When it comes to financing your car, do as I say and not as I did—-I offer this advice with great humility. Why? Because, when I bought my first car in 1995, I thought a 20% interest rate on a car loan was a good deal. As a young man earning low wages with a limited credit history and no co-signer, I thought I was lucky to be able to secure a car loan so I could get to school and work every day on time. An accountant, who later became my wife, opened my eyes to the extra money I could save by refinancing my loan. She knew that the money we would save each month could go toward our dreams of someday owning a home and educating our children.
So why do I bring this up some 26 years later? Because I and Midwest BankCentre, where I serve as Chairman and CEO, believe that access to reasonably priced capital is a right we all deserve. We know that traditional credit scores can at times leave people behind.
Many people simply do not realize they can refinance their car loans. While 62 percent of auto lenders offer refinancing, less than half of buyers know refinancing is an option. Only 12 percent of car buyers have ever refinanced an auto loan.
For many consumers, particularly those who have challenges accessing reasonably priced credit, the money saved can have a REAL impact on their lives. Each year, approximately $400 billion in auto loans are originated, contributing to a total market of $1 trillion in such loans. Refinancing could capture up to $20 billion of that annual market, money that goes directly back into the hands of the borrowers. What does this mean to borrowers, particularly those who may have less than ideal credit? It means that by refinancing, they can often save up to 15% on their car payment, or $75 per month.
This is all part of the firmly held believe that we can all RISE TOGETHER and that a democratized approach to access to capital and opportunity will help us achieve shared prosperity. I believe that we can close the wealth gap by providing a place at the starting line for everyone. I believe that one’s agency should determine how fast and far they will go—not their zip code, not the color of their skin, not their credit score. By providing access to reasonably priced capital, Midwest BankCentre is living into its purpose to help our regional communities thrive.
For many, the purchase of a car is their first major purchase and is one of their biggest monthly expenditures. Please learn from my mistakes. If you suspect you might be overpaying for your car loan, one of my associates would be happy to help. Our new program is particularly helpful to customers whose credit score has improved since a car or truck was purchased, those who were put in a loan by a selling dealer at a rate that is higher than the rate for which they may qualify and those who want to lower their monthly costs by extending the length of the loan. You check your rate in minutes without impacting your credit score at www.midwestbankcentre.com/auto.
