What we know about auto loan refinancing
Data-driven insights based on real refinance data. These patterns help you understand what's realistic before you calculate.
Most people who refinance save $80–$220/month
Based on thousands of refinances, the average monthly savings falls in this range. This accounts for variations in:
- Loan amounts (smaller loans = smaller absolute savings)
- APR improvements (larger gaps = larger savings)
- Term changes (extending term can reduce payment but increase total cost)
- Fees (higher fees reduce net savings)
Note: This is based on aggregate data from Autokima's analysis engine. Individual results vary based on your specific loan terms, credit profile, and market conditions at the time of refinancing.
If your APR is above 9%, refinancing is often possible
Current market rates are typically lower than 9%, making refinancing a viable option for many borrowers. However, eligibility depends on several factors:
- Loan-to-value ratio (LTV) - typically needs to be below 120-130%
- Loan age - many lenders require 6-12 months of payment history
- Credit score - current credit profile matters more than at origination
- Vehicle age and mileage - newer vehicles with lower mileage qualify more easily
Note: Market rates change frequently. This threshold is based on typical market conditions. Always check current rates when considering refinancing.
82-month loans are the hardest to refinance early
Longer loan terms often have higher balances relative to vehicle value, creating challenges for early refinancing. Here's why:
- Slower equity build: With longer terms, more of each payment goes to interest, so principal (and equity) builds more slowly
- Higher LTV: Higher balances relative to vehicle value mean higher loan-to-value ratios, which many lenders won't accept
- Depreciation: Vehicles depreciate faster than you pay down the loan in the early years of long-term loans
Note: This doesn't mean it's impossible—just that it typically requires more time or a significant APR improvement to make it work.
Refinancing typically becomes viable 6-12 months after purchase
After this period, loan-to-value ratios usually improve enough to qualify. Several factors contribute to this timeline:
- Payment history: Lenders want to see consistent payment history (typically 6+ months)
- Equity build: As you make payments, your loan balance decreases while the vehicle value stabilizes, improving LTV
- Credit improvement: If your credit has improved since purchase, you may qualify for better rates
- Market conditions: If market rates have dropped, refinancing becomes more attractive
Note: This timeline varies based on your down payment, loan term, vehicle depreciation, and market conditions. Some borrowers may qualify sooner or need to wait longer.
About this data
These insights are derived from Autokima's analysis of thousands of loan refinancing scenarios. The data reflects patterns observed across:
- Various loan amounts, terms, and APRs
- Different vehicle types, ages, and values
- Multiple credit profiles and market conditions
- State-specific regulations and fee structures
Important: These are general patterns, not guarantees. Your specific situation may differ based on your loan terms, credit profile, vehicle, and current market conditions. Always use Autokima's calculator or consult with lenders to understand your specific refinancing options.
For a personalized analysis, use our loan analysis tool.
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Loan-to-value explained and why it affects refinance.