Buy a car or refinance a loan?

For a purchase, begin with an itemized vehicle price: car, taxes, registration and any optional products. Subtract the down payment and agreed trade-in credit to identify the amount financed. For refinancing, begin with a dated payoff quote from your current lender instead. These are different starting points. The purchase decision is about acquiring a vehicle at an acceptable total cost; the refinance decision is about replacing one debt with another on better terms for your goal.

What makes this option different

Read a rate discount correctly

A reduction of 0.25 percentage points would change an illustrative rate of 8.00% to 7.75%; it would not turn an 8% rate into 6%. Request the final APR after all eligible conditions, plus any associated account costs. Then compare that complete proposal with another quote. If automatic payments are part of the agreement, ask how the discount is affected if you change the payment account or stop the arrangement.

Worked example: a smaller payment, more interest

Illustration only, not a Fifth Third offer. Assume $20,000 borrowed at a fixed 8% annual interest rate, monthly amortization and no fees. Figures are rounded.

The longer schedule lowers the monthly amount by about $137.60 but adds roughly $1,811.46 in interest. That tradeoff may matter more than a small rate discount. Use your actual quote for the same comparison; different fees or repayment mechanics will change the result.

A refinance worksheet that answers the right question

Write three lines: the old payoff amount, the old remaining payment total and the new total repayment including costs. Compare the old remaining term with the proposed new term. Do not compare the original loan’s full lifetime interest with a replacement loan beginning today. You have already paid part of the old agreement. If the new monthly payment frees up money, decide how you will use that room before accepting extra years of debt.

Who should prioritize this comparison?

A borrower with an existing loan should review refinancing when a current written proposal creates a useful change in cost or payment structure. A buyer should focus first on purchase price and ownership costs. Neither decision should depend on a promise of approval. If you are outside the United States, a US product page is a research reference rather than proof that you can apply from your country. Establish the eligible market before preparing documents.

Strengths and limitations

Keep the dealer quote easy to read

Ask for one price breakdown without optional extras and a second showing any extras you want. Identify service plans, insurance products and other additions separately.

A product you would not buy with cash should not become invisible inside a loan payment. If a trade-in is involved, record its value and the balance still owed on it. Borrowing to cover an old balance changes the starting position of the new car loan.

Payment timing and your outstanding balance

Treat the due date as part of your repayment plan. Establish which day funds leave your account, how additional principal payments are handled and where to request an accurate payoff figure.

Keep an emergency buffer in the payment account. Paying more only helps as intended when the lender applies it under the contract’s rules. Ask for the process instead of assuming an extra transfer automatically changes the repayment schedule.

Build the ownership budget around the car

Before signing, obtain an insurance estimate for the exact model and consider fuel or charging, servicing, tires and registration. A $350 loan installment does not mean the vehicle costs $350 per month to own.

List these expenses beside your other commitments. If a repair would make the next payment difficult, change the vehicle price or borrowing plan before relying on a longer loan to make the installment look comfortable.

Prepare for the next conversation

• Have the vehicle price or dated payoff quote ready.
• Request the final APR, fees and full payment schedule.
• Ask about discount eligibility and whether offers can be combined.
• Confirm the available purchase or refinance channel for your location.
• Read early-payoff and additional-payment terms before signing.

You can gather these questions without submitting an application through this website. Share identification and financial documents only through the bank or dealership’s verified process.

Frequently asked questions

Visit the official provider

Use the provider’s current product information to confirm availability, terms and the next step. This button does not submit an application or make a payment.

›VISIT THE OFFICIAL AUTO FINANCE PAGE

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Make the decision with a written comparison

Choose the proposal that serves the goal you identified at the start. If the objective is less interest, inspect remaining total cost. If it is payment flexibility, understand the price of extending repayment.

If it is buying a car, make sure the vehicle itself fits the budget. Keep the written quote and the conditions that produced it; a headline discount is not a substitute for the agreement you will actually sign.

Sources and review

Provider information checked on October 3, 2026. Examples and worksheets are original editorial illustrations, not provider offers. Conditions can change.

• Fifth Third: auto loans and financing