When refinancing a used auto, it is important to understand the process of how a refinancing deal is put together, and the various factors that affect the rate that is charged by the new lender.
Because it is a used auto, people assume that the refinance rates are likely to be higher, whereas refinancing any car loan is a mixture of two or three main factors. First and most important one is the credit score and credit report of the individual who is refinancing the loan.
That credit report and subsequent credit score may have changed since the original loans taken out, either for better or worse, and this will have a knock-on effect on whatever loan rate is charged for the refinancing deal.
Best Used Auto Refinance Rates
The other factor is that it is a used auto. For some lenders the specs a difference, based on the fact that statistically people who buy used autos are not deemed to be as good credit risks as people who buy new ones, which obviously isn’t necessarily true but statistics can be used in many different ways.
The other factor with a used auto is that it can be harder to establish its true value, depending on the car or truck, how old it is, it’s age and mileage. As any loan is effectively secured against the car, establishing its value and what it is worth can be a key element of the whole refinancing package.
It is a bit of a cliche but is true, that getting the best used auto refinance rates is about shopping around different lenders, and making sure you can compare them on a like-for-like basis.
Some people believe that the best credit terms can be got by going to the manufacturer direct, other people believe that lenders such as a credit union offer best deals. Like any underwriting of any risk, lenders will have their own criteria and they will differ in certain key areas.
For that reason it is worth checking different lenders and seeing what they are quoting, and on what basis it is being done.