Can I Refinance A Car Not in My Name?

by Anonymous
(Somewhere in the United States)

Question: Can I refinance a car not in my name? My dad bought me a car when I graduated college at a very high interest rate. He is still the registered owner of it. He does not have good credit, but I do now.

Any chance that I can refinance it since I am on the insurance or would it have to be him only? What can I do in this case to lower my monthly payments?

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Answer: Under the circumstances, you wouldn't necessarily be refinancing the car, but you would be buying the car from your dad.

A credit union would probably be your best bet here, because I am assuming that although your credit may be good it is probably limited. Credit unions are typically much easier to work with in these situations vs. traditional banks.

One thing you may need to be aware of is negative equity in the car. Since your dad's loan is at a high rate, it may be the case that more money is owed on the car than it is worth. If this is the case, the lender will definitely let you know and you may need to put some money down.

In addition, credit unions will almost always base your interest rate off your credit score, so be sure that yours is at least above average or the refinance/purchase may not even be worth your time at this point.

If you have a 640 credit score or better, you can expect to get approved from anywhere in the range of 4% (depending how high your score) to 12% if approved.

With a 580-640 credit score, you can expect to be in the 12-18% range if approved.

Score alone does not guarantee an approval however so be sure to review your credit to see if there are any bad things there that you may not have known about. A lot of credit unions will make customers pay off collection accounts prior to funding a new loan.

After you've gotten your credit score (you'll need to know it to check rates accurately), give Money Aisle a try, as they work with a couple of hundred lenders (many are credit unions) nationwide that may be able to help.

Hope this helps,

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