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The demand for trucks right now is at an all time high, so buying a truck can feel a bit overwhelming. With prices higher than ever, you want to make sure, if you're buying, you're getting a good rate on your truck loan.If you're in the market for a new truck, you might be wondering if now is a good time to buy that truck you’ve had your eye on, or if you should hold off and wait until next year. If you already have a truck, maybe you are wondering if now is a good time to refinance your truck loan. Today, we are talking all about buying a new truck, from cost to car loan APRs, to help you make the right decision.Let’s talk about buying a new truck: the costs, the rates, and how to decide if it’s the right time for you to buy.How much does a new truck cost?The price of a new truck is certainly on the rise these days. Between June 2020 and June 2021, new truck prices increased an average of 7.2% according to Kelley Blue Book. That’s a huge increase in just 12 months. According to Kayla Reynolds, an analyst at Cox Automotive, “New-vehicle affordability continues to decline as the income required to purchase the average new vehicle continues to climb. In June, for the first time in a decade, vehicle buyers were essentially paying sticker price – the manufacturer's suggested retail price – for new vehicles."According to Kelley Blue Book, a new truck now costs an average of $41,105, and full size pickup trucks tend to average out closer to $50,000. Many full size pickup trucks are out pricing luxury cars. The good news is there are still some highly rated affordable truck options on the market, including the 2022 Toyota Tacoma (starting at $26,700), the 2022 Ford Ranger (starting at $25, 500), and the 2022 Ford F-150 (starting at $29,990). Why are trucks so expensive?Why exactly are trucks so expensive right now? There are a few reasons for this, many of which have to do with the fact that pickup trucks are getting nicer and nicer as the years go on. They are no longer strictly for utility, but are instead morphing into versatile luxury rides. Here are the top reasons trucks are so expensive.Pickup trucks are becoming more luxuriousNew trucks these days are akin to luxury cars. They often have full grain leather, Wi-Fi, and touch screen infotainment. They are being used as family vehiclesPickups are getting larger and roomier, so they are quickly replacing minivans and SUVs as family car options. They now have many family friendly features built in, and their ability to double as a work truck makes them a desirable new vehicle option.They are more powerful than everAn increase in power and capability has made these pickups much more expensive. Advances in technology including turbochargers, direct injection, and aluminum body panels have increased the towing capacity and increased the horsepower tremendously. (The average truck could tow 7,000 pounds in the mid 1990s, while today the average pickup can tow 10,000 pounds) But all of these advancements come with a hefty price tag for research and development, which ultimately is passed on to the consumer.There are heavy dealer markupsSince trucks these days are so nice and in demand, dealerships mark them up much more than other types of vehicles.There are higher profit marginsManufacturers are taking advantage of this demand as well. Reuters estimates that the average full size pickup truck sold by GM brings in $17,000 of profit. This is much, much higher than the markup for a car.What are today’s auto loan rates?If you want to buy a new truck, it’s going to come with a pretty hefty price tag. But the good news is that car loan rates are still exceptionally low. So if you luck into a good deal, now is the perfect time to buy a new truck.Today's average auto loan rates depend heavily on your credit score. These are the average car loan APRs from the last quarter of 2021, as reported by Experian.Exceptional (Super Prime, 800-850): 2.47%Very good (Prime, 740-799): 3.51%Good (Near Prime, 670-739): 6.07%Fair (Subprime, 580-669): 9.41%Very poor (Deep Subprime, 300-579): 12.53%The higher your credit score is, the lower your car loan APR will be. It is always a great idea to work on increasing your credit score before applying for a car loan.How does the loan term affect loan rates?The length of your car loan will greatly affect the car loan interest rates that you are offered. You can typically find financing ranging from 24 months to 72 months, with the shorter repayment periods offering lower interest rates. But remember, the shorter the repayment period is, the higher your monthly payments will be, as there is less time to split up the total cost.With longer financing options becoming available, many people are choosing to have lower payments over a longer period of time, even if it means that their interest rates will be higher and they will be paying interest for a longer period of time. This is another reason that new truck demand is increasing: while prices are higher, financing is making it doable. If you are in a position where you can afford new truck payments, now is a great time to take advantage of the low rates. But if you are struggling to pay your bills every month, wait to pull the trigger on a new set of wheels.Should I refinance my truck loan?If you already have a truck that you are financing, it might be a great time to refinance your loan. Rates have dropped drastically in the past few years, so even if your truck is only two years old, the rates may be 3 to 4 points lower than what you are currently paying. And this can translate to hundreds if not thousands of dollars in savings. So how do you know if the time is right to refinance your car loan?If your credit score has improved since your last auto refinance or initial financing. Check your credit score and see how it compares to when you initially financed your truck. If it has increased, even if only slightly, you may qualify for a much better car loan interest rate. If the market rates have dropped since your last auto refinance or initial financing. If the market rates have dropped in general since your last financing (which they probably have in today’s economy), you may qualify for a much better car loan interest rate. If you need some breathing room in your monthly budget. Refinancing your car loan can save you money by lowering your interest rate. It also allows you to change your repayment schedule, lengthening your repayment period and thus reducing your monthly payments. This can free up a lot of money in your monthly budget.You want to add or remove a cosigner. If you want to change who is listed on the loan, you will need to refinance your loan. Since each car loan interest rate and set of terms is determined based on who is listed on the loan, you cannot simply change who is listed as the borrower.Who will refinance my truck loan?If you are looking to refinance your car loan, you have a lot of options. From traditional banks, to credit unions, to online lenders, there are seemingly endless options for refinancing.Your best bet is to use a company that specializes in auto refinance, a company like Auto Approve. Auto Approve can guide you through the refinance process, from selecting and applying to different lenders, comparing the different offers, and signing all of the necessary paperwork. Refinancing can be complicated, but when you have a partner like Auto Approve who is dedicated to making your refinance as easy as possible, it can be a breeze! And rest assured we NEVER markup the rates from lenders. We are passionate about passing those savings on to you.That’s everything you need to know about buying a new truck and refinancing your existing truck loan.If you can find a good deal on a truck, today’s rates make it a fantastic time to purchase a new truck. Interest rates will most likely increase over the next few months and years, so you should try to take advantage of the low rates while you are able. If you already have a truck that is financed, you can benefit greatly from a car loan refinance. Our customers routinely report savings of hundreds if not thousands of dollars. And Auto Approve makes it so easy to get started! Just head over to our website and fill out some basic information, and we can get you offers in minutes. So if refinancing your truck sounds like a good move for you, don’t wait any longer – get your free quote today from Auto Approve! GET A QUOTE IN 60 SECONDS

