To refinance or not to refinance? That is my question.

At what point does it become advantageous to refinance my car loan?  馃殫

Some background details: I'm sitting around approximately $6500 outstanding balance right now. The original loan was in 2017 for around $13000, and my monthly payment is $213.27.  The loan is in my now ex-husband's name, and I'm an authorized user who makes the payment each month. He has attempted multiple times to take the car away from me (and actually succeeded last year for a few months - long story) because it's in his name and our divorce was less than amicable, to say the least.

I got my car back, but if I'm unable for whatever reason to make the payment I could risk him repossessing it again as long as it's in his name. I couldn't get it financed on my own during the divorce because my credit was awful and the loan balance was around $8000 at the time. Since then, I've worked really hard to restore my credit and I've even managed to get a month ahead on my bills. I'm still not quite to the point where I could get approved for the loan (credit is currently between fair and average) so it would be at least another year before I could get the financing. I'm just wondering if I should eventually refinance in my name and lower my monthly payment, or just continue to pay it off at the current rate while in my ex's name.

Has anyone else been in a similar situation? What would be the smartest thing to do in my case? Feedback greatly appreciated.

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  • What was spelled out in the divorce agreement, both for the asset (car title) and the liability (car loan)?

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      • Violet Rain
      • ElectroNecroMancer
      • Violet_Rain.3
      • 1 mth ago
      • Reported - view

      dakinemaui - it stated that I would continue to pay the monthly car loan payment as it is, unless I could provide my own financing within 90 days of the divorce being finalized (at the end of 2018) or pay off the outstanding loan balance in full, in which case the title would be transferred to me. Of course the 90 day window has long since passed, but last year we signed an agreement stating that I would pay the loan each month, and if I was ever more than 7 days past the due date then he could legally repossess the vehicle. But the option to obtain my own financing has always been there. He would actually prefer that, since the loan would no longer be in his name or affect his credit. And he would hand over the title to me in the event that I either got it refinanced or paid it off in full.

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      • dakinemaui
      • dakinemaui
      • 1 mth ago
      • 1
      • Reported - view

      Violet Rain Pick your poison: refinance (fees and likely higher interest) or continue to take the chance your ex could repossess the vehicle. Which do you dislike less?

      You might look into a credit union. If your normal finances have improved (and some funds are kept in that institution), you may qualify for a loan on better terms. (Some of them may only require a savings account with a minimal balance.)

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      • Violet Rain
      • ElectroNecroMancer
      • Violet_Rain.3
      • 1 mth ago
      • Reported - view

      dakinemaui That's a good idea! I'm trying to keep in mind that I won't be able to take any action on this for at least another year, and a lot could change in that time. I've been a member of USAA for 20 years now (ex and I are USAF veterans) and I've historically been able to get some decent financing rates through them for previous vehicles. The current loan is through Wells Fargo, which neither of us have an affiliation with but it was offered by the dealership (the car was previously owned, and admittedly it was somewhat of an impulse buy, but that's neither here nor there now). 

      To answer your question, I'm okay with abiding by the current arrangement in the meantime. I'm finally starting to get my ducks in a row, and I recently added the car loan to my bill pay so I won't forget to pay it. The reason why he gave the car back after taking it last year was because he'd just financed a shiny new Dodge Challenger and couldn't afford two car payments. Mid-life crisis, much? 馃檮馃槃 So I don't think he's too eager to assume financial responsibility of my car again anytime soon. But with a narcissist, you never know...

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