Need Refinancing Help

JimG · January 16, 2005

Hi All,

Here's the deal: Since Geico started writing auto insurance policies in NJ, I've been wanting to get one. It's significantly cheaper than Allstate with the liability amounts and other parameters. But there's a problem. To qualify for the GM employee discount we had to put my truck in my dad's name. Right now my truck is 3 years away from being paid off. I have a 5 year financing plan with GMAC with 3.90% APR. If I want the insurance in my name, I need to pay off the truck now. GMAC will not switch my name (co-buyer) with my dad's name (buyer). So I'm looking at refinancing with Capital One. The interest rate for 36 mo. is 5.39% APR, 2% higher than what I have now. Trying to decide if this is a good idea or not or if I should spend another 3 years under Allstate.

Anyone got any experience with refinancing? Any comments or suggestions much appreciated!

Thanks!

dewfpo · January 16, 2005

Find one of the thousands of online amortization spreadsheets and plug in the new interest rate and what you currently owe on your truck. Then compare your current payment with the new payment numbers and see how much more the refinancing is going to cost you over the next 3 years and see if it is more or less then you will save by switching to the new insurance company. It should become very obvious once you run the numbers.

DEWFPO

cokedrvrbjw · January 16, 2005

You could lower your payment by A LOT! If you wanted to go for a longer term. Its all in what you want...by refinancing...you wont save money overall...ecspecially with the 3.9. You maybe able to take the loan over through GM and keep that rate. Give them a call and see if you can take over the payments by yourself (under you own name).

apache sierra · January 17, 2005

Did you go through a dealer to get your truck? If so are they a broker dealer? A lot of times you can get the sweet deals from GM and then refinace through the dealer if he is a broker for the same interest rate or at least close enough to keep the same payment schedule. That way you can finance in your name(if you qualify) and then get the geico insurance. Just be sure that the insurance doesn't go up with you as the principal driver(age accidents etc) that would offset any savings you might think your getting

JimG · January 17, 2005

dewfpo,

Working on that now - unfortunately I'm a tech guy not a financial guy so it's taking me a while to figure all this out. Starting to get the hang of it though.

cokedrvrbjw,

So far GM won't switch names but I didn't think about refinancing with them. Interesting idea and worth the 10-15 minute hold time with them.

apache sierra,

Don't think the dealership is a broker - but I guess I could call and ask. It's Green Brook Pontiac GMC in Green Brook, NJ. As for the geico insurance, it's definitely cheaper. Even if it went up $100 it's still way cheaper. Plus I'm waiting til I'm 25 because then the insurance rates drop. Somehow they think when you reach 25 you get wiser or something.

mcreyaufmiller · January 17, 2005

You should not have to worry about whos name is first on the note. My wife's car is financed in hers and her mothers name. The insurance is just in her name. The insurance companies should not care who's name the truck is in, just as long as they get thrie money.

JimG · January 19, 2005

Ok, first off, let me say I get more good advice from everyone on this board than from my parents. I figured they knew what they were talking about with this whole thing so I believed them and that's why I was asking about refinancing. Turns out they're 100% wrong and mcreyaufmiller is right - Geico couldn't care less who the buyer is. Unfortunately, they do care about who the registered owner is - right now, not me. D'OH!!!!!

So tomorrow I'm going to attempt to deal with NJ DMV and see if I make progress. Geico said if I can get that switched, it's smooth sailing - no refinancing required