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Published: Aug 03, 2022 28 min read
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Best for Fair Credit
Best MarketplaceRunner-Up for Best MarketplaceBest for Low Credit ScoreRunner-Up for Best for Fair Credit
CaribouLendingTreeRATEGENIUSAuto Credit ExpressmyAutoloans
Our PartnerOur PartnerOur PartnerOur PartnerOur Partner
Company Highlight

Compare rates without a credit check or inputting your SSN

APR starting at 1.99%

About 200 lenders in its marketplace

Specializes in borrowers with bad credit

Average monthly savings of $150

Maximum Loan Amount

$150K

Varies by lender

Varies by lender

Not disclosed

$150K

Loan Terms

24 to 80 months

36 to 72 months

24 to 96 months

Varies by lender

24-84 months

Minimum Credit Score

580

All scores can apply

All scores can apply, but best for 640 and up

Varies by lender

600

Best for Fair Credit
Caribou
Our Partner
See Rates
Company Highlight

Compare rates without a credit check or inputting your SSN

Maximum Loan Amount

$150K

Loan Terms

24 to 80 months

Minimum Credit Score

580

Best Marketplace
LendingTree
Our Partner
See Rates
Company Highlight

APR starting at 1.99%

Maximum Loan Amount

Varies by lender

Loan Terms

36 to 72 months

Minimum Credit Score

All scores can apply

Runner-Up for Best Marketplace
RATEGENIUS
Our Partner
See Rates
Company Highlight

About 200 lenders in its marketplace

Maximum Loan Amount

Varies by lender

Loan Terms

24 to 96 months

Minimum Credit Score

All scores can apply, but best for 640 and up

Best for Low Credit Score
Auto Credit Express
Our Partner
See Rates
Company Highlight

Specializes in borrowers with bad credit

Maximum Loan Amount

Not disclosed

Loan Terms

Varies by lender

Minimum Credit Score

Varies by lender

Runner-Up for Best for Fair Credit
myAutoloans
Our Partner
See Rates
Company Highlight

Average monthly savings of $150

Maximum Loan Amount

$150K

Loan Terms

24-84 months

Minimum Credit Score

600

The best auto refinance companies offer transparent, reliable service to consumers looking for competitive rates from a variety of lenders, including banks, credit unions and non-depository financial lenders.

Your potential savings will be determined by multiple factors — credit score, annual income and the outstanding amount of your current loan — and the importance of each will depend on the individual auto refinance company.

Read on to see our top picks of 2022 and learn how to get the best loan terms that fit your needs.

Our Top Picks for Best Auto Refinance Companies

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Refinancing Your Auto Loan Could Lower Your Monthly Payments
An Auto Refinance Loan is a secured loan used to pay the existing balance on a current car loan. Click on your state to get started!
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Best Auto Refinance Company Reviews

Why we chose it: We chose LendingTree as best auto refinance marketplace because, among its approximately 40 lenders, some will consider borrowers with credit scores in the low 500s.

Pros
  • Quote request form takes less than five minutes
  • Marketplace includes approximately 40 lenders
  • Serves a wide range of credit scores
Cons
  • Minimum loan balance for refinancing is $8,000
  • No 24-month loans; terms start at 36 months
  • No set loan amount range; this varies by lender
HIGHLIGHTS
Loan Amounts
Varies by lender
APR Rates
Starting at 1.99%
Loan Terms
36 to 72 months

LendingTree is a marketplace of about 40 lenders where you can compare rates for a wide variety of financial products, including auto refinance loans.

The company’s marketplace covers the full spectrum of credit scores. This means that subprime borrowers — people with scores between 580 and 619, also referred to as poor credit — have a chance at refinancing their auto loan through LendingTree’s network.

We particularly liked LendingTree’s Auto Refinance Rates comparison tool, which allows you to input your zip code, loan amount and estimated credit score, and then get examples of potential auto refinance options with terms between 36-72 months (with several offers for each term).