When you decide to lease a car, there are a number of things you need to consider. From the lease term to the mileage limits to the hidden fees, there is a lot to unpack. But before we get into the nitty gritty of specific lease questions, you need to ask yourself first: Is leasing a car a good idea? If any of the following apply to you, a car lease might be perfect for you.You don’t drive a lot, and don’t want to be bothered with repairs and maintenance.You want a new car every few years.You don’t want to deal with selling the car.You want to maximize tax deductions (you will be using it as a business car).Leasing a car is also great if you want to ensure you get the lowest monthly payments and want to put less money down to drive off. So if leasing a car sounds like a good solution for you, let’s talk about what questions you need to ask before you lease a car. How Long is the Car Lease?One of the biggest questions you need to ask about your car lease is the length of term. There are usually three options you have to choose from: short term (less than one year), 2-3 years, or long term (4 or more years). And there are advantages and disadvantages to all of these.Short term leasingShort term leasing of less than one year is not always an option. But it can be a good solution for you if you need a car quickly but don’t want to be tied down to anything or make a long term commitment. Certain dealers will offer leases of 3, 6, 9, or 12 months. But with these terms, the payments will be much higher than with other longer lease terms. That is because depreciation occurs most aggressively in the first year of a car’s life.2-3 year leasingTwo years is typically the shortest period that a dealer will offer. The monthly payments will be lower than a short term lease, but still will not be very low. Again, the largest amount of depreciation occurs in the first year, so the dealer needs to account for this. A three year lease will provide you with lower monthly payments than a two year lease, which is why a 3 year lease is the most popular lease term. When leasing, you want to be sure that the car’s warranty will be active for the entire length of your lease. If the warranty expires, you will be on the hook for whatever repairs are necessary. A typical car warranty will last at least 60,000 miles, which will extend the entire length of the three year lease. Long term leasingFour years is typically the longest that you can lease a car for, but you may find a rare five year lease here and there. The monthly payments will be lower the longer your lease term is, so if prioritizing low payments is your main goal, a longer lease might be the best option for you. But be sure that the warranty will cover for the length of your lease.Deciding which lease term is right for youThere are pros and cons to each lease term, so consider the following when deciding which term is best for you.What monthly payments are you comfortable making? Remember, the shorter the lease, the higher the monthly payments.Will you be leasing a business car? If the car will be used for business, you may find deals on 2-3 year leases that are lower than personal use leases.Are you comfortable making a commitment? If you don’t want to commit to anything long term but need a car now, short term leasing might be right for you.There’s a lot to consider, but most people will find that a standard 3 year lease will provide them a balance of lower monthly payments, sufficient warranty coverage, and the ability to get a new car in the not-too-distant future.How Many Miles Does The Lease of the Car Include And What Happens When I Go Over?Mileage limits are another major factor of a lease. Car leases always have a limit to the amount of miles that you can put on the car per year, typically 10,000 or 12,000 miles per year. If your mileage limit is 12,000, that’s only 1,000 miles per month. That equates to 250 miles per week, so if your commute is 25 miles one way, a car lease with this mileage restriction will not work for you.So what happens when you go over your mileage limits? Each lease will spell out a per-mile fee for which you are responsible. These fees are not meant to be penalties per say, but are meant to make up for the higher depreciation that is accruing because of the extra miles. Lower priced cars tend to have a fee of $.15 per mile, mid priced cars tend to have a fee of $.20 per mile, and high end or luxury cars tend to have a fee of $.25 to $.30 per mile. This should be spelled out in your car lease contract and is usually non-negotiable, so be sure that you are comfortable with the mileage limitations.If you do go over your mileage limits, you have a few options.Consider a lease pull ahead This is when dealers get you back in the showroom before your lease term is over. There are a number of reasons a dealership may offer this. They may want to make sure several of the same cars aren’t hitting the auction block at the same time, or maybe there is a strong demand for the current car you are leasing. But whatever the reason is, they may waive all fees if you sign a lease on a new car.Buy your leased carIf you like your current car and know that the excess mileage fees are going to add up to a lot, you should consider a car lease purchase. Auto Approve can help you finance your car lease purchase and keep you in the car you love. This way you will not be responsible for any overage fees or excess wear and tear fees, and can instead keep your car for the foreseeable future, or sell it.Try to reduce your mileage and pay the feesIf it looks like you are going to exceed your mileage limit on your car lease, you can try to minimize the damage and cut back on driving as much as possible. Try carpooling when possibleRent a car for vacations or long drivesUse public transportationConsolidate your trips as much as possible Try to incorporate some of these tips into your driving life; little changes can add up over time. If you can anticipate how many miles you will be over your lease agreement, you can begin saving for those fees.What Other Fees Does The Car Lease Have?When comparing car lease deals, you want to consider what fees you will be charged. These will vary from dealer to dealer, but commonly include the following.The Acquisition Fee. This is meant to cover the dealer's paperwork and related costs for the beginning of your lease. It can also be called a bank fee or administrative fee. It can be anywhere for $400 to $800.The Disposition Fee. This is meant to cover the expenses of returning your car at the end of the lease. It pays for the car to be cleaned and for any minor repairs that the car may need. It usually runs about $350.The Wear and Tear Fees. Check the fine print about what you may be charged for wear and tear. Slight wear is expected and factored into your monthly payments, but they will outline in your lease agreement anything that they think is excessive. Check to see what your financial responsibility will be.Some of these fees are negotiable, while some are not. It never hurts to try to get some of these fees waived, or at least try to haggle them down. If leasing a car is right for you, be sure to ask these questions before you sign on the dotted line.Leasing a car is a great option for many people and has become increasingly popular over the last decade or so. But be sure to do your research and ask the right questions before you agree to anything. One of the best parts of leasing is that if you love your car, you can always purchase it at the end of your lease term. That’s where Auto Approve comes in. Just enter some information about you and your car, and we can get you quotes for your car lease purchase in no time! So if you love your car lease and aren’t ready to say goodbye, get started with Auto Approve today!GET A QUOTE IN 60 SECONDS

If you are looking to buy a new car, there’s a good chance you will need to apply for financing. The good news is, car loan APRs are lower now than ever, making it the perfect time to buy a car or refinance your car loan.So, how do you know if you are getting a good deal or not?Today we are talking about how car loan interest is calculated and what is considered a good rate for a car loan.How does interest on a car loan work?Before we get into the specifics of today’s car loan rates, let’s talk about how car loans work and how interest gets calculated and applied. Car loans are secured loans, which means that if you default on payment, the car itself will be used as collateral.The primary factors of a car loan are the following:The principalThe interest rateThe length of repaymentThe principal that you are borrowing is the cost of the car, plus any fees and taxes, minus your down payment.Principal = Cost of Car + Fees + Taxes - Down PaymentThe interest that is charged is essentially the price of borrowing money for your loan. The car loan APR that you are offered is based on:The market ratesYour incomeYour credit scoreThe repayment termsThe interest that you are responsible for over your repayment is calculated using the following formula:Interest Cost= Principal x Car Loan Rate x Length of Loan TermThe interest due is added to the principal due and divided up over your repayment period. While your monthly payments will be the same every month, the money will be divided up between principal payments and interest payments according to an amortization schedule.How much should you put down for a car payment?When it comes to your car loan, you may be wondering “How does increasing the size of your down payment impact your auto loan?” The more money that you put down up front, the lower your monthly car payments will be. In general, it is recommended that you put 20% of the total cost down as an upfront payment. This will offset depreciation and help ensure that you never