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How long should I wait to refinance a car loan?
I took out a loan to purchase my dream car, and I’m thrilled to finally buy it! I took out a loan with the dealership because I got some bonus cash. Now that I have the cash, I want to refinance the car with a better interest rate. Can I refinance a car loan immediately after purchasing a car?
Phoebe Mah · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Congratulations on purchasing your dream vehicle! While you can refinance a car loan immediately after buying the car, doing so doesn’t always make sense, especially if you have negative equity. Instead, consider waiting a couple of months to
refinance a car loan
.According to personal finance experts, the recommended time to refinance is at least six months to one year. Whatever your financial situation is, this period will allow you to build your credit and develop a history of making on-time payments.
If you have established credit, building credit isn’t nearly as important. Instead, you need to worry about your equity. If you have positive equity, refinancing shouldn’t be an issue. However, negative equity can make the process difficult. You may have to find a lender willing to do a higher loan-to-value ratio than 100%.
If you want to save more money on top of your refinancing, make sure to download the Jerry app to compare car insurance policies. As a licensed broker,
Jerry
helps you find and compare quotes from over 50 top providers in minutes. When you find a better rate, Jerry can help you buy your new coverage and even cancel your old policy!View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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