LendingTree has offered auto refinance since 2010, and the company’s current roster of lenders covers the entirety of the continental U.S.

Why we chose it: RateGenius has the biggest lender network compared to any other auto refinance specialist in our top picks. Its network serves primarily prime borrowers, so we designated RateGenius second for Best Marketplace.

Pros
  • Marketplace includes 200 lenders
  • No limit on existing loan balance
  • Prequalify with a soft credit inquiry
Cons
  • $8,000 minimum loan balance
  • Best for prime borrowers
HIGHLIGHTS
Loan Amounts
Starting at $8,000
APR Rates
Starting at 1.99%
Loan Terms
24 to 96 months

The auto refinance specialist RateGenius is the flagship brand of The Savings Group, which includes auto finance companies Autopay and Tresl. Its 200-lender marketplace includes credit unions, national banks, regional banks and non-depository financial institutions. The abundance and variety of options makes it more likely you’ll find your best auto refinance rate.

RateGenius is best for a prime borrower, meaning someone with a credit score ranging from 640 to 740. However, co-applicants are allowed, which could help boost your chances of being offered the lowest rates.

You can pre-qualify with only a soft credit pull, but you will see a hard credit check once you formally apply with a lender. Approvals are generally granted within 48 hours of submitting all the required information. RateGenius handles the work of paying off your previous lender, too.

Why we chose it: Few companies that refinance auto loans will work with borrowers with bad credit, but OpenRoad connects customers to lenders that accept credit scores as low as 500.

Pros
  • Borrowers with poor credit are encouraged to apply
  • Co-applicants allowed
  • Accepts cars up to 15 years old and with 160,000 miles
Cons
  • Rates and terms for bad credit borrowers are less favorable
  • No add-ons
  • No lease buyout
HIGHLIGHTS
Loan Amounts
Starting at $8,000
APR Rates
Starting at 2.4%
Loan Terms
36 to 84 months

OpenRoad regularly works with customers with low credit scores (below 600) who have been rejected by other lenders. This company takes the “declines,” says OpenRoad representative Justin Helms, and there are agents available for anyone with questions or in need of guidance.

OpenRoad accepts cars up to 15 years old, which is considerably more flexible than the 10-year industry average. There’s more leeway in mileage, too: Most companies won’t go beyond 150,000, but OpenRoad accepts autos with up to 160,000 miles.

Co-borrowers are also welcomed, and if the person signing on along with you has good or excellent credit, this can bump up your chances for a favorable auto refinance offer.

Why we chose it: AutoPay connects subprime borrowers to lenders, which can be a great way for those with bad credit to find low rates and, through consistent on-time payments on their refinanced loan, ultimately improve their credit scores.

Pros
  • Lender network works with all credit levels
  • Approval rate of 90%
  • Co-applicants allowed
Cons
  • Rates and terms for bad credit borrowers are less favorable
HIGHLIGHTS
Loan Amounts
Starting at $8,000
APR Rates
Starting at 2.99%
Loan Terms
24 to 96 months

Autopay is another brand under The Savings Group — along with Tresl and RateGenius. Customers with low credit scores will find more auto refinance options through this company than most, but the conditions (rates and terms) will be less favorable than those offered to prime borrowers. Still, Autopay provides opportunities for those looking to refinance their auto loans while they continue to work on improving the health of their credit.

Cash-out refinance loans and lease buyouts are also part of Autopay’s offerings. Co-applicants on loan applications are also allowed, which is another route to potentially scoring a better offer from its network of lenders.

Like with the other two Savings Groups brands, once your auto refinance loan is approved and processed, Autopay works with your previous lienholder to ensure the lease is paid off.

Why we chose it: Caribou’s minimum credit score requirement stands at 580, but most of its customers have a score of 630, which falls in the range of Fair Credit. The company’s marketplace of lenders provides stellar rates for borrowers in this category.

