No, I'm not talking about your house... I wish we could get in on some of these awesome interest rates, but since our mortgage is upside-down and our loan isn't owned by Freddie or Fannie, we're out of luck. What we can refinance, however, is our car.
We purchased our 2009 Subaru Forester in Nov. 2008. While we don't necessarily regret this purchase, I wish we had taken more time to do some research and look around.
You see, this was an impulse purchase. We needed a new car after a car accident on Nov. 15, 2008 totaled our 2006 Forester, and shook us up pretty badly. Physically, we made out pretty well... but emotionally, it was kind of hard to finally realize that life can be over in an instant. One person in the accident didn't make it, and two others had life-altering injuries. We were in awe of how our Subaru reacted to the HUGE Mercedes SUV that slammed into the driver's side, crumpling the body, but not even denting the steel frame behind the driver's door, which is what kept Andrew from being severely injured.
Thanksgiving was fast approaching, and there was no way we could squeeze our three dogs into our VW GTI. Insurance check finally in hand, we went to Brown Subaru on Thanksgiving Eve... just to look. Well, after hearing about the new safety features while safety was at the forefront of our minds, there was no way we could walk away without that brand new car, financed by the dealership through Chase. We still negotiated and got a pretty good deal on that new car (which we LOVE), but financially we should have weighed our options more and maybe looked at a used model since we had been really happy with our 2006.
At the time of our purchase, the credit union couldn't come anywhere near the interest rates offered on our new vehicle purchase. Now, though, the credit union is offering a special auto loan rate of 3.99 for 09-newer, whether it's a new purchase or refinance. Initially I ignored the promotion... we got a pretty good rate through Chase, and we have paid almost two years of our 6 year loan... but I got curious and decided to run the numbers. I used the calculators at bankrate.com to calculate the amortization schedule of our initial loan. The total interest paid by the end of the loan would reach over 3,000... and we've paid a little over $700. I then calculated a new amortization schedule for a 5 year refinanced loan. To my surprise, we would pay only slightly over $1000 in interest to the new loan, saving us over $1000 total interest.
I then calculated the amortization schedule if we were to continue making the same payments (about $60 more than our recalculated payment), and we would not only save over $1400... but we would then have it paid off a month before our current loan ends! That's a pretty awesome deal! We promptly filled out the application online, confirmed some information over the phone, and met with a loan officer for 15 minutes to sign the papers... about 30 minutes total to save over $1400!!!
So sometimes it's worth it to do a little math... there is no way I thought we could save so much while still paying off our loan before its current due date... just think how much we could save if we could afford to refinance our home!
