You need to make a couple of calculations to get an accurate answer to your question. What is the interest rate on your current loan? Using an amortization schedule which you can find on a Google search, how much of your current payment is going to interest payments and how much to reducing the loan balance? If you refinance, what will the interest rate be on the new loan? Plug that number into the amortization spreadsheet along with the terms of the loan and see which alternative makes the most economic sense. Remember that used car loans will carry a higher interest rate than a new car loan. You may be better off working the amortization table with your current loan and adding a little to your present payment each month if you can afford it. And if you push out your payoff date on your loan, what shape will your car be in? Are you saving money now to use for bug repair bills later? Good luck with your calculations!
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