Pros
  • Compare rates without a credit check or Social Security number
  • Pre-qualify without impacting your credit score
  • Multitude of add-ons available
Cons
  • Not available in Mississippi, Maryland, Nebraska, Nevada, Wisconsin, or West Virginia
  • No auto lease buyout option
  • Processing fee of $399 for loan closing
HIGHLIGHTS
Loan Amounts
$5,000 - $150,000
APR Rates
Starting at 2.32%
Loan Terms
24 to 80 months

Caribou is a fully online network of lenders, principally credit unions and community banks, where borrowers can access a wide range of partner lenders that refinance auto loans.

Pre-qualification, which only requires a soft credit check and no Social Security number, can provide multiple offers in minutes. Borrowers can apply with a minimum annual income of $24,000 and a credit score of at least 580. However, rates may be as high as 36% for customers with low credit. The good news is that Caribou does permit co-borrowers, which could increase your potential savings if that co-borrower has good to excellent credit.

Caribou has a network of auto insurance lenders for car owners who want to change their insurer or add extras to their policy. These add-ons include key replacement, total loss protection with a Guaranteed Asset Protection (GAP) product, Extended Vehicle Protection and cosmetic care coverage for dings, dents, or more.

Why we chose it: We chose myAutoLoan.com as runner-up for best for fair credit thanks to its competitive rates for auto refinance borrowers with a credit score in the 600s and up.

Pros
  • Compare four loan offers online within minutes
  • Online application takes only two minutes to complete
  • Average savings of $150 per month
  • Rates start at 1.99% for borrowers with excellent credit
Cons
  • Not available in Alaska or Hawaii
  • Maximum vehicle mileage of 125,000 miles (or 120,000 miles for private party loans)
  • Some lenders may charge fees or a down payment
HIGHLIGHTS
Loan Amounts
$5,000 to $150,00
APR Rates
Starting at 1.99%
Loan Terms
24 to 84 months

For the best offers and most competitive rates, myAutoLoan.com recommends a credit score of at least 600. The bulk of its customers, company representative Staci Bailey tells Money, have FICO scores ranging from 620 to 680. Borrowers should also have a monthly income of at least $1,800 per month.

The company’s Auto Loan Interest Rate Calculator can give you a good idea of what your APR might look like, and you can use this tool without providing any personal contact information that could result in communication from myAutoLoan about potential offers.

When a customer fills out myAutoLoan’s prequalification form, the four offers they receive are guaranteed as long as all of the information you’ve provided is accurate. The rates and terms shown are not just prospective situations but solid offers. This is because, as Bailey explains, myAutoLoan is integrated directly with each lender’s specific loan origination system.

The annual percentage Lease buyouts and cash-out refinance are also part of myAutoLoan’s offerings. For qualified borrowers, a payment deferral of up to 90 days is possible too.

Why we chose it: We chose LightStream as best auto refinance for any kind of vehicle because it places no restrictions in terms of make, model, year, or mileage.

Pros
  • No restrictions on car mileage, year, make, or model
  • No fees or prepayment penalties
  • Co-borrowers permitted
  • Longer terms (up to seven years)
Cons
  • Excellent credit required
  • Hard credit check required to apply
  • No cash-out refinancing options
  • Must have a Visa or MasterCard credit card for identity verification purposes
HIGHLIGHTS
Loan Amounts
$5,000 to $100,000
APR Rates
Starting at 3.99%
Loan Terms
24 months to 84 months

LightStream is one of the few lenders with no vehicle restrictions on its auto refinance loans. There are no limitations in terms of vehicle age, make, model or mileage, so customers can refinance new, used and even classic cars. LightStream also works with other vehicles, like motorcycles and ATVs.

This flexibility is possible because LightStream offers unsecured loans. This means you’ll keep your vehicle title, unlike when purchasing a secure loan. LightStream representatives explained to Money that the company is underwriting the borrower, not the vehicle.

