8 Best Auto Refinance Companies of July 2022

·30 min read
Jose Velez / Money
Jose Velez / Money
  1. Best Add-Ons

    Caribou

    Our Partner

    • Company Highlight:

      Refinance your car and save on car insurance

    • Maximum Loan Amount:

      Not disclosed

    • Loan Terms:

      Varies by lender

    • Minimum Credit Score:

      Varies by lender

    See Rates

  2. Best Marketplace

    RATEGENIUS

    Our Partner

    • Company Highlight:

      About 200 lenders in its marketplace

    • Maximum Loan Amount:

      No limit

    • Loan Terms:

      24 to 96 months

    • Minimum Credit Score:

      N/A

    See Rates

  3. Runner-Up for Best Marketplace

    LendingTree

    Our Partner

    • Company Highlight:

      Welcomes a broad range of credit scores

    • Maximum Loan Amount:

      Varies by lender

    • Loan Terms:

      36 to 84 months

    • Minimum Credit Score:

      N/A

    See Rates

  4. Best for Low Credit Score

    Auto Credit Express

    Our Partner

    • Company Highlight:

      Specializes in borrowers with bad credit

    • Maximum Loan Amount:

      Not disclosed

    • Loan Terms:

      Varies by lender

    • Minimum Credit Score:

      Varies by lender

    See Rates

  5. Best for Fair Credit

    myAutoloans

    Our Partner

    • Company Highlight:

      Offers traditional, cash-back and lease payoff refinancing

    • Maximum Loan Amount:

      $2.5k-$100k

    • Loan Terms:

      24-84 months

    • Minimum Credit Score:

      600

    See Rates

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

  • RateGenius – Best Marketplace

  • LendingTree – Runner-up for Best Marketplace

  • Auto Credit Express – Best for Low Credit Score

  • AutoPay – Runner-up for Best for Low Credit

  • PenFed Credit Union – Best for Add-Ons

  • MyAutoLoan.com – Best for Fair Credit

  • Caribou – Runner-up for Best for Fair Credit

  • Lightstream – Best for Older Cars

Best Auto Refinance Company Reviews

Why we chose it: RateGenius has the biggest lender network compared to any other auto refinance specialist in our top picks.

Pros

  • <li aria-level="1">Marketplace includes 200 lenders</li> <li aria-level="1">No limit on existing loan balance</li> <li aria-level="1">Prequalify with a soft credit inquiry</li>

Cons

  • <li aria-level="1">$8,000 minimum loan balance</li> <li aria-level="1">Best for prime borrowers</li>

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 finding the best rate for your particular auto refinance situation easier.

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: We chose LendingTree as runner-up for best auto refinance marketplace because its lenders work with a range of credit scores, including customers with bad credit.

Pros

  • <li aria-level="1">Quote request form takes less than five minutes</li> <li aria-level="1">Marketplace includes approximately 40 lenders</li> <li aria-level="1">Serves a wide range of credit scores</li>

Cons

  • <li aria-level="1">Minimum amount owed for refinancing is $8,000</li>

HIGHLIGHTS

Loan Amounts
Varies by lender
APR Rates
Starting at 1.99%
Loan Terms
36 to 72 months

LendingTree is a marketplace where you can compare rates for just about any financial product, including auto refinance loans. The company’s marketplace consists of about 40 lenders serving the entire spectrum of credit scores.

We really liked the 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).

The minimum requirement for the amount owed on your auto loan when looking for refinancing options via LendingTree is $8,000. Additionally, your vehicle cannot be more than 7 years old but there are no restrictions in terms of make or model. 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: We chose Auto Credit Express as best for people with poor (600-649) or bad (below 600) credit scores.

Pros

  • <li>No minimum credit score requirement</li> <li>Specializes in borrowers with bad credit</li> <li>Some lenders give borrowers up to 60 days before their first payment</li> <li>Excellent educational resources for borrowers looking to learn more about the lending industry</li>

Cons

  • <li>Partner lenders may have high interest rates for low credit applicants</li> <li>Requirements, rates and loan terms not available without application</li> <li>Options limited to Auto Credit Express dealership network</li>

HIGHLIGHTS

Loan Amounts
Not provided online
APR Rates
Not provided online
Loan Terms
Not provided online

Auto Credit Express specializes in helping applicants with poor to average credit get better refinance loan rates — including those who owe more than their car is worth.

It does this by connecting you to one of its specialized indirect lenders from what they call “the largest selection of bad credit car dealers across the country” — that’s more than 900 dealers at the time of this publication — or via its finance department.

The company claims it can help borrowers in any credit situation, including those who have experienced bankruptcy or repossessions. There’s a possibility you could even defer your first payment for up to 60 days. However, Auto Credit Express does require a minimum monthly income of $1,500.