owe more on the car than the car is worth. Let’s look at an example to see how much a down payment can save you.You would like to buy a new car with a purchase price of $30,000 and you choose to not make a down payment. You have an APR of 6% and a sales tax of 6%, and you have decided on a 48 month payment period. Total Loan= Purchase Price + Sales TaxTotal Loan= $30,000 + .06 x $30,000 Total Loan= $32,330Over the life of the loan, you will pay $4,048 in interest on this balance of $31,800, ultimately paying a total of $35,848 on your $30,000 car. Your monthly payments will be about $747 per month.Now let’s look at what happens when you put a 20% down payment on a car. Total Loan = Purchase Price + Sales Tax - Down PaymentTotal Loan = $30,000+ .06 x $30,000 - $6,000Total Loan= $25,800Over the life of the loan, you will pay $3,284 in interest on this balance of $25,800, ultimately paying a total of $29,084. Your monthly payments will be about $606 per month. A down payment of 20% will save you over $700 in interest and reduce your monthly payments by over $100. On top of saving you money and lowering your monthly payments, there are other benefits to making a down payment on your new car:It might make the approval process easierIt might qualify you for special incentivesIt can offset depreciationAs you can see, making a down payment on a car can make a big difference.What is a good rate for a car loan?So what’s considered a good rate for a car loan? For that answer, let’s look at the latest State of the Auto Finance Market Report from Experian. Every quarter Experian does a deep dive into the auto industry’s consumer trends. This latest report from Quarter 4 of 2021 gives us the following car loan APR averages based on credit score.Exceptional (Super Prime, 800-850): 2.47%Very good (Prime, 740-799): 3.51%Good (Near Prime, 670-739): 6.07%Fair (Subprime, 580-669): 9.41%Very poor (Deep Subprime, 300-579): 12.53%The better your credit score is, the better car loan APR you will be offered. That is why it is so important to work on raising your credit score before you apply for financing, or before you apply to refinance your car loan.  The market rates play a large part in the car loan APR that you will be offered, and we have been seeing incredibly low interest rates over the past few years. The Fed has announced that rates will be increasing as the year goes on, so now is the perfect time to refinance your car loan.When is a good time to refinance a car loan?The average car loans above should give you a sense of whether or not you can find a lower car loan APR when you refinance. But if any of the following apply to you, now is probably a great time to refinance your car loan.You got talked into dealer financing with your original loan Your credit score has improvedThe market rates have dropped since you initially applied (And they probably have!)You need some extra breathing room in your monthly budgetYou want to add or remove a co-borrowerOn the other hand, if any of the following apply to you it might not be the best time to refinance your car loan.If your existing loan has heavy prepayment penaltiesIf you need a high credit score for another applicationIf your existing loan is less than six months oldIf your existing loan has less than a year leftIf your credit score has decreasedToday’s car loan rates are lower than ever, making it the perfect time to refinance your car loan.With rates this low, now is the perfect time to refinance your car loan with Auto Approve! Just fill out some basic information and we can help you start comparing rates (and saving money) today. And rest assured that we never mark up your rates; we are passionate about passing the savings right on to you. So don’t wait any longer – get a free quote from Auto Approve today!GET A QUOTE IN 60 SECONDS

Car leasing has become more and more popular over the past decade. And it’s no surprise; there are many benefits to leasing a car. You get to trade in and get a new car every few years, you don’t have to worry much about maintenance, and the monthly payments tend to be much lower than traditional financing. But sometimes the requirements of leasing are more strict than the requirements of financing, especially when it comes to your credit score.The credit score you need to lease a car will vary from dealer to dealer. Having a good credit score will earn you a much better interest rate and better repayment terms. But if your credit score is less than perfect, you may still be able to lease a car.According to data gathered by Experian, over half of lessees had a credit score over 741 in the fourth quarter of 2021. Though that is a pretty high bar, all is not lost if your credit score is below that. In fact, you may even be able to get a lease if your credit score is below 700, although you may have to make some concessions. But having a good credit score will put you in a much better position to negotiate a good car lease.Today we are talking about why your credit score is important when leasing a car, and how you can improve your score to get the best car lease deals and terms.Why is a Good Credit Score Often Needed for a Car Lease?When determining your car lease rate, lenders will look at the following factors:Market ratesYour incomeThe vehicle you want to leaseYour credit scoreAnd while these are all taken into account and are all important, your credit score is without a doubt the most important factor in determining your car lease interest rate.Credit scores indicate to lenders how reliable of a customer you are. Will you pay your debts back? Will you pay them back on time? The less of a risk you are as a borrower, the more likely you will be approved for a car lease and the better the interest rate you are offered will be.Your credit score is determined by five major factors:Your payment history. This makes up 35% of your credit score. This category tells lenders if you pay your accounts on time, and if your payments are on time, full, and consistent.  This is the most important category in your credit score.Your amounts owed. This makes up 30% of your credit score. This category tells lenders how much debt you are in. The accounts owed category uses your credit utilization ratio, which measures the amount of money you owe to the amount of credit you have available to you. This is measured both as an overall ratio of your total debt and total credit, and measured for each individual account. You want your credit utilization ratio to be less than 30% ideally. The length of credit history. This accounts for 15% of your credit score. This measures how long you have had your accounts open. The longer you have a history of open accounts that you consistently pay, the higher your score will be.Your credit mix. This section accounts for 10% of your credit score. This section looks at how diverse your portfolio is. A healthy mix of loans, credit cards, retail credit cards, mortgages, etc will help show lenders that you can balance having varying accounts open.Your new credit. Your new credit category accounts for 10% of your credit score. If you are opening new lines of credit, it means there are some variables that may change your current credit situation. For example if you are opening a new line of credit, you may currently owe more money than your current report is reflecting. The most important categories in your credit score are your payment history and your amounts owed. Staying current with payments and making sure that you do not take on too many debts are the most important things you can do for your credit score.Your credit score takes all of these factors into account and assigns you a three digit number between 300 and 850. These scores are defined along the following categories:Exceptional (Super Prime): 800-850Very good (Prime): 740-799Good (Near Prime): 670-739Fair (Subprime): 580-669Very poor (Deep Subprime): 300-579As the latest Experian data pointed out, more than half of lessees were reported to have either prime or super prime credit scores. With these high credit scores, you will be more likely to get a better car lease rate and better leasing terms.Does Leasing a Car Build Credit?A car lease is a type of installment account. An installment account is simply a loan that has fixed payments over a period of time. Other types of installment accounts include mortgages and personal loans. Installment accounts are reported to credit agencies, therefore they will affect your credit score.Leasing a car will be another monthly bill that you will have to keep up on. But if you can make consistent, on time, and full payments, leasing a car can help boost your credit score. Make sure you do not get in over your head with your car lease; car payments can add another burden on a tight monthly budget. Always make sure you have breathing room in your budget in case of an emergency.How Can You Improve Your Credit Before You Apply To Lease a Car Online?You want to make sure that your credit is in its finest shape before you look to lease a car online. Here are our top tips to improve your credit score before applying for a car lease.Check your credit reportYou