Saving the Finance Charge on an Auto Loan

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Saving the Finance Charge on an Auto Loan

Submitted by: anonymous 03/02/2009 11:02 AM

We had financed a car through the dealer, which meant paying 5% interest for the duration of the loan (approx. $50/mo.).

I opened a 0% percent interest rate credit card, transfering the balance of the auto loan to it. All I had to pay was $50 for a transfer fee. I make the same payment amount as I did on my orginal car loan.

Once the 0% interest rate ends (in 12 mos.), I'll transfer the balance to another card. In the mean time, I'm saving $50 a month on interest.

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Comments:

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There are risks to this strategy. Credit card companies are going through enormous turmoil at the moment. Many card companies are raising rates, changing terms, Amex is even paying people to close their accounts.

There is a risk here that you transfer debt to a zero percent credit card and then to another card only to see them change terms or raise rates.

As long as you understand the risks and have contingencies, such as having enough savings to handle paying off the debt if you have your interest rate is jacked up on you, then it is pretty smart move and good use of credit.

Posted by Ray @ Tip Hero on March 02, 2009 6:19 PM

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I have a citibank driver's edge card. I pick up $400 a year that accummulates for 3 years. I buy any car, new or used, mail in a copy of the contract and I get a check for $1,200. I've done that twice already. No hassle. You just have to remember you have the card. This will also work for cars of immediate relatives. I only buy a car every 10 years, but with stagger buying cars with the kids and collect every 3 years or so. I use the car for convenience and pay it off every month automatically through checking. I probably charge $20,000 a year because I use it for everything like food, car insurance, etc.

Posted by james77777 on March 14, 2009 12:41 AM

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How to best refinance your auto loan with low rates Refinancing a car loan might come across as a strange idea. You might think that refinancing only works on houses. The fact is that banks and finance companies will refinance anything of value.

Posted by auto loan rates on June 18, 2009 5:28 AM

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