Auto Loan Refinancing: Reduce your Monthly Payment

For most people – a car is a major purchase and major decision. You spend countless hours researching which car is best for you and your family, what a fair price to pay is, and how to best pay for that car. Yet – despite spending all this time researching the car, its very hard for consumers to figure out what a fair payment is. Financing remains a black box controlled by the dealership who tells you a fair downpayment, interest rate, and monthly payment. And did you know the dealerships gets paid a high referral fee from these lenders – do you really believe they’re choosing the loan that is best for you? Luckily – there are options to refinancing your auto loan and reduce your payment to something more fair.

What is Auto Loan Refinancing:

Auto loan financing is fairly simple – you’re exchanging your current auto loan for a better one – think of it like “trading loans” for a better loan. In order to save money on total interest you’ll be looking to reduce the interest rate, and reduce the total number of remaining payments of term of the loan. If you’re looking to reduce the payment amount each month – then you may simply be looking at extending the total length (or term) of the loan.

Some Example of Auto Loan Refinancing Savings:

Let’s look at a few examples of “before & after” savings to get a sense how well auto loan refinancing can work even in its most basic form. These examples assume: (a) We’re refinancing a $15,000 loan over 72 months (b) We begin the process of refinancing immediately after leaving the dealership.

Original APROriginal PaymentNew APRNew Payment

Here we can see just how important it is to find the loan with the best APR. For a consumer is a 25% interest rate, they could save over $50 a month (or more than $3,500 total over the life of the loan).

How Big an Opportunity is there in the USA for Auto Loan Refinancing?

Americans loan more for cars than almost any other discretionary category except for student loans. But while student loan rates are fairly standardized, and never usurious – auto loan interest rates can be much higher.

A federal student loan is about 7%-9% but auto loan rates are only capped at 29.99% in some states. That means there’s an excess $37Bn in interest spent as a result of not getting customers into optimal auto loans.

Why Do Consumers Overpay on their Auto Loan?

Our friends at write a lot about auto loan refinancing and they point out “Americans overpay on their auto loans for a number of reasons. The by far most common one, not surprisingly, is the channel and context through which car owners get their loans:

79% of all buyers get their loan at the dealership, … right after they fall in love with the car they test-drive. In fact, I’m willing to bet that if you have a loan, you got it at the dealership, too! People simply don’t shop for loans. They shop for cars!

When you get your loan at the dealership, the dealer charges you a significantly higher rate than you could have obtained if you had shopped for a loan yourself:”

Where’s the best Place to Refinance my Auto Loan

Luckily we’ve got a few recommendations on the best place to refinance your auto loan. is a fully digital platform that lets car owners like you do so from the comfort of their own home. Withclutch is not a lender – but an impartial aggregator. They use market research to determine who’s the best lender for you based on the circumstances of your car and your credit history. Best of all – there’s no need to set a foot in a bank or credit union. You can lower your rate or get cash in as little as 20 seconds.

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