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Car Financing - Can Anyone Answer This Question?

gr8tocre8gr8tocre8 Posts: 1
edited November 2016 in General
I'm about to trade in my current car (a 2006 Mercedes S55AMG which I still owe money on) with a 2011 Mercedes S65AMG.

When I purchased my S55, the dealer told me that as long as I stay on top of my payments for at least a year, I will be able to refinance at a lower rate (at the time of purchase my credit was around 650).

It has now been 18 months since I purchased it, and I've paid every payment on time. Here's my question: Am I better off refinancing my old car FIRST, then going to the dealer to trade it in?

In other words, if I trade in my S55 with an already-existing lower interest rate, will that help me get lower interest on the new car, or does this not matter?

Thanks for any insight, I appreciate it.

Comments

  • kyfdxkyfdx Posts: 128,280
    gr8tocre8 said:

    I'm about to trade in my current car (a 2006 Mercedes S55AMG which I still owe money on) with a 2011 Mercedes S65AMG.

    When I purchased my S55, the dealer told me that as long as I stay on top of my payments for at least a year, I will be able to refinance at a lower rate (at the time of purchase my credit was around 650).

    It has now been 18 months since I purchased it, and I've paid every payment on time. Here's my question: Am I better off refinancing my old car FIRST, then going to the dealer to trade it in?

    In other words, if I trade in my S55 with an already-existing lower interest rate, will that help me get lower interest on the new car, or does this not matter?

    Thanks for any insight, I appreciate it.

    Your current loan's interest rate will not affect your new purchase. Refinancing would be a waste of time, and might affect your credit score.

    I wouldn't put any stock in what the dealer told you, either way.

    Did you get a good deal? Be sure to come back and share!

    Edmunds Moderator

  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    The dealer can compete with the loan rate you might get from your bank or CU, but he can't predict whether it's going up or down. And I agree, re-fi is not a good idea.
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