How refinancing rates are priced right now
Auto refinancing rates depend on your credit score, the age and mileage of your car, how much you still owe, and what the lender's current rates are. There is no single "refinancing rate"—each lender sets their own, and the same person can receive different offers from different banks on the same day.
Your credit score is the biggest factor. A score above 750 typically gets rates in the 4–6% range from banks and credit unions, while a score between 650–700 might see 7–10%. Scores below 650 can face rates above 10% or may not be offered refinancing at all. These ranges shift as the Federal Reserve changes its benchmark rate, which influences what lenders charge.
The age of your vehicle also matters. Most lenders will refinance cars up to 10 years old, though some go to 12 or 15 years. A 2015 model will get better rates than a 2010 model with the same mileage. Lenders see older cars as higher risk because repair costs climb and resale value drops.
Key Takeaways
- Your credit score is the primary driver of your rate; a 100-point difference in your score can mean 2–4% difference in the rate you receive.
- Loan term length affects your rate—a 36-month refinance typically costs less per month but carries a higher interest rate than a 60-month term.
- The lender type matters: banks, credit unions, and online lenders often price differently, and credit unions frequently offer lower rates to members.
- Your current loan balance and the car's value determine whether refinancing saves money; if you owe more than the car is worth, most lenders will decline.
- Rate quotes are usually free and do not affect your credit score when you shop around within a two-week window.
What your credit score means for your rate
Lenders use your credit score to predict whether you will repay on time. A higher score signals lower risk, so you get a lower rate. The difference is substantial: someone with a 780 score might receive 5.2%, while someone with a 680 score might receive 8.9% for the same loan amount and term.
If your score has improved since you took out your original auto loan, refinancing becomes worth considering. Many people refinance specifically because their credit improved—they paid bills on time, paid down debt, or resolved past issues. Even a 50-point improvement can lower your rate by 1–2%.
You can check your credit score free through AnnualCreditReport.com or through your bank's website. Most banks and credit card companies now show your score at no cost. Knowing your score before you shop for rates helps you understand what range to expect and whether refinancing makes financial sense.
How loan term length affects your rate
A shorter loan term (36 or 48 months) usually carries a lower interest rate than a longer term (60 or 72 months). The tradeoff is your monthly payment: a shorter term means higher payments, but you pay less interest overall. A longer term spreads payments out, lowering the monthly bill but raising total interest paid.
For example, refinancing a $15,000 balance at 6% for 48 months might cost $345 per month with $1,560 in total interest. The same loan at 7.5% for 60 months might cost $283 per month but total $1,980 in interest. The monthly savings are real, but you pay more over time.
Lenders price longer terms higher because they carry more risk—the car ages, your circumstances could change, and the vehicle's value drops further. When you shop for rates, always compare the same term length across lenders, or you will be comparing apples to oranges.
Where rates differ: banks, credit unions, and online lenders
Banks, credit unions, and online lenders often price refinancing differently. Credit unions typically offer the lowest rates to members, sometimes 1–2% lower than banks. Credit unions are member-owned and often prioritize member savings over profit margins. However, you must be a member to borrow, and membership requirements vary by location, employer, or family ties.
Traditional banks offer competitive rates and fast approval, but they tend to price higher than credit unions. Online lenders move quickly and may work with lower credit scores, but their rates are often the highest of the three. Online lenders also charge origination fees (typically $0–$300) that banks and credit unions may waive.
The best approach is to get quotes from all three types. Most lenders offer free rate quotes that do not affect your credit score when you shop within a 14-day window. Comparing three to five lenders takes 30 minutes and can reveal $50–$200 per year in savings.
When your car's value affects whether you can refinance
Lenders want the car to be worth more than you owe on it. If you owe $18,000 on a car worth $16,000, you are "underwater," and most lenders will decline to refinance. They use the car as collateral, and if you default, they need to be able to sell it and recover their money.
You can find your car's value through Kelley Blue Book (kbb.com) or NADA Guides (nadaguides.com). Enter your vehicle's year, make, model, mileage, and condition. The value will be lower than what you might sell it for privately, but it is close to what a lender will use.
If you are underwater, you have limited options. Some credit unions and online lenders will refinance underwater loans, but they charge higher rates to offset the risk. Paying down your loan balance before refinancing is another path—even $2,000–$3,000 extra can move you above water and unlock better rates.
How to compare rates across lenders
When you request a rate quote, lenders will ask for your name, address, phone number, Social Security number, driver's license number, vehicle information (year, make, model, mileage, VIN), and current loan details (lender name, loan balance, monthly payment). Have this information ready before you start.
Request quotes from at least three lenders and write down the rate, term, monthly payment, and any fees. Do this within a 14-day window so that multiple credit inquiries count as a single inquiry for credit scoring purposes. After 14 days, each new inquiry can lower your score slightly.
Once you have quotes, calculate the total interest you will pay over the life of each loan. A lower rate does not always mean the best deal if the term is longer. Use an auto loan calculator (most lenders provide one on their website) to see the full picture: monthly payment, total interest, and total amount paid.
What happens to your rate after you lock it in
Most lenders lock your rate for 30–60 days after you receive a quote. This means the rate will not change during that window, even if market rates move. Once you formally submit your process and the lender approves you, the rate is locked until closing.
If market rates drop significantly during your lock period, you cannot go back and ask for a lower rate—the lock protects the lender, not you. This is why timing matters. If you see rates dropping, you can wait a few days to see if they stabilize, but do not wait too long or your lock will expire and you will need new quotes.
After closing, your rate is permanent for the life of the loan. You cannot refinance again unless you explore for a new refinance loan, which means another credit inquiry and another approval process.
Frequently Asked Questions
Will shopping for refinancing rates hurt my credit score?
Multiple rate inquiries within a 14-day window count as a single inquiry for credit scoring, so shopping around causes minimal damage—typically a 5-point dip that recovers within a few months. After 14 days, each new inquiry is separate and can lower your score by a few points each. Get all your quotes within two weeks to minimize impact.
What if my rate quote expires before I decide?
Rate quotes expire after 30–60 days, depending on the lender. If you want to move forward, contact the lender and ask them to extend the quote or provide a new one. You can also request a new quote at any time—there is no penalty for asking. If rates have moved, your new quote will reflect that.
Can I refinance if I have a cosigner on my original loan?
Yes, but the cosigner's credit and income may be reviewed. Some lenders allow you to remove the cosigner during refinancing if your credit has improved. Ask the lender directly whether you can refinance without the cosigner, as policies vary.
Do I have to refinance with my current lender?
No. You can refinance with any lender that approves you. Your current lender has no right to match a competing offer or prevent you from leaving. The new lender pays off your old loan and you make payments to them instead.
What if I have a very old car—can I still refinance?
Most lenders stop refinancing cars older than 10 years, though some credit unions and online lenders go to 12 or 15 years. Older cars carry higher rates because repair costs are unpredictable and resale value is low. Call lenders directly to ask about their age limits before you explore.