Should I Refinance My Car During a Recession?

Refinancing a car during a recession could be a good idea, but your personal situation will determine if auto refinancing makes sense for you.

A recession — defined by the National Bureau of Economic Research as a significant decline in economic activity spread across the economy and lasting more than a few months — is never good news for businesses or consumers. According to the traditional definition, the U.S. isn’t currently in a recession.

During a recession, business cutbacks result in higher unemployment, reductions in employee hours and lost income. As a result, many people must find ways to reduce monthly household expenses, such as refinancing a car loan to reduce the monthly payment.

Is it possible to lower car payments during a recession?

If you can refinance to replace your current auto loan with one that has a lower interest rate or longer repayment term, it’s possible to reduce a car payment — recession or no recession.

Lowering your interest rate

Leading into a…

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This article was written by Shannon Bradley and originally published on www.nerdwallet.com