Auto Loan Refinancing Guide: Lower APRs & Reduce Monthly Payments
Learn when to refinance a car loan, how credit score improvements lower APRs, title transfer fees, and break-even calculations.
By Sarah Jenkins, CFA
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Reviewed by David Vance, CFP
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5 min read
When Does Auto Refinancing Make Sense?
Auto loan refinancing replaces your current car loan with a new loan at a lower interest rate or different term length.
- Credit Score Improved: If your credit score improved from subprime (620) to prime (740+), your new APR can drop by 4% to 8%.
- Market Rates Decreased: Benchmark Federal Reserve interest rates dropped since you purchased the vehicle.