can request a copy of your credit report once a year from each of the three major reporting agencies (Experian, Transunion, and Equifax). That means that three times per year you should be reviewing your credit report for errors or mistakes. Be sure to do this before you apply for a lease. Compare your payment histories, make sure there aren’t any strange accounts that you are unaware of, and make sure all of your personal data is up to date. IF you notice any mistakes, report them immediately. Little issues here and there can spell big trouble for your credit score.Commit to making on time paymentsSince your payment history makes up 35% of your credit score, this is very important. Pay extra attention to your payments in the months leading up to your lease inquiry. Signing up for autopay can be very helpful if you have a tendency of missing payments. If your accounts don’t offer autopay, try setting up alerts in your calendar to remind yourself that a payment is due.Pay down your debtsReducing your credit utilization ratio by paying down debts can have a positive effect on your credit score. Remember that your credit utilization ratio is calculated on your total debts, as well as your individual accounts. So if you have one account in particular that you owe a lot of money on, try to strategize your payments and pay down those debts first.Request higher limitsWhile many accounts will automatically grant you higher limits as your account matures, it doesn’t hurt to request a higher limit. Requesting higher limits from your credit accounts can help improve your credit utilization ratio and boost your credit score significantly.Wait on opening other new accountsOpening a new account triggers a hard inquiry on your credit report, which can cause your score to dip slightly. It can also affect your length of credit history. These are only minor dings on your credit score, but it’s best to hold off anyway. You never know what few points could stand between a good credit score and an excellent credit score.Become an authorized userIf you have a family member who has exceptional credit, you can ask them to become an authorized user on their accounts. This can give your credit score a major bump.Try Experian BoostExperian Boost  is a new service that can instantly boost your credit score by including payment histories that are usually not included in credit score calculations. For example, your on-time Netflix payment would not normally count towards your credit score, but with Experian Boost, it would count positively. And if Experian finds that you don’t have a good history with these accounts, it won’t count them against you. While this won’t boost your score 100 points, it can give you an extra few points that might make all the difference for your car lease rate. It’s important to have a good credit score to get the best deal on your car lease.Leasing a car is a great option for many people, and having an excellent credit score can help you get a great deal. If you already have a car lease and are looking to purchase your lease, Auto Approve can help! Car lease purchase is one of our specialties, and we can help secure you a great rate with one of our top lenders.GET A QUOTE IN 60 SECONDS

When you finally decide to get a new car, your first instinct may be to buy. But have you considered that leasing might be a better option?There are a lot of benefits to buying a car, but for many people, the perks of leasing a car will far outweigh the benefits of buying a car. So why is it sometimes better to lease a car than to buy?If You Lease a Car, You Can Negotiate The PriceThere is a misconception when it comes to leasing that you do not have as much negotiating power. But this could not be farther from the truth. When you lease a car, you actually have much more to negotiate on than when you buy a car. So what exactly can you negotiate on your car lease?The Capitalized CostThe capitalized cost (or “cap Cost”) is the agreed upon value of the car. In other words, it is the sticker price of the car. Your car lease payments will all be based off of this price, so it’s important to negotiate this number as low as you can. Be sure to go to Kelley Blue Book and Edmunds to get a good sense of what a fair value is for your car. The Money FactorThe money factor is similar to the interest on a loan. It is essentially the cost of leasing the car. Money factors are expressed as very small numbers (such as .003), but you can multiply this number by 2400 to get an approximate percentage that makes sense (.003 x 2400 = 7.2%).Your ability to negotiate this will vary from dealer to dealer. Your money factor is determined mostly by your credit score, so the factor that you are offered will depend on which bracket your credit score is in. Some dealers will claim this is non-negotiable, while some dealers may budge. It is worthwhile to try to negotiate this rate as low as possible.The Down PaymentYou can usually negotiate the down payment required on your lease. And if your credit score is good enough, you may be able to put zero money down. When you buy a car, you want to put down as much money as you can, as you will not have to pay interest on that money and it will help ensure that your loan doesn’t become underwater. But leasing is different. If you put a down payment on a car lease and something happens to it, that money is simply gone. Additionally, one of the main perks of leasing is the low upfront costs. If you have a large down payment, this defeats this perk. You should always try to negotiate this and roll over any down payment requirements into monthly payments. The Mileage AllowanceDepending on how much you drive, the mileage allowance may be a huge hindrance for you. All leased cars have annual mileage allowances, typically 10,000 or 12,000 miles per year. If you go over your allotted mileage, you could face a fee for every mile that exceeds your limit. So you want to be sure to negotiate this term in your car lease agreement. The Lease TermConsider how long you want to have your leased car. This will vary from person to person – some people love getting a new car as soon as they are able to, while others like to stick with a car they are comfortable with for a longer period of time. You should be sure however that you never extend your lease beyond your warranty period. If something breaks while you are leasing the car but it is not covered under warranty, it will be your responsibility to fix it. And that can be a big hit in the wallet.How To Negotiate a Better Lease of a Car OnlineLeasing a car online may provide you the best chance to get a good deal. Instead of being limited to the dealerships that are nearest to you, you have a much larger market to look through. So here are our top tips to negotiate and lease a car online.See what you can afford. Go through your budget and see how much you can comfortably afford to spend every month on a car lease. (If you need some help with your budget, we have a handy guide to budgeting you can use) When thinking through your budget, be sure to not overextend yourself. Keep in mind that emergencies happen and you don’t want to pick a car lease that just fits into your budget. Always give yourself some breathing room.Research cars. Take a look online and see what type of car suits your needs the best. Would you prefer a car or an SUV? What color do you prefer? What makes and models have the best reviews? Websites like Kelley Blue Book and Consumer Reports can help you to narrow down your choices and give you a good idea of what a fair capitalized cost will be.Search for dealers. There are tons of dealers and online sellers for you to choose from. Do your research to see who has the best customer satisfaction ratings and who has the best car lease deals on the car you are looking to lease.Do a buy vs. lease comparison. Make sure that leasing is the right option for you. It may be helpful to do all of the math and determine what your monthly payments would be for both. Leasing will almost definitely result in lower monthly payments, but make sure you are comfortable with the pros and cons of leasing before agreeing to anything.Select your dealer and apply. Once you know what you are looking for and who has the best deals, select the dealer you want to move forward with. In order to apply for your lease, you will most likely need the following information:A valid photo IDYour insurance informationProof of income (normally your last two pay stubs will suffice)Proof of residency, like a current utility billIf this will be a trade-in, you will also need any trade documents, such as your current car’s title, registration, and/or loan release. Compile all of your documents and scan them onto your computer. Complete all of your applications and wait for your offers to come in. Negotiate. When your offers come in, you can start negotiating. You can negotiate all of the same points that you would negotiate in person. Be sure you are getting a fair capitalized cost and market factor, and make sure the down payment, lease term, and mileage allowance are all reasonable. Remember: a larger online market