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."

Answer provided by
avatar
Eric Schad
Answered on Jul 28, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
“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 a down payment–although you won’t get as much as if you sold the vehicle on your own.
Another important thing to note is whether or not you’re upside down on your car loan.
If you’re upside down on the loan, 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.”
thumb-up

Did this answer help you?

Ask us a question by email and we will respond within a few days.
thumb-up

Have a different question?

You can meet us at our office and discuss the details of your question.

Easiest way to compare and buy car insurance

√
No long forms
√
No spam or unwanted phone calls
√
Quotes from top insurance companies