So me and my wife have tossed around the idea of refinancing the IS and putting another 10k towards the car in the process. This would reset our term but lower the monthly payment by 110 a month.

I guess my question would be assuming the rate wont change would you do this? We currently don't have much issue paying for the car, but she wants to lower the payment, with the thought we might be better off if someone looses a job etc.

Personal reasons aside, would this make financial sense? I am thinking the money might be better used in other ways.

 

If you have 10k to put down again to refinance, why not just pay extra every month and pay it off early? I wouldnt refinance and stretch out the loan term more months/year (and be "down 10k"), I'd try to just pay it off early (but i guess you dont want higher payments...).

 

+1. If you can pay it off early.

 

always pay off early, then invest in other stuff for the car. just my opinion.

 

Got it, put as much as possible towards the principal save the extra money for better opportunity's or toys

 

As you explore refinancing, check out PenFed Credit Union. Easy to join on line, simple application. They offer auto refinance at 1.49% for up to 60 months. You can pick loan length term and get a low rate.

 

Exactly my thoughts.

 

You could put 10K straight towards the principal if you like. Why would you refinance it.
Unless you are also getting a much lower interest rate in doing so.

For example, I could have paid cash, but I got 1.9% financing.
So theoretically, I got a loan to play in the market for that amount at only 1.9%.

 

In addition most auto loans have upfront interest regardless of when you complete the loan, so while te rate stays the same, you might be paying interest on interest. If you have no issue making the payments financially it makes more sense to just pay it as is, to term giving you control of your cash.