means you have more options, so don’t rush into any deals and don’t settle.Sign and arrange transport. After you have decided on which loan is best for you, you can sign on the dotted line and start arranging for transportation. The dealer or service you are leasing from will probably be able to arrange this for you, but it doesn’t  hurt to look around to see if you can find a better car lease deal.How Do You Get The Best Car Lease Deals?In order to find the best car lease deals, you will need to do some research. There are tons of websites that specialize in online leases, like CarsDirect and TrueCar. But be sure you know what is a good value for the car lease you are interested in by using sites such as Kelley Blue Book and Edmunds to look up values.If you are already leasing a car and are interested in purchasing it, you can find great lease purchase deals online as well. Purchasing your lease may be a good option if any of the following apply to you:You love your car and can’t bear to part with itYou have gone over your mileage allowance and will be responsible for heavy feesYou have a lot of wear and tear on your car and will be responsible for heavy feesYour car is worth more than the buyout priceYou have a party that is interested in buying your car from youWhatever your reason is, lease buyouts can be a great way to save money and stay in the car you love. At Auto Approve, lease buyouts happen to be one of our specialties. We can help you secure financing and keep you in the car you love! Sometimes it makes more sense to lease a car rather than buy one, and sometimes it makes sense to purchase your car when the lease is over.There’s a lot to think about when it comes to leasing a car. Be sure to weigh your options and decide what works best for you. No matter what you decide, be sure to do your research and negotiate as much as possible.If a lease purchase makes sense for you, you can get started with Auto Approve today!GET A QUOTE IN 60 SECONDS

If auto loan refinance has been on your mind, you are probably wondering about all the pros and cons. While you have heard that refinancing your car loan can save you a lot of money in the long run, what about the upfront costs? Does it cost money to get an auto loan refinance? And if so, is it worth it to refinance your car loan?In this article, we'll take a closer look at refinancing and what you need to know to decide if refinancing your vehicle loan is right for you.Is It a Good Idea To Apply For A Car Refinance?Auto refinancing has a lot of benefits, but like everything, you should do your research and make sure it is the right decision for you. Let’s talk about the pros and cons of refinance (car, truck, SUV or motorcycle)The Pros of RefinancingThere are a lot of pros to refinancing your car loan. The biggest of course is that it can save you a lot of money. By refinancing your car loan to a lower APR, you can save hundreds if not thousands of dollars over the life of your loan. You may qualify for a lower APR if your credit score has increased or if the market rates have decreased (market rates have dropped almost 2% in the past two years, so chances are the market rates are lower now than at your initial financing).The Cons of RefinancingWhile you can save a lot of money through auto refinance, you will be required to pay some upfront costs. They will vary from lender to lender and depend on not only your current loan’s terms, but also your new loan’s terms. Here are a few costs that you may be responsible for:Prepayment fee. Some lenders charge a fee for paying off your loan early. This should be outlined in your contract, and will vary greatly from deal to deal.Processing Fee. Both your current lender and new lender may charge you a processing fee.Registration Fee. You may be required to re-register your car when you refinance your car loan. This will depend on the state you live in.Title Transfer Fee. Some states may charge a title transfer fee, even though the title is just moving from one lender to another. It’s hard to say exactly how much the upfront costs of car refinancing are. But refinancing a car loan can save you a lot of money in the long run, so it’s worth doing the math to see how much money you can save with an auto loan refinance.When does it make sense to refinance your car?If any of the following apply to you, it might be the perfect time to refinance your car.If your credit score has increased since your initial financing, you may qualify for a lower car loan APR.If your income has increased since your initial financing you may qualify for a lower car loan APR.If you got talked into a bad deal in the first place, you may find better terms.If the interest rates in general have dropped since you first took out the loan on your vehicle, you may find a lower car loan APR.If you want to add or remove a borrower to your policy you will need to refinance your car loan.If you need some extra cash every month, refinancing your car loan to a lower APR or lengthening your repayment period (or both) can reduce your monthly payments.When does it not make sense to refinance your car?If any of the following apply to you, it might not be the time to refinance your car.If your credit score has decreased, you might not qualify for a lower APR.If you have an old vehicle or a vehicle with high mileage, it might not qualify. If you owe more on your car than it is worth, you might not qualify.If you have less than a year left on your loan, you might not qualify.If any of the above apply to you, it might make sense to wait to refinance. Does Refinancing a Car Lower Your Credit Score?There will be some upfront fees associated with your car refinance, but are there any other downsides to refinancing your car? The only other slight downside to refinancing is the slight ding that your credit score will take. But this ding is only temporary, and the benefits of refinancing will most likely far outweigh this. In fact, refinancing your car loan to a lower APR can help your credit in the long run if it helps you to manage your monthly payments more efficiently. Car refinance will affect two main categories on your credit report: your history length and your new credit. Opening a new account will shorten your credit history length. It will also count as a new credit and the hard inquiries will be noted in your credit report.Because of this, your credit score will most likely take a slight dip when you refinance, but car loan refinancing may still increase your credit score in the long run by making your payments more manageable.  Adding in a car loan can also be beneficial to the credit mix category on your credit report.What are the Best Car Refinance Companies?So what should you take into consideration when looking at car refinance companies? As always, we recommend doing your research before jumping into any financial decisions. There are a lot of places where you can refinance your auto loan, including traditional banks, credit unions, online lenders, and dealerships. When looking into any of these options, take into consideration the following factors:Customer reviews/ customer satisfactionAverage rates being offeredAverage fees that are chargedA great option for many people is to use a company that specializes in auto refinance, like Auto Approve. Since we know the refinance industry better than anyone else, we are equipped to guide you through the auto refinance process and answer any questions you may have along the way. We have relationships with lenders across the country, so we can get you the best deals and make the application process seamless.  And when the offers start coming in, Auto Approve can help answer any questions and help you to make the best decision.While it may cost money to refinance your car loan, it is probably still worth doing so.We hope this answered your questions about auto refinance. To get more information on refinancing, or to find out just how much money you can save, get in touch with Auto Approve today!GET A QUOTE IN 60 SECONDS

