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Is it better to refinance or trade you car in?
Is it better to refinance your car or trade it in in order to save money? My car is a few years old and I still have 24 months of payments on it. I was looking at getting a new car and trading this one in, but I also might just refinance the one I have.
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Both options have their pros and cons.
- If you refinance: You can knock some interest off the loan and lower your monthly payment.
- If you trade it in: You can knock some money off the price of your new car—especially if you also provide adown payment. That said, you typically won’t get as much as you would if you sold the vehicle on your own.
If you owe more money on the car than it’s worth, you probably won’t be able to refinance. In addition, you won’t get enough money to pay off the remaining part of the loan, which means the old car’s loan balance will get rolled over into the new loan.
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- Gregory R.
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