Houston - That car or truck in your driveway could save you money.
As used car prices are up 40% over last year, many people have considered selling their cars. But what many may not consider is that refinancing the vehicle could save money.
The latest survey from RateGenius.com found in September its borrowers saved an average of $102 a month through refinancing an auto loan, with an average rate of 5.38%, the lowest of the year.
"On average, over the last couple of months, consumers have been saving over $100 per month. You add that up, that’s over $1200 a year," said Chris Brown, co-founder of RateGenius.
Brown says conditions are ripe to refinance.
"Auto values are really high right now because of the supply problems for new cars," said Brown. "So the value of used vehicles has gone up like 40% + over the last year and a half."
Plus consumer credit scores are up, interest rates are down, and lenders and lending.
"We’ve seen approvals go up over 60% year over year," he said.
Here are the general criteria to qualify for auto refinancing:
"Typically lenders don’t want to refinance on vehicles that are more than 10 to 12 years old, that have more than 120,000 miles on them," explained Brown. "They want vehicles that are used for personal use, not commercial use."
He says you'll need to still owe at least $8000 on the vehicle, and have made, at least, the last few payments on time.
Brown says some lenders will even finance more than the car's value, adding funds that could be used to pay off other, higher interest debts or expenses.
"Lenders will lend up to 120% of the car's value," said Brown.
Some refinancing options also let borrowers skip a payment so they have more money for the holidays.
Here are links to sites that can help you compare auto refinancing loans, including MotoRefi, which just started offering auto insurance along with refinancing.