With car loan interest rates still at a record low, car refinancing is more popular now than ever. And for good reason – in the past two years, car loan interest rates have dropped almost 1.5% on average, which adds up to a lot of savings. Many people are eligible for lower car loan APRs than they ever thought possible.But when it comes to actually refinancing your car loan, how do you know who to trust? Which car refinance companies are the most reliable? Today we are talking about how you can refinance your car loan to start saving money, and how you can decide which car refinance company is right for you.What is needed to refinance a car?The good news is that refinancing your car loan is actually very easy. With a little preparation and research you could be saving money in no time.Review your current loanIn order to refinance your car loan, you will need to first take a look at your existing loan. Be sure to look at the following terms of your agreement:Current monthly payment The remaining balanceThe amount of time left to repay the loan in months (the loan term)The interest rate Prepayment penaltiesYou want to be sure that you have all of this information available when you go to apply for refinancing. Not only will you be required to provide this information, but it will help you to decide if it is worth it to refinance. Auto loan lenders sometimes charge prepayment penalties to dissuade people from paying off their loans early, so you want to be sure that any penalties you may be responsible for are not going to outweigh the amount of money you will save.Gather your documentsGetting all of your required documents together ahead of time will help ensure that the application process goes smoothly. You will likely need the following documents to apply for an auto refinance. Your Photo ID, such as a passport or driver’s license.Your vehicle’s information, which may include the bill of sale, VIN number, make, model, and year of your car.Proof of income and financial history, such as pay stubs, banking information, and your credit report.  Proof of residence, such as a mortgage statement, lease agreement, or utility bill. Note that PO boxes are not acceptable as proof of residence.Proof of insurance. Place all of these documents in a secure location. If you will be applying online, scan all of your documents onto your computer for easy access.Check your credit score and reportBefore you apply, you want to know the condition of your credit score and credit report. After all, the car loan APR that you are offered will depend heavily on your credit score. Request a copy of your credit report – which you can do once per year for free – and review it carefully for any errors. Is everything accurate and up to date? Is anything misreported? If there is anything that is not accurate, contact the account associated with the mistake. You can also petition the credit bureau if there are any inconsistencies or errors. The higher your credit score is, the lower the APR that you are offered will be. Research lenders and applyUntil you apply for auto refinance, you will not have specific offers to compare. But you can still do your research ahead of time on customer satisfaction. Research different refinance companies and lenders and pick three to five based on average rates and customer reviews. Using a company that specializes in auto refinance, like Auto Approve, can simplify this for you a great deal. By using their existing relationships with lenders, they can expedite the application process while securing the best rates possible.  Complete all of your applications around the same time so that it will only count as one hard inquiry hit on your credit report. Compare, sign, and saveOnce you have your offers, you can compare to see what is the best fit for you. Be sure to consider the following:Interest Rates Repayment PeriodCustomer ReviewsMiscellaneous FeesPrepayment Penalties – There are no limits to the amount of times that you can refinance your car, so make sure you don’t agree to prepayment terms that you may regret in the future.Once you compare all of the offers, decide which is the best fit for you. Then just sign on the dotted line and let the lender take care of the rest! They will contact your old lender to make payment on your loan.Is refinancing a car worth it?While auto loan refinance is super easy, you may be wondering if it’s worth it. And the answer depends on your personal situation.You should refinance your car loan if your score has improvedIf your credit score has improved since your initial financing, you may be eligible for a much lower car loan APR. Credit scores are one of the most important considerations in car loan APRs, so the better your score is, the better the offered interest rate will be. Your credit score may have increased if:You have been making consistent, full, on-time paymentsYou have had a negative event expire (like a bankruptcy)Your credit limit has increasedYou haven’t had a lot of credit inquiriesYour credit utilization score has increased. Small changes to any of your credit categories can end up having a big effect on the car loan APR you are offered. Sometimes just the passing of time can cause your credit score to increase, so it’s worth checking on your score periodically.You should refinance your car loan if the market rates have droppedCar loan rates have dropped significantly in the past two years, so chances are the market rates are lower now than when you initially applied for car loan financing. You should refinance your car loan if cash is tightIf you are short on money every month for one reason or another, refinancing your car loan can provide a bit of breathing room for you. By either refinancing your car loan to a lower car loan APR or by lengthening your repayment period, you can significantly lower your monthly car payments. If you are having trouble keeping up on payments, refinancing your car loan to make your payments more manageable may actually help your credit score in the long run.You should not refinance your car loan if your current loan is underwaterIf your current loan is underwater (meaning you owe more on the car than the car is worth), you should not refinance your car. You will most likely not qualify anyway. You should not refinance if you have less than a year left on your current loanAs you near the end of your repayment, car loan refinancing becomes less and less beneficial. Most companies will not refinance your loan if you are near the end of the term, but even if they do, it’s probably not worth it for you. The various fees will most likely outweigh the minimal savings that you may have. You should not refinance your existing loan is less than 6 months oldWhile this is not a hard and fast rule, experts recommend waiting six months to a year before refinancing your loan. This will give your credit score a chance to rebound from your initial financing. Where is the best place to refinance a car?If the time seems right to refinance your car, you want to know which car refinance companies are legit and which companies can get you the best auto refinance rates. While you can refinance your car through many different lenders, including traditional banks, credit unions, online lenders, and car dealerships, it’s best to use a company that specializes in car loan refinancing.Using a company that specializes in auto loan refinance has many benefits. They know the refinance industry better than anyone else and are more equipped to guide you through the process. They make applying super easy and can help match you to the lenders that are best suited to your needs. By handling the applications for you, you can save a ton of time on paperwork (who has time for endless amounts of paperwork?). And when the offers start coming in they can help answer any questions and help you to make the best decision.At Auto Approve, we are dedicated to making the auto refinance process quick and easy. We are just really passionate about saving people money. So if the time seems right for you to refinance your car loan, know that you will be in good hands with Auto Approve. Just ask our customers – Auto Approve has a 96% would recommend rating on LendingTree and over 2,200 five star reviews on TrustPilot. Now is a great time to refinance your car loan, and Auto Approve makes the refinance process quick and easy.So don’t wait any longer to start saving money.GET A QUOTE IN 60 SECONDS

Refinancing your car loan can be a great idea for a lot of reasons. If you are like most people, you are probably overpaying significantly on your car payments every month. Maybe you got talked into a bad deal, or maybe market interest rates were higher when you originally financed your car loan. But no matter what the reason, your best solution is most likely to refinance. Car loan refinancing has a lot of benefits, but you may be wondering “does refinancing a car hurt your credit?” Refinancing your car loan will cause your credit score to take a temporary dip, but it’s unlikely to hurt your credit score in the long run. In fact, refinancing your car will probably increase your credit score over time.Does Refinancing a Car Lower Your Credit Score?Refinancing a car loan is when you pay off your existing car loan with a new loan, ideally a new loan that has better terms and a lower car loan APR. So how exactly does car refinancing affect your credit score? To understand this, we must first look at how credit scores are calculated.Credit scores are three digit numbers that tell lenders how likely a person is to repay their debts. The scores range from 350-850 and are calculated by taking into account the following factors on a person’s credit report.Factor #1: Payment HistoryYour payment history makes up 35% of your credit score. Do you make your payments on time? Are your payments in full? Are they consistent? This section of your credit report will show lenders how dependable you are when it comes to paying your debts. It will show any missed payments or bankruptcy details.Factor #2: Accounts Owed Your accounts owed make up 30% of your credit score. How much money do you owe compared to how much money you have available to you? This section shows lenders if you are responsible with the credit that you have