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Car refinance rates are a hot topic in 2025 as Americans seek relief from high auto loan payments and rising interest rates. Whether you want to lower your monthly payment, reduce your interest rate, or pay off your car faster, understanding current refinance rates and how to qualify for the best deal is essential. This guide covers everything: today’s rates, rate trends, calculators, lender comparisons, refinancing tips, credit score impact, and how to save the most money.
See Today's Auto Refinance Rates (Navy Federal)
📰 2025 News: Car Refinance Rate Trends & Market Update
📈 Rates Remain Elevated: In May 2025, average refinance rates for borrowers with excellent credit are 4.99%–5.59% for used vehicles at top credit unions, but most borrowers see offers between 5.5% and 10% APR depending on credit, car age, and lender.
📉 Rate Trends: After peaking in 2023–2024, car loan rates have stabilized but remain higher than the 4%–5% averages seen from 2012 to 2022. Average 60-month new car loan rates are now 8.2%–8.65%, and 72-month rates are 8.32%+.
🔢 Refinance Activity: Millions of Americans are refinancing to escape high payments from loans originated during the 2022–2023 rate spike. Digital lenders and credit unions are competing for business with streamlined applications and prequalification tools.
💡 Key Takeaway: Even a 1%–2% drop in your rate can save you hundreds or thousands over your loan term.
Use a Car Refinance Calculator (Bankrate)
📉 Rate Trends: After peaking in 2023–2024, car loan rates have stabilized but remain higher than the 4%–5% averages seen from 2012 to 2022. Average 60-month new car loan rates are now 8.2%–8.65%, and 72-month rates are 8.32%+.
🔢 Refinance Activity: Millions of Americans are refinancing to escape high payments from loans originated during the 2022–2023 rate spike. Digital lenders and credit unions are competing for business with streamlined applications and prequalification tools.
💡 Key Takeaway: Even a 1%–2% drop in your rate can save you hundreds or thousands over your loan term.
📊 Today's Car Refinance Rates by Lender & Credit Score
🏦 Sample Refinance Rates (May 2025):
📊 Average Loan Amount: $26,468 for used, $41,572 for new; average loan term: ~68 months.
Compare Average Auto Loan & Refinance Rates
- Navy Federal Credit Union: 4.99% (36mo), 5.49% (60mo), 5.59% (72mo) for used vehicles with excellent credit. New vehicle rates as low as 4.09% (36mo).
- Star One Credit Union: 5.95%–9.95% APR, same rate for all terms up to 7 years, based on credit.
- National Averages: 60-month new car loan: 8.2%–8.65%; 72-month new car loan: 8.32% (Q2 2024–Q2 2025).
| Credit Score | Refinance Rate |
|---|---|
| 750 or higher | 5.49% |
| 700–749 | 5.49% |
| 600–699 | 5.74% |
| 451–599 | 6.24% |
🧮 Car Refinance Calculators: How Much Can You Save?
🧮 Why Use a Calculator? A car refinance calculator lets you estimate your new monthly payment, total interest, and potential savings. Enter your current loan balance, rate, payment, and compare with new offers.
🔢 Key Inputs: Current loan balance, interest rate, remaining term, new rate, new term.
💡 Pro Tip: Compare at least three lenders and calculate your break-even point (how long it takes for savings to outweigh any fees).
Estimate Your Savings: Auto Refinance Calculator
🔢 Key Inputs: Current loan balance, interest rate, remaining term, new rate, new term.
💡 Pro Tip: Compare at least three lenders and calculate your break-even point (how long it takes for savings to outweigh any fees).
⚡ How to Qualify for the Best Car Refinance Rate
✔️ Top Factors:
Compare Lenders & Best Car Refinance Rates
- Excellent credit score (typically 700+ for best rates)
- Low loan-to-value (LTV) ratio—owe less than car’s value
- Recent, low-mileage vehicle (usually under 10 years/100,000 miles)
- Strong payment history with no recent late payments
- Stable income and low debt-to-income (DTI) ratio
- Check your credit and pay down other debts before applying
- Don’t extend your loan term just for a lower payment—this increases total interest
- Shop around and get prequalified offers from multiple lenders
- Negotiate fees and ask about discounts for autopay or loyalty
- Consider credit unions, which often have lower rates than banks or online lenders
💸 Pros & Cons: When Does Refinancing Make Sense?
👍 Good Reasons to Refinance:
Guide to Refinancing a Car Loan (Chase)
- Your credit score has improved since you got your original loan
- Interest rates have dropped or you can qualify for a lower rate
- You want to lower your monthly payment or pay off your car faster
- You want to remove or add a co-signer
- You want to switch lenders for better service or features
- If current market rates are higher than your existing rate
- If you’re close to paying off your loan
- If your car is too old or has high mileage
- If you owe more than your car is worth (negative equity)
- If your current loan has prepayment penalties that negate savings
📝 Step-by-Step: How to Refinance Your Car Loan for the Best Rate
1️⃣ Check Your Credit: Higher scores mean lower rates.
2️⃣ Review Your Current Loan: Know your payoff amount, rate, and remaining term.
3️⃣ Estimate Your Car’s Value: Use Kelley Blue Book or Edmunds.
4️⃣ Compare Lenders: Get prequalified offers from at least three lenders.
5️⃣ Calculate Savings: Use a refinance calculator to see if it’s worth it.
6️⃣ Apply & Finalize: Submit documents, sign the new loan, and confirm your old loan is paid off.
7️⃣ Set Up Payments: Update autopay and insurance with your new lender.
Try a CommunityAmerica Auto Refinance Calculator
2️⃣ Review Your Current Loan: Know your payoff amount, rate, and remaining term.
3️⃣ Estimate Your Car’s Value: Use Kelley Blue Book or Edmunds.
4️⃣ Compare Lenders: Get prequalified offers from at least three lenders.
5️⃣ Calculate Savings: Use a refinance calculator to see if it’s worth it.
6️⃣ Apply & Finalize: Submit documents, sign the new loan, and confirm your old loan is paid off.
7️⃣ Set Up Payments: Update autopay and insurance with your new lender.
💬 Real-World Tips, Mistakes to Avoid & FAQ
💡 Expert Tips:
Avoid Common Car Refinancing Mistakes
- Don’t refinance just for a lower payment—make sure you’re saving on total interest
- Beware of extending your loan term, which can increase total costs
- Factor in all fees (application, title, origination) before deciding
- Use calculators to compare offers side-by-side
- Read the fine print—avoid loans with prepayment penalties
- Monitor your credit report for any errors before applying
- Not shopping around for the best rate
- Refinancing when upside-down on your loan
- Ignoring fees and costs that eat into savings
- Not checking your credit or car’s value first
- Extending the loan term too far out
- Is it worth refinancing my car loan? If you can lower your rate by 1% or more without big fees, it’s often worth it.
- Can I refinance with bad credit? Yes, but rates will be higher; credit unions may be more flexible.
- How soon can I refinance? Most lenders allow refinancing after 6–12 months, but some sooner if your credit has improved.
- Does refinancing hurt my credit? There may be a small, temporary dip from a hard inquiry, but on-time payments can help your score long term.
- Can I refinance if I owe more than my car is worth? Some lenders allow it, but rates and terms may not be favorable.
- Are there fees to refinance? Some lenders charge application or title fees—always ask before applying.
- Should I refinance if I’m close to paying off my loan? Usually not, unless you need immediate payment relief.
©️ 2025 | Car Refinance Rates: Complete Guide for US Car Owners