How to Refinance an Auto Loan
So maybe you didn’t check out your favorite credit union’s ultimate guide to car loans ahead of time and inadvertently got stuck in an auto loan with less-than-favorable terms. What options do you have? Not to worry; SCCU has you covered. We make it easy to get out from under an auto loan from a different lender by refinancing your loan.
Refinancing to one of our lower car loan rates means you can save over the life of your car loan. With SCCU, you’ll enjoy a full list of additional benefits that comes with our auto loans, including no application fees, flexible terms9, our no payments for up to 120 days offer11, a simple electronic closing, and SCCU membership with free Online and Mobile Banking where you can easily make your monthly payment.
How Auto Refinancing Works
Refinancing your auto loan means you’ll be completely replacing your current loan with a brand-new car loan. The new loan serves to pay off all the debt that’s owed on your former loan so that you’re left with a single car loan. Your new car loan has its own interest rate, terms and conditions, and all the other details typically included in a car loan.
Let’s look at a refinance auto loan example:
- You have a 60-month, $40,000 car loan at a 5% APR that you’ve paid down to $20,000 over the last few years.
- You find that SCCU can offer you a refinanced car loan for the remaining $20,000 at a lower rate, such as 3% APR. You also discover you can stretch out your term a few extra months. With the lower interest and more time to pay, you’ll decrease how much you have to pay each month. Or you decide for a shorter term for the same monthly payment but less total cost over the life of your loan.
If refinancing interests you, here is more information
Is Auto Refinancing Always the Best Choice?
Even though we love to help members save money by refinancing their auto loans, sometimes refinancing isn’t the best financial move for every borrower. Lowering monthly payments, taking advantage of better interest rates, and changing financial situations can all be reasons that refinancing makes sense at the moment, but things can change.
At SCCU, we want our members to be in the best position when it comes to their financial wellness, so we work with you to help you understand what a new loan will look like and mean for your financial situation. Take the time to run the numbers through our auto refinance calculator
to help determine if this is the best course of action for you. With no application fees on auto refinancing, it never hurts to explore your options to see how this will affect your individual financial situation.
Still have questions? Request a loan consultation
and we’ll help to guide you through the entire auto loan refinancing process.
Insurance and New Car Loans
Insurance can seem like an afterthought when it comes to car loans, but this important protection is often critical to getting the car of your dreams. Almost every state in the U.S. has a requirement for car insurance in order to drive a vehicle. In Florida, for example, you’ll need proof of Personal Injury Protection and Property Damage Liability
automobile insurance to register your vehicle.
Your financial institution will also in most cases require insurance coverage to secure an auto loan. SCCU requires collision and comprehensive coverage for all vehicle loans.
Do I Need GAP Coverage with a New Car Loan?
Guaranteed asset protection (GAP) coverage works like this: if the vehicle you just financed is stolen or totaled, you could end up owing more money than your insurance company pays out. That would leave you having to cover the difference out-of-pocket. GAP covers the difference for you.
While it’s not always a requirement, GAP insurance has been known to come to the rescue in different situations. Times when GAP insurance makes the most sense include:
No money down
: When you don’t put a lot of money down for a new car loan and have a long term, you may owe more than the actual value of your vehicle, especially for the first couple of years in most cases.
: You purchased a vehicle that depreciates quickly, such as a luxury vehicle or certain types of SUVs. As above, this can mean that you owe more than the value of the vehicle.
Type of insurance payout
: If you get in a wreck with a new car, your insurance company typically pays claims based on actual cash value rather than full-replacement value. This means that, rather than getting a brand new car to replace the one that was wrecked, you’ll get the value of the car at the time of the claim incident (as a check), regardless of how much you owe.
GAP insurance can be a lifesaver in the right situation. To learn more about this offering, check out GAP coverage through SCCU
Benefits of Credit Union Auto Loans
Throughout this guide, we’ve referenced benefits that SCCU can offer you in auto finance/refinance situations. Here is a more in-depth look at why credit union auto loans often make sense for consumers.
First, credit unions are member owned. So, there’s no group of executives deciding what direction SCCU should go. Instead, a board of directors is elected with each account holder serving as a member of the credit union. Because of this structure, the decision-making board and the members of the credit union have mutual interests. What’s good for one is good for the other.
As a closely related benefit, credit unions are not-for-profit organizations. This means that, rather than a strong focus on continually increasing profits, credit unions typically offer higher interest rates on savings and checking accounts and lower rates and fees on credit union auto loans, mortgages, personal loans, and more. In other words, credit unions return those profits to the members through discounts
Plus, the National Credit Union Administration (NCUA) insures the deposits of account holders at federal credit unions and the majority of state-chartered credit unions. This is comparable to what the FDIC does with traditional banks and provides assurance that your money is secure at SCCU.
Finally, credit unions typically offer more personalized service than big banks. This can include more member-friendly auto loan requirements, exclusive benefits, and an overall rewarding experience.
Founded by seven members on June 7, 1951, as Patrick Air Force Base Credit Union, we originally served 28 members with $372 in assets with a mission to serve members better with accounts and loans. Since that time, SCCU has grown to serve more than 500,000 members with more than $7 billion in assets while still focusing on the financial wellness of each of our members.
Today, SCCU is the third largest credit union in Florida, serving members in 34 counties. Although we’ve grown significantly and changed our name to better reflect our expanded footprint, here’s what has never changed: We still exist to serve our members through cooperative ownership. We still return our profits to our members through lower loan rates and fees, among numerous other benefits. We’re here for you.
Apply for an SCCU Auto Loan in Just Minutes
Fast approval decisions, no application fees, low rates8
for new and used vehicles, and flexible terms9
are just some of the many benefits that come with working with SCCU for your new car loan.
Whether it's getting pre-approved
for a new auto loan
to purchase a vehicle, an auto loan refinance
, or securing auto financing
at the dealership, SCCU has a complete suite of options available to help you find the best financing options available. If you have any questions along the way, you can always sit down with one of our helpful express service associates.
Please call the number that’s most convenient to you:
- Brevard: 321-752-2222
- Broward: 954-704-5000
- Miami-Dade: 305-882-5000
- All Other Areas: 800-447-7228
Compare your auto loan options at SCCU today!