You financed through a dealership. Financing through a dealer may mean that you have a higher interest rate than you might with a different lender. If you didn’t get an auto loan preapproval from a lender, you might be paying more in interest than needed and might benefit from refinancing.
Your credit score or income improved. If your credit score has improved significantly since you took out your auto loan, you may be able to qualify for a lower refinance rate. If your income grew because of a new job or promotion, this may be true as well.
You need a lower monthly payment. If you’re struggling to make your current monthly payment, you might consider refinancing. By extending the term of your loan, you can often lower your monthly payment at the expense of paying more interest over the total term of your loan. It’s better to refinance your auto loan for a lower monthly payment than it is to miss payments, pay late fees or face repossession.
Interest rates have dropped. If interest rates have dropped significantly since you got your car loan, it may be worth it to refinance. Just be sure that the amount you save each month makes it worth the cost of any one-time fees you’re charged during the refinance process.
You found a cosigner. If you have a trusted friend or family member who can cosign your auto loan, you may consider refinancing. Adding a cosigner with better credit and more income will likely improve the rate on your auto loan.