Why we chose it: The company’s ability to connect subprime borrowers to lenders can be extremely helpful for those with bad credit who are looking for better rates and, through consistent on-time payments on their refinanced loan, ultimately bump up their credit scores.

Pros

  • <li>Borrowers with poor credit encouraged to apply</li> <li>90% approval rate</li> <li>Co-applicants allowed</li>

Cons

  • Rates and terms for bad credit borrowers are less favorable

HIGHLIGHTS

Loan Amounts
Starting at $8,000
APR Rates
Starting at 1.99%
Loan Terms
24 to 96 months

Autopay is the second brand acquired by The Savings Group, which also includes Tresl and RateGenius. Customers with bad credit scores will find more auto refinance options through this company than most, but the rates will be higher and terms more rigid 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, and that’s a plus. Even a slight drop in your annual percentage rate or monthly payment from your current loan could help save you money.

Cash-out refinance loans and lease buyouts are also part of Autpay’s offerings. Co-applicants on loan applications are also allowed, which is another route to potentially scoring a better offer within 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 that lease is paid off.

Why we chose it: In addition to add-ons like GAP coverage, PenFed Credit Union members get access to perks and exclusive deals on home security, tax preparation and more.

Pros

  • <li>Can refinance 125% of your car loan balance</li> <li>Quick online application takes under five minutes</li> <li>No prepayment penalties</li>

Cons

  • <li>High APR rates compared to other companies</li> <li>PenFed auto loans aren't eligible</li> <li>No cash-out or lease buyouts</li>

HIGHLIGHTS

Loan Amounts
Up to $150,000
APR Rates
Starting at 4.24% APR
Loan Terms
36 to 84 months

Through partnerships with other companies, PenFed gives its members access to exclusive discounts on services like home security and insurance, auto insurance and financial services through companies like TurboTax and H&R Block. Other add-ons include Guaranteed Asset Protection (GAP), an extended warranty and debt protection.

For its members, the company makes available an Advice Center as well as a Financial Hardship Center. This can be helpful in empowering borrowers to better understand and more successfully manage their personal finances.

While this company formerly catered mostly to military service personnel, all of its services are now available to anyone who becomes a PenFed Credit Union member. Any citizen or permanent resident of the U.S. can sign up by opening a savings account with a minimum of $5.

Pentagon Federal Credit Union offers up to 125% financing, an amount that not all companies offer. However, its annual percentage rates are higher, starting at 4.24% for a new auto refinance (2021 or newer with less than 7,501 miles) and 5.04% for a used auto refinance (pre-owned vehicles or those with more than 7,501 miles). Title loans and cash-out refinance are part of PenFed Credit Union’s products, too.

Why we chose it: We chose MyAutoLoan.com as best the best auto refinance for fair credit thanks to its competitive rates for borrowers with a minimum credit score of 575.

Pros

  • <li>30 days to select a loan offer</li> <li>No application fee</li> <li>Minimum FICO credit score requirement of 575</li> <li>No payments for up to 90 days for qualified borrowers</li>

Cons

  • <li>Not available in Alaska or Hawaii</li> <li>Maximum vehicle mileage of 125,000 miles (or 120,000 miles for private party loans)</li> <li>Maximum vehicle age: 10 years</li>

HIGHLIGHTS

Loan Amounts
Minimum $5,000
APR Rates
Starting at 1.99%
Loan Terms
24 to 84 months

Fill out a two-minute application form and MyAutoLoan.com can potentially connect you to up to four offers from partner lenders that refinance auto loans. For the best chances for offers and competitive rates, the company recommends you have a minimum FICO credit score of 575. MyAutoLoan.com also recommends borrowers have a monthly income of at least $1,500 per month.

The company’s annual percentage rates for auto refinance start at 1.99% with terms ranging from 24 to 84 months. Lease buyouts start at 2.49%. You can estimate your potential savings via MyAutoLoan.com’s annual percentage rate and payment calculators online.

MyAutoLoan.com does not work with vehicles older than 10 years or with a mileage higher than 125,000.

Why we chose it: Caribou’s credit score requirement stands at 580, which means that its auto refinance loans are more accessible than companies that require excellent credit. You can also pair your loan with a variety of helpful add-ons such as key replacement and GAP coverage.

Pros

  • <li>Minimum credit score of 580</li> <li>Compare rates without a credit check or Social Security number</li> <li>Pre-qualify without impacting your credit score</li> <li>Multitude of add-ons available</li>

Cons

  • <li>Not available in Mississippi, Maryland, Nebraska, Nevada, Wisconsin, or West Virginia</li> <li>No auto lease buyout option</li> <li>Processing fee of $399 for loan closing</li>

HIGHLIGHTS

Loan Amounts
$5,000 - $150,000
APR Rates
Starting at 2.79%
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 different offers to choose from in minutes. Borrowers can apply with a minimum annual income of $24,000 and a credit score of at least 580.

