Auto loan refinance question?

It sounds like you only have another year to pay on your 16.3% loan. You really didn't provide that very valuable piece of information.

If that's the truth, you'd be crazy to refinance for another 4 years. The thing is that you've paid off most of the interest due on the loan you now have. Auto loans are front loaded, so for the first 2 or so years you are paying mostly interest and hardly any toward the loan itself. If you have only 1 year left to pay on that loan, you're only paying a very small percent of interest for the last year and most of that $240/month payment is going toward paying off the loan itself.

When you refinance for another 4 years a 9%, you are paying off what you owe on the car (which you would be paying off in about a year under the old loan) plus interest on that amount amortized over the next 4 years. You'll pay about a thousand dollars in interest under the NEW loan so you'll end up paying back $7,000 on a $6,000 loan. If you remain on your current plan, you'll pay back $6,000 on a $6,000 loan, saving you a thousand bucks That leaves about 17% more money in your pocket at the end of the day.

Everyone thinks they will pay additional principal or double up payments, but the reason lenders LOVE to refinance at lower rates is that it's a fact that most never do that. Other things come up all the time and you'll never end up paying it off early (or not early enough to offset all the interest they front load in to the loan).