Hi all, i think we got swindled at the used car dealer today. We bought a used car and financed about $8K at 8.99% APR for 48 months. This seems like too much… my spouse and i have near-perfect credit, so why such a lousy rate? Can we try to refinance even though we just bought the car this weekend? Will that lower our credit rating?
Thanks!
i did think it was too high and asked about it. Then asked for a better rate, but the finance person said it was because of the age/mileage on the car. That’s not correct, is it? (Our first time financing… 
)
Thanks! i have to call our insurance tomorrow to add on the car, and they also have a credit union, so maybe they can offer us some advice!
Thanks, everybody. We actually didn’t have to refinance because we acted quickly enough that the dealership hadn’t even sent the paperwork to the bank. We went through a credit union and got a rate of 5%. Saving over $1000 ! Woo-hoo!
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You may get a temporary hit due to the enquiries from shopping around, however in the end refinancing will not significantly affect your credit score.
How did you get swindled? Didn’t you look at the interest rate before you signed the loan?
You can refinance it but the institution that is refinancing your vehicle typically needs the title before they will give your dealer a check to take over the loan. I would wait at least a week and shop around for rates before working any paper work up. Credit Unions are usually better for rates.
Actually the age of the car does make a difference as to what interest rate. Older used cars have higher rates than new cars or late model use cards.
Check with your credit union and see what kind of rates they offer. You should be able to do that before you ever apply or they run your credit. You might find the rate isn’t as bad as you think.
In the future, the smart way to buy a car is to get pre-approved for a car loan before you look. Not only will you know exactly what kind of interest rate you’ll have, but you’ll be able to negotiate a better price on the car when you have your own financing in hand.
Age, miles, term of loan and loan to value are all non credit related factors that affect what rate you receive. In the case of a higher mile older car a credit union is almost always the best option. Many credit unions don’t have mileage caps and those that do tend to set them pretty high at 100,000 miles.
Most credit unions are credit score driven and won’t adjust the rate solely based on the age and miles. They may have a slight increase between their new car rates and used car rates, but they are set up different than banks.
Refinancing is very easy to do, but in your situation you are probably not going to save a lot of money. You are not financing very much and it’s not a long loan. In addition, 8.99% might (I stress might) be able to be lowered to 6% on an older higher mile car, which won’t translate to much in savings.
Hope this helps…