However, like with all companies, the better your credit score, the better your annual percentage rate will likely be. Rates may be as high as 36%. Still, for customers who feel stuck in a bad loan situation, a new deal even at that rate could be helpful. Additionally, Caribou does permit co-borrowers, which could increase your potential savings if that co-borrower has good to excellent credit.

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

While you can opt for a 100% digital process all the way up to the title change itself, borrowers can also access customer service via live chat, phone or email.

Why we chose it: We chose LightStream as best auto refinance for older cars because of its lack of vehicle restrictions on car mileage and vehicle year.

Pros

  • <li>No restrictions on car mileage or vehicle year</li> <li>Lease buyout available</li> <li>No fees or prepayment penalties</li> <li>Co-borrowers permitted</li> <li>Rate discount if enrolled in autopay</li>

Cons

  • <li>Excellent credit required</li> <li>Hard credit check required to apply</li> <li>No cash-out refinancing options</li> <li>Must have a Visa or MasterCard credit card for verification purposes</li>

HIGHLIGHTS

Loan Amounts
$5,000 to $100,000
APR Rates
Starting at 4.99%
Loan Terms
Not available online

LightStream is an online lender backed by Truist Bank, previously known as SunTrust Bank. It’s one of the few lenders with no vehicle restrictions on its auto refinance loans. There are no limitations, be it a loan for purchasing or refinancing, on a car’s year, make, model, or mileage. The lack of car mileage or age restrictions means customers can refinance new, used and even classic cars.

However, LightStream sets a high bar in terms of its credit score requirements. Excellent credit by this company’s standards includes factors like the variety of your account types, payment history, stability and amount of income, your current credit card debt, and whether you own liquid assets, like stocks or bonds, or other proof of an ability to save up money.

Even borrowers with excellent credit will likely see an annual percentage rate of at least 4.99%. Additionally, if you don’t enroll in automatic payments, your rate will be 0.50% higher. One benefit despite the higher rate, however, is that the rate you receive is fixed and will not change during the repayment process, also known as the “life of the loan.” You can get an idea of your potential rate using LightStream’s online rate calculator.

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

Other Auto Refinance Companies We Considered

RefiJet

While RefiJet considers a range of credit histories, the company’s requirement of a minimum $10,000 balance on your current loan is slightly higher compared to other auto refinance companies. RefiJet also requires that you have full coverage insurance.

Pros

  • <li>Average monthly savings: $150</li> <li>APR rates from 2.49% and up</li> <li>Lease buyout and cash-out refinance loans available</li>

Cons

  • <li>Minimum $10,000 balance on existing loan</li> <li>Must have full coverage insurance</li> <li>No consumer experience data on the CFPB database</li>

Auto Approve

Because of its potentially low APR rates and broad range of loan terms, Auto Approve almost made our list but did not because the company does not share up front its credit score or income requirements for auto refinance loans.

Pros

  • <li>APR rates starting at 2.25%</li> <li>Terms from 12 to 84 months</li> <li>No SSN required for quotes</li> <li>Handles all back-end work, including DMV</li> <li>Refi for motorcycles, RVs, ATVs, and boats available</li> <li>Lease buyout available</li> <li>Add-ons like GAP and 24/7 roadside assistance available</li>

Cons

  • Auto Approve displays no concrete information online about its minimum credit score or annual income requirements

Lendingclub

LendingClub did not make our list of top picks due to its lack of APR rate transparency and its limiting mileage requirement.

Pros

  • <li>Outstanding loan balance minimum of $5,000 is lower than other companies</li> <li>Auto refinance available for loans as recent as one month old</li>

Cons

  • <li>No APR rate information readily available online</li> <li>Mileage cannot exceed 120,000 (as opposed to the 150,000 requirement of many other companies)</li>

Bank of America

Bank of America’s starting APR rate currently stands at 4.99%, which is higher than many other companies, and is only available to qualified applicants.

Pros

  • <li>Rates start at 4.99% APR for a 60-month term depending on eligibility</li> <li>Loan terms: 48, 60, or 72 months</li> <li>Offers lease buyouts</li> <li>Car loan calculator to help determine savings</li> <li>Bank of America customers may be available for a Preferred Rewards discount of .25% - .50%</li>

Cons

  • <li>Minimum financing amount of $7,500 ($8,000 in Minnesota)</li> <li>Vehicle must be less than 10 years old</li> <li>Mileage cannot exceed 125,000 miles</li> <li>Your car must be valued at $6,000 or more</li> <li>Refinancing with Bank of America may require a down payment</li>

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 APR rates also factored into our decision to leave Capital One off the list.