available to you. This section looks at your credit utilization ratio, which is a ratio of your total debt compared to your total credit available. The lower your ratio is, the higher your credit score will be. Typically lenders like to see that this number is below 30%.Factor #3: Length of Credit History The length of your credit history accounts for 15% of your credit score. The longer you have had credit, the higher your score will be. This shows lenders that you have good and steady relationships with your existing accounts.Factor #4: Credit Mix Your credit mix accounts for 10% of your credit score. You will need a good mix of retail accounts such as credit cards, loans, and mortgages for a good score. This shows lenders that you can balance your payments between multiple accounts.Factor #5: New CreditYour new credit accounts for 10% of your credit score. If you open a bunch of new accounts, you will be flagged for a lower score. This indicates to lenders that you have new debts that may change your ability to repay.How refinancing affects your credit scoreSo how does refinancing your car loan affect these categories? Car refinance will affect two main categories on your report: your history length and your new credit. When you open a new account, it will shorten your credit history length. It will also count as a new credit and the hard inquiries will be noted in your credit report.Note: A hard inquiry occurs when a lender asks to see your credit report. It counts as a ding on your credit report because it shows that you are seeking a debt that is not yet noted in your credit report. BUT. Hard inquiries only stay on your credit report for about a year, so it is a temporary ding. Credit bureaus also know that people need to shop around for loans, so they allow a two week timeframe where all inquiries on your credit count as one hard inquiry. Don’t let a fear of multiple hard inquiries prevent you from applying to different lenders for your car refinance. Your credit score will most likely take a slight dip when you refinance a car loan. Refinancing your loan may still increase your credit score in the long run however. Refinancing your loan to a lower car loan APR can save you a significant amount of money each month. So if you have been struggling to make payments, a refinance can ease that burden and allow you to make more consistent and on time payments, increasing your payment history score. If you refinance your car and change your repayment period, you can also significantly reduce your monthly payments and give yourself more breathing room every month. This will also help improve your ability to make consistent on time payments.If you do not have a good mix of credit, adding in a car loan can be beneficial to your credit mix as well.When Is It a Good Idea To Apply For A Car Refinance?It is a good idea to apply for a car refinance if any of the following apply to you:Your credit score has improvedIf your credit score has improved since your initial financing, there’s a good chance you will qualify for a much lower car loan APR. Market rates have decreasedIf the market rates have decreased in general (which they have, significantly, in the last two years), you may be eligible for a lower car loan APR, even if your credit score hasn’t changed.You were talked into a bad deal initially, or agreed to dealer financingYou may have gotten into a bad deal in the first place and agreed to a high car loan APR. This is especially common with dealer financing. But if you pursue car refinance, you can change these terms.You need to add or remove a cosignerIf you would like to either add or remove a cosigner from your car loan, you will need to refinance your car loan. Lenders will not simply add or remove someone from the loan, as each offer is tailored specifically to each applicant. Removing one person or adding another person could greatly change the prospect of repayment in their eyes.You need extra cash every month If you need extra cash every month, refinancing your car loan can help you out. Even if you don’t qualify for a lower car loan APR, you can change your repayment plan. By changing your repayment plan, you are adjusting the amount of time that you have to pay the money back. When you extend the repayment period, your monthly payments will automatically decrease.But the time is not right to refinance if…There are a few times when it will not be worth it for you to refinance your car loan. You have less than one year left on your existing loan. You will most likely not qualify for car loan refinancing. You just financed (or refinanced your car). Experts suggest waiting at least six months to let your credit score bounce back.You owe more on your car than the car is worth. If this is your situation, your loan is considered underwater and will not likely qualify for refinancing. Your car has over 100,000 miles. Lenders have certain restrictions for the cars that they refinance, and if the car is too old or has too many miles, they will not want to refinance your car loan.Which Car Refinance Companies Are Legit?If the time seems right for you to refinance your car loan, you are probably wondering which car refinance companies are right for you. While you can reach out to lenders directly and handle all of your applications by yourself, it is much easier to use a company that specializes in auto refinance, like Auto Approve. Using Auto Approve to refinance your car loan can help you in a number of ways:They have existing relationships with lenders to get you the best offers possible.Auto Approve never marks up their rates; they pass the savings right on to you.All you have to do is fill out some information and Auto Approve handles all the rest.You can have offers in minutes.Auto Approve has a high customer satisfaction rating, so you know you’re in good hands.Auto Approve even handles the DMV paperwork.Not all car refinance companies are as reliable or as effective as Auto Approve. That’s why we have a 96% would-recommend rating on LendingTree, as well as an A+ rating from the Better Business Bureau. Refinancing your car loan couldn’t be easier with Auto Approve.Refinancing your car loan may cause a temporary decrease in your credit score, but it can save you money (and ultimately may increase your credit score) in the long run.So if the time is right for you to refinance, don’t wait any longer! Start saving today with Auto Approve!GET A QUOTE IN 60 SECONDS

Getting a new car is always an exciting time, but it can also feel a little overwhelming. And this is especially so if you are looking to lease a car for the first time. Today we are talking about the must-ask questions of car leases. But before we get to those, let’s talk about how car leases work.When you lease a car, you are essentially renting the car. The monthly payments are based on the projected depreciation of the car over the time that you are using it. Since you are not buying the car, you do not have equity at the end of the lease term. Instead you have to either return the car or look into a lease buyout.There are a lot of positives and negatives when it comes to leasing a car. On one hand, you do not own the car outright so a lot of the maintenance and repairs that come with car ownership will be handled by the dealership. But on the other hand, since it’s not your car, you are not able to customize the car, sell it, or drive it as freely as you may like.Leases can vary greatly from dealership to dealership and from car to car.Here are the top three questions you should ask when looking to lease a car.How Long is the Car Lease?A major variable in car leases is the length of the lease. A typical car lease is three or four years, but can vary between two and five years. You want the lease period to be as long as or less than the warranty period. This way if something goes wrong while you are leasing it, it will be covered by the warranty. If your warranty expires before your car lease has ended, you will be on the hook for the repairs (which can be quite costly).If you are interested in a longer car lease, you are probably better off buying the car. In that case, even if you are paying for repairs and maintenance, you have an asset that you can use for years after the payments end (or you can always sell it).How Many Miles Does The Lease of the Car Include (And What Happens When I Go Over)?Another big question to ask is about the mileage limit on your lease. Car leases always have mileage limits, such as 10,000 or 12,000 miles per year. If you happen to go over that limit, it can mean hefty fines. Most leases have fees of 15 cents to 20 cents per mile over. So if you drive a lot, you are going to pay a lot in overage fees. For example, if you drive 15,000 miles per year every year for your three year lease period, and your mileage limit is 12,000, you could be paying $1,800 in overage fees at the end of your lease.Leasing a car is not for everyone. If you are someone who drives a lot, leasing might not be a practical option. If you are already leasing a car and have gone over the mileage limits (or know you are going to exceed the allotted mileage), it