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I'm looking to refinance my car loan. However, it's 2012 and my car is a 2004. Bank after bank is refusing to even let me apply if my car is over 7 years old. Is it even possible or am I stuck with the high rate the dealer found for me when I had no credit?

ETA: I owe a little over $12k on a 2004 Chevy Impala at 14% APR

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    If you still have a loan outstanding after 8 years, you are more than likely upside-down on the loan: owing more than the car is worth. If you bought a used 2004 model car a year or two ago and the current loan is not that long-lived, it is still possible that you are upside down. It is possible, though not very easy, to get a loan on an older car, but the amounts that you can get will be much smaller than the retail value of the car,
    – Dilip Sarwate
    Commented Mar 17, 2012 at 16:54
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    @f1StudentInUS It used to be that 3 years was the standard period for a car loan, but as prices went up, the loan period extended to 5 years. Many people are upside down towards the end of the period. Note that it is not quite as easy to assess the value of an old car; the blue book values are merely guidelines, and a bank wants to be sure that if it needs to re-possess the car and sell it, it will get its money back. If you can afford to get a three-year loan, it is far better than spreading out the payments over five years.
    – Dilip Sarwate
    Commented Mar 17, 2012 at 21:16
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    @f1StudentInUS See also this discussion where the OP has a (truck) loan of $30K to be paid off in seven years and it is in part responsible for him finding it difficult to do what he wants to do. To answer your question, I think that five-year car loans are a bad deal for the car owner.
    – Dilip Sarwate
    Commented Mar 17, 2012 at 21:29
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    If you can afford it, pay off the loan as quickly as you can. Read your loan agreement to see if there are prepayment penalties, and how they treat additional payments (usually badly if the dealer arranged the loan for you). Maybe once you have enough savings to afford it, pay off the loan in one lump sum. I doubt you can get a refinance of a loan on a 2004 model car.
    – Dilip Sarwate
    Commented Mar 18, 2012 at 18:01
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    @DJClayworth Is continuing to chastise me really productive at this point? You've made your point. I was foolish and unworthy of even bothering to ask on this mighty site. Do you have a delorean I can borrow? No? Then I just have to keep moving forward from here.
    – Yamikuronue
    Commented Jul 27, 2012 at 11:28

4 Answers 4

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Going through the comments, I guess there is an answer in the comments, and noboday has put it. So just putting up an answer.

The Black book value of 2004 Impala [highest trim model] is about $7000. Hence Banks will not lend you $12,000 secured loan on it.

Plus as you mentioned No Bank is allowing you to apply for a loan, Banks have their own policies and you cannot force them.

Options:
- Try getting a loan from friend / relative, if they agree to it, offer a rate of 6-7% to them, this may enable to you pay off the loan faster.
- Check if you are getting a personal loan at cheaper rate.
- See what is the best sale value you can get for your car ... if its close to the loan, you can sell it off now and then buy another cheaper used car at lower interest rate.

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If your credit has improved, the other alternative is an unsecured loan.

My credit union offers personal loans up to $10k at 10%. Citibank routinely offeres balance transfers around 3-5%.

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The actual answer, as it turns out, is that nobody will even look at refinancing the loan on a car 8 years old. 8 years is apparently the cutoff point for "too old to get a loan". I could get a loan when it was 7, when I bought the car used, but can't refinance six months later.

(in my case, I've had to juggle my medical bills around and work on consolidating my student loans so I can pay off the car loan faster. I'm also looking at increasing my income.)

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  • This is not really true. You can get loans on these cars but you are not going to find one willing to refinance your underwater loan. You could get one if you can get your loan amount under ~5k.
    – user4127
    Commented Aug 14, 2012 at 16:58
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One option that may work is to apply for an unsecured loan, for the purposes of "consolidating existing debt", then using the unsecured loan to repay your car loan.

The interest rates might not be as favourable compared to a secured loan, but are likely better than 14% APR.

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