The company’s annual percentage rate starts at 3.99%, which reflects enrollment in autopay. You can get an idea of your potential rate using LightStream’s online rate calculator.

A bonus in working with LightStream is the lender’s commitment to social responsibility. Through its partnership with American Forest, LightStream plants a tree for every loan funded.

Why we chose it: DCU works with borrowers who don’t have strong credit histories. The credit union has representatives to help steer the loan process, which is particularly helpful if you’re new to auto refinance and want guidance.

Pros
  • New-to-credit program available
  • Few vehicle restrictions
  • No make, model, or year restrictions on vehicles
  • Easy membership process: Open a savings account with a minimum of $5
Cons
  • Direct deposit required for APR discount
  • Electronic payments required for APR discount
HIGHLIGHTS
Loan Amounts
No minimum, max $500,000
APR Rates
Starting at 3.24%
Loan Terms
12 to 84 months

A fully digital auto refinance experience can be a plus, but for some borrowers, some guidance goes a long way. Digital Federal Credit Union, known as DCU, offers personalized help for auto refinance shoppers who have little-to-no credit history. This can include a phone call from a representative who might suggest adding a co-borrower.

Annual percentage rates start at 3.24%, although this rate will be higher if the customer does not sign up for electronic payments and direct deposit to a DCU account. An extra discount of 0.25% is available to vehicles considered energy efficient, like electric vehicles or cars with a 35 mpg average. Additionally, a 60-day deferment on the first payment is standard for any DCU auto loan refinance.

DCU also works with motorcycles, boats, RVs and ATVs, plus salvaged vehicles, though these do require an appraisal and further investigation. The credit union’s mileage maximum is 200,000, which is a bit higher than other companies — another factor we appreciate about refinancing an auto loan with DCU.

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Other Auto Refinance Companies We Considered

Lendingclub

The online bank LendingClub almost made our top picks: its annual percentage rate starts at 1.99% and, while its average customer has a FICO score close to 700, the company works with lenders who’ll consider scores in the low 600s. (These numbers were provided to Money by a representative).

LendingClub didn’t land in our top picks because its average monthly savings claim of $90 is a little lower than other companies.

Pros
  • Annual percent rate starts at 1.99%
  • Loan amount minimum is $4,000 (lower than most companies)
  • No specific income requirement
  • No origination fee, no down payments, no processing fees
Cons
  • No add-ons
  • Not an ideal lender for poor credit borrowers
  • No cash-out or lease buyout
  • Loan maximum of $55,000 is lower than other lenders

RefiJet

RefiJet almost made our top picks for its slightly higher-than-most maximum mileage (150,000), the ability to prequalify with a soft credit pull and its willingness to work with borrowers of all credit tiers. RefiJet isn’t in our top picks only because other companies with even more attractive features bumped it out.

Pros
  • Full-spectrum credit lender
  • Average monthly savings of $150
  • APR starting at 2.74%
Cons
  • Rates for bad credit borrowers are less favorable
  • Full coverage insurance required

Upstart

Creditworthiness with Upstart is determined not only by your FICO score but 1,000-plus other factors, Auto Refinance General Manager Val Gui tells Money. This can improve a person’s chances of acquiring an auto refinance loan, he explains, because its proprietary AI helps lenders better understand the true risk of working with a borrower.

Because Upstart is still relatively new to auto refinance — the 10-year-old company entered this industry less than three years ago — we’ve decided to leave it off our top picks for now.

Pros
  • Loan terms range from 24 to 84 months
  • Lender count is currently 57; majority banks and credit unions
  • No application fees
Cons
  • Potential borrowers get a single best rate, so there's no opportunity for offer comparisons
  • No cash-out
  • No lease buyout
  • No co-borrowers

Auto Credit Express

Auto Credit Express specializes in helping customers with bad credit or recent bankruptcies or repossessions get better refinance loan rates. The company doesn’t provide any information about APR or loan terms on its site, though, and did not respond to requests for an interview with Money. While its positive customer reviews suggest Auto Credit Express is a good option for auto refinance, its overall lack of transparency kept it out of our top picks.

