Are You Upside-Down on Your Car Loan?

First, a definition. What does the phrase “upside-down” or “underwater” actually mean when it comes to a car loan? The problem arises when the borrower owes more money on their loan than the car is actually worth. For example, if you have an accident and your car can’t be repaired, it may be worth close to nothing, but you may still have thousands of dollars left to pay your lender even after insurance pays your claim.

This scenario can happen even without a catastrophic event like an accident. Say you are moving to a new city where you don’t need a car and need to sell yours to help pay for moving expenses. Even if your car is fairly new and in excellent shape, you may not be able to sell it for enough money to pay off what you owe. New cars depreciate—or lose value—quickly, and in every case, you will still need to pay the lender back what you owe, regardless of how much it’s worth today.

Don’t forget that your car is an asset just like anything else you own, and its value is affected by market conditions. If your car is no longer as popular—perhaps because a newer model has been released or it has received some negative publicity—it will fall in value, regardless of the amount you still owe. The value might also decline faster than your loan balance declines if the car has higher mileage or is in poorer condition than average. Also, keep in mind that the portion of the loan that covers financing fees and add-ons are nearly impossible to recoup even when reselling the most desirable car out there.

Consider Refinancing

You may be tempted to get out of your loan by trading in your car for another. Your dealer can present an attractive option: rolling the amount you owe on your old car into financing for the new one. Since the dealer is in the business of selling cars, they are motivated to get your new sale and trade-in, even if it puts you even further under water by combining your debt.

You are much better off refinancing your car through a company like RefiJet, which can vet your application through its wide network of lending partners to get you the best possible deal for which you qualify. This is especially true if financial markets have changed or your personal financial situation has improved, which may help to qualify you for a lower rate or monthly payment.

When you refinance, you have the option of paying off some principle so you can get to the point where you’re no longer upside down. If you do decide to refinance, it’s a great time to consider adding GAP coverage, which pays the difference between what you owe and what the vehicle is worth in the event it is stolen or totaled.

With the help of a refinancing package and some diligent financial decisions, you can eventually put your upside-down status behind you and start on a fresh path toward better financial health. Your future self will thank you.

Important Disclosures and Requirements

Customer Consent to Receive Account Information Electronically

The Electronic Signatures in Global and National Commerce Act requires your consent to receive certain disclosures electronically. Please read this section carefully and retain a copy of this document for your records.

ELECTRONIC RECORDS

Some communications and disclosures with and by RefiJet.com on its behalf and on behalf of participating banks, finance companies, and credit unions (hereinafter called “Lenders”) are conducted electronically. However, if you wish to obtain a paper copy of any disclosure to your offer and/or loan/finance offer request, you may write to Yield Solutions Group, LLC (dba RefiJet.com) at 7555 E. Hampden Ave., Ste. 500, Denver, CO 80231. We will not charge you a fee for a paper copy of the Disclosures you request. RefiJet does not provide any Lenders’ disclosures.

RefiJet.com reserves the right, in its sole discretion, to stop providing Disclosures electronically. RefiJet.com will provide you with notice of any such termination as required by applicable law. If RefiJet.com chooses to stop providing Disclosures electronically, RefiJet.com will send any future Disclosures to you in paper form.

YOUR CONSENT IS REQUIRED

The applicant and any co‐applicant (collectively, “you”) must consent to receive Disclosures electronically in order to complete the loan/finance offer request process with RefiJet.com on behalf of its participating Lenders (as defined above). Your consent will apply to Disclosures you receive from RefiJet.com, its successors and assignees, and any Lenders. You may withdraw your consent for receiving electronic Disclosures by notifying RefiJet.com at Info@RefiJet.com. Since RefiJet.com is structured to provide some loan/finance offer request related information electronically, not consenting, or withdrawing your consent to receive electronic Disclosures may terminate your loan/finance offer request process. You may withdraw your consent to do business electronically with our participating Lenders at no cost to you. You may do so by contacting the Lender at the mailing address, e‐mail address or telephone number they provide to you separately for such purpose.

CONSENT TO RECEIVE DISCLOSURES ELECTRONICALLY

In order to use this service, you must consent to receive disclosures including but not limited to the Terms of Service and Privacy Notice electronically and you agree that these electronic disclosures will be sufficient as a “writing” under applicable law.

If you have access to this website, you have suitable hardware/software to access and retain electronic documents.

This consent is valid until revoked by either party.

Please notify us at 1.800.260.5355 if your contact information changes at any point in the refinance process.

MONTHLY PAYMENT REDUCTION CLAIM**

This average monthly auto loan payment savings reflects loans where the borrower chose to lower their monthly payment. Not every auto refinance is intended to lower monthly payment. These savings are not guaranteed. Individual savings and rates may differ.

2018‐10‐08 02:30PM MST