might be worth considering an auto lease buyout. You could save yourself a lot in overage fees and own the car instead.What Other Fees Does The Car Lease Have?On top of the mileage fees, you should be aware of other fees that may be in the lease. In fact, car leases tend to be full of hidden costs. What are often advertised as car lease deals usually don’t include the fees, fees which can add up substantially. You want to read your lease agreement very carefully and be sure to clarify any sticking points with the dealer. Here are some additional fees that you can expect.The Drive-Off FeesThe drive-off fees are the upfront costs of your lease. This is a combination of the down payment and any additional fees, such as registration fees. When you buy a car, you want to put a lot of money down upfront to offset your monthly payments. But this is NOT the case when it comes to leasing. In fact, you want to put as little money down in the beginning as possible. The way that lease payments are constructed, you do not save a lot of money by paying more upfront. And if your car were to be totaled, there’s no guarantee that you would get that money back (unless you purchase GAP insurance, which is always a good idea with leases).The Wear and Tear FeesWhat does the dealer charge you for wear and tear? When you return the car at the end of the lease period, there is some leeway for the condition of the car. A few slight scratches or stains can be expected after a three or four year car lease. But if there is anything that they deem beyond the normal realm of wear and tear, they might charge you a good deal. Ask about their wear and tear policy before you sign on the dotted line.The Administrative FeeDealers can hit you not once, but twice with an administrative fee. They often charge you an administrative fee when you initially lease the car, and then again when you return the car. And this fee commonly runs between $500 and $750 each time.The Termination FeeIf you need to end your lease early for any reason, there is most likely a hefty termination fee. Be sure that you are comfortable with this fee amount  – you never know when an emergency will pop up and you’ll need to end your lease for one reason or another.The Security DepositMany dealerships will have you put down a security deposit on your lease. This is intended to cover the excessive wear and tear. You may get it back, or you may not. Dealerships can make a good argument to keep the security deposit even if your car is in pretty good condition.And those are the top three questions you should ask when leasing a car.Leasing a car can be a great option for some people, and not a great option for other people. Look carefully at your driving habits before signing any lease agreements, and be sure to read all of the fine print when it comes to fees and hidden costs.If you have a car lease and are interested in buying your lease, Auto Approve can help! Contact us today to see how we can help you with an auto lease purchase.GET A QUOTE IN 60 SECONDS

When you buy a car, a down payment is usually part of the routine. Having a down payment when you buy a car can reduce your payments significantly and also help ensure that your car loan doesn’t end up underwater.But what about when you refinance a car? Do you need a down payment then? Today we are answering all of your questions about down payments, equity, and how you can refinance car loans.Is Equity an Auto Refinance Requirement?First up, let’s talk about down payments, equity, and how they relate to each other.A down payment is money you pay upfront for the car you are buying (essentially your first payment on your new car). Most of the time lenders require down payments, but even if it is not a requirement, it might be a good idea. (Providing a down payment will decrease your monthly payments and reduce the possibility of your car loan becoming underwater.)Equity on the other hand is the difference between your auto loan's balance and how much your car is currently worth. Down payments are not required for an auto refinance, but equity is required. This simply means that you do not need to put down any additional money on your loan, but the lender wants to know that there is value in the car that you are refinancing. Car loans are secured loans, meaning that if you defer on your car payments and can no longer afford them, the bank can take your car as collateral. If you owe more on the car than the car is worth, the lender will ultimately lose money. And that is their biggest no-no. So unless your car has equity, they will not risk refinancing your car loan.So how do you know if your car has equity? Look at the current amount that you owe on your loan, and compare it to the current value of your car. You can determine the current value of your car by using a website such as Edmunds or Kelley Blue Book. These websites take into account your car’s make, model, year, condition, and mileage, and can give you an approximate value. If you owe more on your car than it is valued at, you are most likely in an underwater loan and will have a difficult time refinancing your car loan. But if you owe less than the car is worth, your car has equity and will likely qualify for refinancing. What Are The Other Requirements To Refinance Your Auto Loan?Your car has to be worth more than you owe in order to refinance auto loans. But what are some other requirements for auto refinance?A Good Credit ScoreHaving a good credit score is important when it comes to refinancing your car loan. It’s not impossible to refinance your car loan with a less than great credit score, but it is harder, and it might not be as worthwhile. Credit scores take five main categories into account:Payment history (35%) Amounts owed (30%) Length of credit history Credit mix (10%) New credit (10%) The most important categories of your credit score are the payment history and the accounts owed, making up 65% of your score. Focusing on improving these areas can help boost your credit score. Lenders reserve the lowest car loan APRs for those with the highest credit scores.Your Current Loan’s TermsThere are a few terms in your current loan that will dictate whether or not you can refinance your car loan: the prepayment penalties, the time left on your loan, and your current payments.The prepayment penaltiesSome car loan agreements have prepayment penalties. After all, these lenders won’t be making as much money off of you if you leave to refinance, so they tack on extra fees to help make some extra money. This can vary greatly based on your loan. Be sure to read the fine print of your contract carefully to determine if the penalties will outweigh the savings of auto refinance. The time left on your loanIf you have less than a year left on your current car loan, you will have a difficult time finding a lender to refinance your car loan. Car loans are front loaded, amortized loans. This means that in the beginning of the loan, you are paying mostly interest, and towards the end of the loan, you are paying mostly principal. So the closer you are to the end of your loan, the less interest you are paying. Lenders don’t want to refinance your loan when they will not be making money off of you, so the closer you are to the end date, the less likely you are to find a lender who will refinance your car.Your current paymentsMaking on time, full, consistent payments is very important for your credit score. But it is also important for lenders to see this specifically in relation to your car loan. They want to know that you consistently pay your debts and are able to handle your car payments without issue.Where Can I Get The Best Auto Loan Refinance For Me?If you are overpaying on your car loan (and trust us, you probably are), you may be wondering where you can get the best auto loan refinance. You want to make sure to look around at different lenders (include a mix of traditional banks, online lenders, and credit unions). You will not be able to compare actual rates and terms until you apply, but you can get a preliminary idea from customer reviews as to what to expect.When you pick a few different lenders (aim for 3-5), apply to them all at once. When the offers start coming in, compare the following.Interest ratesPayment termsPrepayment penaltiesCustomer satisfaction ratingsHidden feesThe interest rate is the most important factor in your auto refinance, but be sure to take everything else into consideration as well. When you decide which lender is best for you, you can sign and start saving!At Auto Approve, we specialize in auto refinance, so you know we can get you the best auto loan refinance available. We have relationships with some of the best and most competitive lenders across the country. But don’t just take our word for it – our customer reviews speak for themselves (not to mention our A+ rating from the Better Business Bureau).You do not need a down payment to refinance your car loan, but there are some other requirements you need to consider.If you're ready to get started with auto refinancing, get your free, no-commitment quote from Auto Approve today!GET A QUOTE IN 60 SECONDS