Pros
  • Borrowers with bad credit can apply
  • Some lenders give borrowers up to 60 days before their first payment
  • Excellent educational resources for borrowers looking to learn more about the lending industry
Cons
  • No concrete information available without providing personal identity information
  • Partner lenders may have high interest rates for low credit applicants
  • Requirements, rates and loan terms not available without application

Auto Approve

Because of its potentially low APR rates and broad range of loan terms, Auto Approve almost made our list. However, the company does not share up front its credit score or income requirements for auto refinance loans, and did not respond to inquiries from Money for more information.

Pros
  • APR rates starting at 2.25%
  • Terms from 12 to 84 months
  • No Social Security number required for quotes
  • Back-end work, including title change, handled by company
  • Refi for motorcycles, RVs, ATVs, and boats available
  • Add-ons like GAP and 24/7 roadside assistance available
Cons
  • Auto Approve displays no concrete information online about its minimum income or credit score requirements
  • The company did not respond to Money's requests for more information

PenFed Credit Union

Starting annual percent rates for auto refinance via Pentagon Federal Credit Union, also known as PenFed, aren’t as low as other companies. Models from 2021 and more recent could be as low as 4.24%, and pre-owned vehicles with more than 7,501 miles on a 36-month loan term start at 5.04%.

PenFed claims an average monthly savings of $108 for qualified borrowers. However, the company declined an interview with Money, so we weren’t able to get the details on its criteria for creditworthiness. For that reason, we’ve excluded PenFed from our top picks.

Pros
  • Monthly savings average of $108
  • Easy membership process: Open a savings account with a minimum of $5
  • Heaps of add-ons available (GAP, extended warranty, debt protection)
  • Additional perks, like discounts on auto insurance and financial services, for members
Cons
  • Starting annual percentage rates are higher than with other companies
  • Minimum credit score or income requirements not stated online
  • PenFed declined our request for more information via interview

Bank of America

Bank of America’s starting APR rate currently stands at 4.99%, which is higher than many other companies in our top picks.

Pros
  • Lease buyouts for qualifying borrowers
  • Car loan calculator for quotes requires no personally identifying information
  • Bank of America customers may qualify for Preferred Rewards discounts of 0.25% - 0.50%
Cons
  • Minimum financing amount of $7,500 ($8,000 in Minnesota)
  • Car must be valued at $6,000 or more
  • May require a down payment for refinancing

Capital One

Capital One may require that auto refinance borrowers pay down the balance of their current car loan if their payoff amount is higher than the company’s limits. The lack of information available about starting annual percentage rates also factored into our decision to leave Capital One off the list.

Pros
  • 90% of prequalified applicants are ultimately approved
  • Capital One handles paying off previous lienholder
Cons
  • May require payment to the current loan before approval
  • No lease buyouts or cash-back refinancing options
  • Current loan amount capped at $50,000

Ally Clearlane

Ally Clearlane requires potential borrowers to go through a pre-qualification process to get information about annual percent rates and loan terms. The company did not respond to our requests for these details, and so we chose to exclude it from our top picks.

Pros
  • Prequalify without a soft credit pull
  • Cosigners allowed
  • Lease buyout available
Cons
  • Term and APR info available only after filling out forms with personal information
  • Average monthly savings claim of $119 monthly is from 2021 data, may not reflect 2022 info

Auto Refinancing Guide

Refinancing can give access to better interest rates when your credit history has improved since taking out your current auto loan. However, it’s not a decision to be made lightly, as it may mean additional fees and a hit to your credit score.

How does refinancing a car work?

There are two main ways to refinance your car: traditional and cash-out refinance.

