Refinancing vs. Trading in Your Car

If you have had a financial loss recently, then your car payment may start to wear down your savings. When you have trouble paying on your car loan, there are options to avoid repossession. Since paying on your car late or even going through a voluntary repossession can hurt your credit, you should look at options for trade-in value or refinancing before doing so. When you trade in your vehicle, a dealer looks at the value and pays off your loan while placing you in a new car with a lower monthly payment.

With refinancing, you can change your loan terms so that the monthly payment falls within your budget. Typically, this means that the lender lowers the interest rate or changes the loan terms, possibly extending the loan terms for another 12 to 24 months. When this happens, your monthly payment may be lower, but you could wind up paying more in interest.

It’s important to know all of your options and see the vehicles available for trade-in. You could get into a nicer vehicle with a lower payment depending on when you purchased your current vehicle. To see all of your options and find the best deal, stop by Jubilee Mitsubishi located in beautiful Waco, TX.

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