8 Best Auto Loan Refinance Rates of May 2026

What is auto refinancing, and how can it help?

Auto refinancing is the process of replacing your current car loan with a new one—usually with a different interest rate and repayment term. Your vehicle secures the loan, so the lender might repossess it if you don’t make payments.

Qualifying for a lower rate could save you hundreds of dollars in interest, especially if you don’t extend your repayment term. Other benefits include: 

• Lower monthly payments: Some borrowers refinance to longer terms to access lower monthly payments. 
• Access to equity: Many lenders offer cash-out auto refinancing, which replaces your existing loan with a larger one. You receive the difference as a lump sum. 
• Ability to add a cosigner: Applying for a new auto loan with a cosigner with a high credit score could reduce your rate. You can also apply independently to remove a cosigner from your existing loan. 

How much could auto refinancing help you save?

Auto refinance loans can reduce total borrowing costs by lowering interest rates. Experian’s latest State of the Automotive Finance Market report found an average savings of 2% when comparing borrowers’ original and new annual percentage rates (APRs). 

Refinancing might also reduce your monthly payment, freeing up your budget in the short term. There are two ways you can do this: 

• Qualify for a lower rate on a loan with the same repayment term as the remaining time on your existing loan. 
• Qualify for an equal or lower rate on a loan with a longer repayment term than your existing loan. 

Both methods can decrease your bill, but choosing a longer repayment term could result in more interest paid over the loan’s lifetime.

What are current auto refinance rates?

Car loan refinancing rates are generally higher than new auto loan financing rates. Averages range from 4.67% to 13.43%, according to RateGenius. Rates vary by creditworthiness, repayment term and other factors. 

How your credit score affects your auto refinance offers

Credit is one of several factors lenders might use to determine eligibility, but it has a big impact on loan terms. 

If you have a high score, refinancing your car with a lower APR might be possible. You are also likely to have more lenders and repayment terms to choose from. Experian’s State of the Automotive Finance Market report found over 65% of loan originations in the fourth quarter of 2025 were for applicants with scores over 660. 

Lower scores generally qualify for higher rates, and borrowers might have to find lenders that work with various credit profiles. 

Estimate your potential savings through auto refinancing

Consider total borrowing costs before refinancing. Our loan calculator can estimate your monthly payment and interest charges. Compare your existing loan to the new rate and repayment term to calculate potential savings.