Traditional auto refinance

Refinancing a car generally means taking out a new loan to pay off the balance on your existing auto loan, ideally for a lower rate. Since your original loan is replaced by a new financial obligation, you gain a new APR and new term length.

As an added bonus, your car insurance premiums are likely to go down as well. If you’re looking to change insurers, you can also check out our list of the best car insurance companies.

Cash-out auto refinance

A few auto refinance companies also offer cash-out auto refinances, in which your new loan covers your existing balance and provides an additional amount of money. While a cash-out refinance may have lower interest rates than other options, such as personal loans or credit cards, your monthly payments will go up. This type of loan also has a higher risk of going upside-down.

Auto refinancing requirements

Before beginning the process, it’s important to make sure refinancing is the right solution for you and whether you meet the qualification requirements. Carefully consider the following:

  • Your existing loan’s prepayment protocol - Check your existing auto loan agreement to find out if you’ll be penalized for paying early. (This is called a prepayment penalty.) If so, crunch the numbers to see whether an auto refinance makes sense.
  • Loan balance versus your car’s market value - Your loan balance is higher than the car’s market value. If you’re “underwater,” or owe more than the car is worth, many lenders won’t consider you for an auto refinance loan. (You can check your car’s value on Kelley Blue Book.)
  • Vehicle age and its mileage - Auto refinance lenders have restrictions you’ll have to meet. Many won’t offer loans for cars older than 10 years or that have over 120,000 miles.
  • The status of your current loan payments - Your loan payments should be up to date. If you’re behind on payments, many lenders won’t consider you a viable candidate.
  • The balance of your current loan - Each lender has a maximum and a minimum loan amount they’ll refinance. If your loan’s current balance is too low or too high, you may not qualify. Many loan providers also have minimum loan amounts (and maximums) to consider.
  • The kind of car you have - Generally, auto refinance companies won’t refinance cars that are “branded,” meaning rebuilt, salvaged or commercial vehicles.
Pros
  • Longer refinancing terms decrease your monthly car payments
  • Shorter refinancing terms can save you money in the long run
  • May obtain lower interest rates
  • No down payment necessary
Cons
  • Total interest will go up if you extend loan repayment terms
  • A shorter loan term will increase your monthly payments
  • Prepayment penalties and refinancing fees can offset any interest rate savings
  • Lenders may charge an origination fee on the new loan

When can you refinance a car loan?

Deciding when you should refinance your loan depends on a number of factors. While a refinance is technically possible even on a new loan, there are some conditions under which it makes the most sense.

Your current deal isn’t great

Thanks to global shipping issues and high demand, and if you didn’t do some careful comparison shopping between lenders or dealerships when you bought your car, your loan may not have the best repayment terms or rates.

For instance, if your current APR is around 20-25%, you might be able to get a better offer by shopping around. This is particularly true if your loan is two years older or more, as many loans with high APRs charge most of the interest amount during that time period.

Your credit score has gone up

An improved credit score will likely give you access to much better repayment terms and lower interest rates.

Your current loan payments are too high

Whether you’ve lost your job or your budget changed, a refinance can lower your monthly payment by extending the loan’s term length. This does mean you’ll pay more in interest over the long run, but sometimes that may be the least bad choice.

How to refinance a car loan

Once you’ve weighed your options and decided a refinance of your current loan is the way to go, follow these simple steps.

7 steps to apply for an auto refinance

  1. Check the health of your credit score - If you have good credit, you'll likely get a better deal. This may be a good time to find and dispute any incorrect information in your credit report.
  2. Gather all the information about your current auto loan - Having all your information at hand will help speed the application process.
  3. Research new lenders and compare rates - While it may take some time, thoroughly researching your new auto refinance lenders and loan offers to find the best auto loan can not only help you compare rates, but also identify any potential red flags. You can also see whether your current lender offers a competitive refinance option, but keep in mind that some lenders will not refinance loans from their own company.
  4. File for prequalification - Getting a pre-approval, when available, presents you as a good candidate for a refinance.
  5. Submit an application - Once you've gathered all your documents and have chosen a lender, it's time to apply. Many lenders offer an online application.
  6. Evaluate the terms - Carefully read the fine print about loan terms. Check whether you can keep your current insurance policy under the new lender’s requirements.
  7. Finalize the loan - Remember to keep making your payments on your existing auto loan until the new auto refinance loan is finalized.

