Consumers Save an Average of $83 a Month With an Auto Loan Refinance

Auto Loan Refinancing Saved Consumers an Average of $83 a Month

Auto loans typically have fixed interest rates, so if market rates decline—as has been the case over the past two years—the only way to take advantage is to refinance your loan.

According to Experian Auto data, the average savings from an auto loan refinance has steadily increased over the past two years, from just $24 in the Q1 2024 to $83 in Q2 2026.

Auto Loan Refinance Loan Monthly Savings

Prime and Near-Prime Borrowers Saved the Most

Much of your potential savings with an auto refinance loan depends on your credit standing and whether it has improved since you applied for your original auto loan.

Experian Auto's data groups borrowers into credit tiers based on their VantageScore^® 4.0 credit score. Here's how the average monthly savings breaks down for each range:

Source: Experian data as of Q2 2026; VantageScore 4.0 used

Learn more: Average Car Loan Interest Rates by Credit Score

Credit Unions Have the Largest Payment Reduction

The lender you choose can have a big impact on your potential savings because every lender has a different approach to evaluating risk.

In general, credit unions tend to offer lower interest rates because they're not-for-profit institutions. In other words, they typically return profits to members in the form of lower loan rates and other benefits.

And that appears to be the case with auto loan refinances. According to Experian data, borrowers saved an average of $102 per month when refinancing with a credit union, compared to $65 per month with banks and $38 per month with finance companies.

It's important to note that these averages reflect actual results, but they're not a promise of individual savings. Your own savings will depend on your current loan terms, credit history, income and other factors.

Learn more: How to Get the Best Car Loan

Average Auto Loan Refinance Rates

On average, auto loan borrowers cut their interest rate from 10.4% to 7.97%, according to Experian data, a difference of 2.43%.

Refinance rates have consistently declined since early 2024, when they averaged 9.95% and the gap between the original loan rate and the refinance rate was just 0.47%.

Average Auto Loan Interest Rates, Before and After Refinance

Learn more: Auto Loan Rates and Financing for 2026

Should You Refinance Your Auto Loan?

The decision to refinance your auto loan depends on your financial situation, your credit standing and your financial goals. Here are some situations where it could make sense:

• Your credit has improved. If your credit score has increased since you took out the original loan, you may be eligible for a lower interest rate with a different lender. This may be the case even if market rates haven't gone down.
• Market rates have decreased. If market rates for auto loans have decreased, you may be able to secure a lower monthly payment, even if your credit hasn't improved.
• You need a more manageable payment. Even if you can't qualify for a lower interest rate, refinancing could still make sense if you're struggling to handle your monthly payment. Extending your loan term through refinancing can reduce your payment, though it'll typically translate to more total interest charged.
• You want to tap some of your vehicle's equity. If your car's value is much higher than what you owe on your loan, a cash-out auto refinance loan allows you to access some of that positive equity. Just keep in mind that it may increase your monthly payment.

When You Might Not Want to Refinance

Here are some situations where it might not make sense to refinance your car loan:

• Your credit has worsened. If your credit score has dropped since you first took out your car loan, it could keep you from qualifying for a better rate, even if market rates are more attractive now.
• You owe more than the car's worth. If you're upside down on your car loan, lenders may be reluctant to refinance your loan unless you have excellent credit and a strong income or you pay down the balance first.
• You have an older vehicle. Many auto lenders set age and mileage limits for refinance loans. Mileage caps can range from 100,000 to 150,000, depending on the lender, and vehicle age limits may range from 10 to 13 years.
• The prepayment penalty outweighs the savings. If your loan has a prepayment penalty, it could cost you 1% to 2% of the loan amount when you refinance it or pay it off early. If your loan agreement has a prepayment fee attached, divide it by your expected monthly savings to see how long it'll take you to recoup the upfront cost.

Before you decide to refinance your car loan, check your FICO^® Score^Θ for free with Experian to see where you stand. Then, shop around and compare offers from multiple lenders to get an idea of your potential loan terms, including the annual percentage rate (APR), fees, repayment term and vehicle requirements.

Applying for an auto refinance involves a hard inquiry, which can affect your credit score. But if you submit all of your applications within a short period of time—14 or 45 days, depending on the credit scoring model—all the inquiries will be combined into one for scoring purposes.

Learn more: What Is Rate Shopping?

The Bottom Line

The average savings from an auto loan refinance has improved over the past two years as refinance rates have fallen. However, your potential savings will depend on your current loan terms, your credit history, your income and other debts, and the interest rate and repayment term you qualify for.

If you're not sure yet where you stand, get free access to your Experian credit report and FICO^® Score to gauge your credit standing and get insights into how you can improve your score.