car?
Picture sola
The tide may be turning, though. At the 2015 SEMA Auto Show, the largest auto show in the world, Australian manufacturer EVX, debuted its solar sedan, called “Immortus” for its ability to run forever. The sportscar not only allows two persons to ride comfortably (along with two, small carry-on bags) it provides solar energy storage. In order to avoid the tough regulations of the crash-test requirements in most countries, the Immortus won’t be mass-produced, but rather, built per order in 2016.

Up until now, the only other commercial vehicle that has been running on solar power is one produced by Organic Transit, called “ELF” (Electric, Light and Fun). This 3-wheeled bicycle/auto hybrid combines solar power with human pedaling, and can reach speeds of about 30 mph. So far, around 500 of these models have already been purchased, and although they are not safe enough for highway use, they are still legal anywhere else that bicycles can be used.

It will be interesting to see where the future of solar powered cars will take us. With our country’s ingenuity and creativeness, it’s only a matter of time before solar powered cars will soon become the norm. Maybe 2016 will be the year it finally happens … we’ll just wait and see.

No matter what your dream car is, First Financial can finance it.
Even if you have low credit scores, bad credit, poor credit, no credit or even bankruptcy, First Financial can help you finance your dream car. We are the leading American provider of bad credit auto loans, and we approve 93% of all applicants through our easy, confidential application and quick email response. We can do this with the same level security and protection as the big banks provide. So apply today! You’ll know in a day whether you qualify for up to $45,000.

First Financial

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