Documents needed to refinance your auto loan

To refinance any kind of loan, some documentation is required. These pertain to personally identifiable information, income, residence and your car’s specifications, among others.

Here’s a detailed list:

☑ Social Security number

☑ Employment information

☑ Residence information

☑ Driver’s license

☑ Car registration and mileage information

☑ Proof of insurance

Auto refinance and your credit score

Refinance lenders typically conduct a soft pull on your credit for pre-qualification, and then a hard inquiry or hard pull on your credit when you actually apply. The former will have no effect on your score, but the latter will drag you down by a few points.

To minimize the drop, make sure to loan shop within a 14-45 day window, as credit bureaus will count these as one single pull.

Unauthorized hard inquiries aren’t unheard of, so make sure the lender is trustworthy. If you find unauthorized inquiries on your report, here’s how to remove negative items on your credit report.

Your credit score will also drop slightly after finalizing the loan because a refinance counts as new debt. Since this new account is effectively replacing an older debt, the credit drop should be negligible, regardless of whether you’re looking at VantageScore vs FICO.

In any case, remember to keep making your payments on your current loan until the refinance has gone through. Otherwise, your credit could be affected. Also, be sure to find out if your new auto refinance lender will pay off the previous auto loan for you or if you’ll need to handle that yourself.

How to refinance a car loan with bad credit

Your credit score should be at least 640 if you hope to get the best rate on auto refi. However, there are cases in which refinancing may be beneficial:

  • If auto loan rates have gone down - While new-car rates are different from refinance rates, you may have some wiggle room.
  • If your goal is a lower monthly payment - If your main driver to refinance is decreasing your monthly payment, this may mean extending your loan term. The downside is that this will extend the life of the loan, and you’ll therefore pay more in interest as well.

If you’re determined to refinance your car loan despite a spotty credit history, follow the steps outlined above. It may make sense to check out competing offers on a marketplace website such as LendingTree or RateGenius. You may also be able to get a better deal with a lender that allows you to add a co-signer to your loan.

Another option is to consider debt consolidation, which can streamline your loan payoff strategy.

Finally, if you can’t find a good deal, taking steps to fix your credit may end up being your best move in the long run. An improved credit score will affect every area of your finances, not just your auto loan refinancing. While most credit repair strategies are possible to do yourself, if the time commitment is too high, you may want to check out our list of the best credit repair companies.

How to refinance a car lease

Refinancing a car lease can reduce the high rates on a leasing agreement. Before deciding, however, consider the pros and the cons:

Pros
  • Reduce high interest rates
  • Lower monthly payment
Cons
  • Lose out on the money that you already paid into the lease
  • Pay more in prepayment penalties

Auto Refinance in Today’s Economy

It’s not surprising that people are struggling with finances. Recent Census Bureau shows that about 40% of adults are experiencing difficulty keeping up with basic household expenses.

One avenue for potential savings? Auto loan refinance. Many auto refinance companies currently tout a monthly payment drop of about $100, and a few others claim their average customer saves closer to $150.

If you’re signed onto a high-interest car loan, you certainly aren’t alone. Maybe you bought into a bad deal because your credit score wasn’t too healthy and you needed a car right away, but today you’re in a better place credit-wise. It’s possible, too, that you’re one of many people whose interest rate is unfairly high; major discrepancies in interest rates among similarly qualified borrowers is, unfortunately, a real problem.

Additionally, more than 80% of new car buyers paid more than the manufacturer suggested retail price (MSRP) in January of this year. This is according to data from the research firm Edmunds, which also reports that, because of supply shortages, too-high prices have been the average for months.