Pros

  • <li>90% of prequalified applicants are ultimately approved</li> <li>Capital One handles paying off previous lienholder</li>

Cons

  • <li>May require payment to current loan before approval</li> <li>No lease buyouts or cashback refinancing options</li> <li>Current loan amount capped at $50,000</li>

Tresl

While Tresl does offer connections to lenders that refinance auto loans, the company caters more to customers looking for new auto loans to purchase a vehicle.

Pros

  • <li>1.99% starting APR for qualified applicants</li> <li>Soft credit pull for checking rates</li> <li>Co-borrowers allowed</li> <li>No ceiling on loan balance</li>

Cons

  • <li>No 24-month repayment terms available</li> <li>Specialty is new original loans, not auto refinance</li>

Ally Clearlane

Ally Clearlane requires potential borrowers to go through a pre-qualification process to get APR rates and other important information. Additionally, the monthly minimum income ($2,000) required is a bit more than what many other companies ask.

Pros

  • <li>Prequalify with a soft credit pull</li> <li>Allows cosigners</li> <li>Lease buyout available</li>

Cons

  • <li>You cannot refinance a loan on a vehicle used for commercial purposes, e.g. delivery or rideshare services</li> <li>Not available in Nevada, Vermont, or Washington D.C.</li> <li>Minimum monthly income of $2,000</li> <li>Must fill out an online application to get info on terms</li>

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 this 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 – Does your existing loan have a prepayment penalty? If so, crunch the numbers to see whether an auto refinance makes sense.

  • Loan balance versus your car’s market value – Is your loan balance higher than the car’s market value? First check your car’s value on Kelley Blue Book. If you’re underwater, or owe more than the car is worth, it’ll be very difficult to refinance.

  • The age and mileage of your car – 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 – Are your loan payments up to date? If you’re behind on payments, many lenders won’t consider you a viable candidate.

  • The balance of your current loan – Do you meet the lender’s minimum balance requirements? 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 – Is your car “branded”? Auto refinance companies won’t refinance cars that are branded, such as rebuilt, salvaged or commercial vehicles.

Pros

  • <li>Refinancing with a longer term decreases your monthly car payments</li> <li>Can save you money in the long run if you refinance to a shorter term</li> <li>May obtain lower interest rates</li> <li>No down payment necessary</li>

Cons

  • <li>A shorter loan term will increase your monthly payments</li> <li>Prepayment penalties and refinancing fees can offset any interest rate savings</li> <li>Lenders may charge an origination fee on the new loan</li> <li>Older cars or cars with high mileage may not be eligible</li> <li>A cash-out refinance will result in higher payments over the next several years</li>

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 dealers 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 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 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.

  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.

  6. Evaluate the terms – Carefully read the loan’s fine print and terms. Check whether you can keep your current insurance policy under the new lender’s requirements.

  7. Finalize the loan – Remember to make sure to keep making your payments until the refinance 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.

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 your debt, 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 debt consolidation, which can streamline your payoff strategy.

Finally, if you can’t find a good deal, taking steps to fix your credit may end up 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

  • <li aria-level="1">Reduce high interest rates</li> <li aria-level="1">Lower monthly payment</li>

Cons

  • <li aria-level="1">Lose out on the money that you already paid into the lease</li> <li aria-level="1">Pay more in prepayment penalties</li>

Auto Refinance in Today’s Economy

Annual percentage rates for auto refinance loans are especially volatile right now. Speculation as to whether or not the economy is in a recession — or soon will be — is rampant. While interest rates tend to drop during these periods, the constant back and forth of pessimism and optimism about the future of financial markets means APR rates are constantly swinging pendulum-style.

RateGenius, which we rated Best Marketplace, indicates in its 2022 State of Auto Refinance report that savings were the highest on record since 2013. The average interest rate post-auto refinance is down to 7%, which is half of the average original loan rate of 14%. However, this data for the 2022 report is pulled from last year’s lending trends and is specific to the RateGenius brand.

You should take advantage of a low rate if offered one, but keep in mind that when the economy is doing poorly, lenders often become more rigid about borrower requirements. If you’re unhappy with the auto refinance rates you’re offered, try another company for a chance with a different lender.

Don’t rush the process. Annual percentage rates could change for the better a month from your initial inquiry. Patience and research will help you in getting the best rate for your particular situation.

Auto Refinance Companies FAQ

How to refinance a car

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?

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?

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?

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?

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?

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.

Although 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 July 2022

  • RateGenius – Best Marketplace

  • LendingTree – Runner-up for Best Marketplace

  • Auto Credit Express – Best for Low Credit Score

  • AutoPay – Runner-up for Best for Low Credit

  • PenFed Credit Union – Best for Add-Ons

  • MyAutoLoan.com – Best for Fair Credit

  • Caribou – Runner-up for Best for Fair Credit

  • Lightstream – Best for Older Cars

 

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