What is Automotive Refinancing?
Automotive refinancing is the process of taking out a new loan for your car, to pay off the original loan you had. In this way, it is a little like remortgaging a house. The difference is that it is a much easier process to refinance based on your car loan, than it is on your mortgage. There is not the same requirement for intense scrutiny into your financial details, or a long checking process to see if you can qualify. The way to think of it is in a similar way to if you were to change your energy provider, in order to take advantage of a monthly saving on your bill. You will still owe the repayments on a car loan, with interest to pay, but you may be able to get slightly better terms than you already have, allowing you to save on your outgoings. If you want to buy your vehicle outright, maybe because the lease is due to expire and you really want to keep this car, then automotive refinancing is an ideal option for you to consider.
There are many lenders to choose from, and you definitely need to shop around to see what each of them has to offer in terms of refinancing. It is also worth bearing in mind that there are some exceptions, such as the age and the remaining value of your car that might limit your eligibility for a new loan. You would need to check with the lender in question if your circumstances exclude you from their automotive refinancing options.
Automotive refinancing is not necessarily the best option for everyone, but if your credit has improved, or if you were to become aware that the original loan you took out for your car was not actually the best deal you could have found, then it is well worth you researching the refinancing options that are available to you, and investigating whether or not automotive refinancing can be the answer to help you out of a tight spot, or if it can just assist you in a belt-tightening process.