Used car prices have gone up too, sometimes surpassing the cost of a newer version of the same make and model. However, auto refinance remains a viable option. A lot of companies will even work with borrowers with car loans originated as recently as one month ago.

Auto Refinance Companies FAQ

How to refinance a car

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To refinance an auto loan, gather all the necessary documents. Then, evaluate your credit profile and your car's information to determine if refinancing is beneficial and if you qualify. Lenders will post their requirements online and some even allow you to file for pre-qualification.

Before starting the application process, shop around and compare offers from different auto refinance lenders. When you settle on the best one, submit a formal application and wait for the lender's formal offer. If accepted, you can finalize the document, settle the previous loan, and start your loan payments with the new lender.

When can I refinance my car?

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You should refinance an auto loan if it helps you save money, when you have a good credit score or when your score has improved. Refinancing your car loan with better credit can get you better loan interest rates, and help you negotiate for a reduced loan term length.

You shouldn't consider refinancing your car loan if you're financially stressed or if your loan value goes underwater, meaning that the loan's value is higher than what your car is worth. This type of loan will impact your loan-to-value ratio, and significantly reduce the chances of receiving favorable loan repayment terms for a refinance.

Can I get a loan with bad credit?

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You can get a car loan with bad credit, but it will be more challenging. Lenders use credit scores to evaluate a borrower's risk, so the best car refinance rates tend to go to those with good-to-excellent credit. People with low credit will have higher rates than those with a good or excellent credit score. Some lenders do specialize in loans for customers with fair to poor credit, like Autopay and Auto Credit Express.

How many times can you refinance a car?

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Legally, you can refinance a car as many times as you want if you find a different lender willing to extend you a new loan. Auto lenders may be apprehensive about refinancing if they see multiple past refinances on your vehicle and even if you get approved, there are other financial risks to consider.

Repeated refinances and loan term extensions increase the risk of going "upside-down" on your loan, which means your loan balance is greater than the market value of your car. You may also end up paying more than the original loan amount, just in interest rates.

How to transfer a car loan to another person?

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You can transfer your car loan to someone else if the new lender allows it. Loan transfers may come with a transferring and/or merchant fee, and lenders always check that the transferee has good credit and income, to prevent loan defaults. The transfer won't be approved if the person's creditworthiness and income aren't up to par.

Where is the best place to refinance a car?

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The best auto refinancing companies for your personal needs will depend on your specific situation. We recommend RateGenius for its vast network of lenders though, as with any auto refinance company, good credit will get you favorable rates and excellent credit will attract even better rates. However, if you're working with a low credit score, a company like Auto Credit Express or Autopay, both of which specifically state they work with borrowers with bad credit, may be a better fit.

You will need to look at each auto refinance company's criteria to find the best loan options for you. Nobody is obligated to accept the first auto refinance offer they receive. Especially if you have good credit, there's always a different lender out there to consider.

How We Chose the Best Auto Refinance Companies

When looking for the different auto refinance companies in the industry, we considered several criteria.

  • Financial stability - We looked at each company’s financial stability to make sure they’d be able to meet their refinancing obligations.
  • Loan options - We looked for auto refinancing companies that offered competitive interest rates, zero to no upfront fees and flexible or reasonable vehicle restrictions.
  • Customer experience - We looked at each company’s complaints with the Consumer Financial Protection Bureau (CFPB) or the Federal Trade Commission (FTC). We also checked whether each company was transparent regarding its partners, underwriters and fees.
  • Financial products - We also took into account each company’s array of financial products and interviewed representatives from some companies.

We also interviewed representatives from companies as part of our research process. Still, though we always try to include accurate and up-to-date information on regulatory and legal actions, we don’t claim this information is complete or fully up to date. As always, we recommend you do your own research as well.

Summary of Money’s Best Auto Refinance Companies of August 2022