Whether you financed at a dealership with a high APR, improved your credit score since your original loan, or simply want to reduce your monthly payment, now is an optimal time to refinance. This guide covers current refinance rates by credit tier, when refinancing makes sense, and how to secure the lowest APR from credit unions and online lenders.
2026 Auto Refinance Rates: What to Expect
Average auto refinance rates in 2026 range from 5.49% (excellent credit) to 14.99% (poor credit). With the Fed cutting rates, now is an optimal time to refinance and potentially save $50-$150/month.
Current Auto Refinance Rates by Credit Score
| Credit Score | Average APR | Monthly Savings* |
|---|---|---|
| 720+ | 5.49% – 6.99% | $87 – $125 |
| 680-719 | 7.49% – 9.99% | $63 – $94 |
| 620-679 | 10.49% – 12.99% | $45 – $71 |
| Below 620 | 13.49% – 14.99% | $32 – $58 |
*Based on $25,000 loan refinanced from 10.45% to lower rate
When Should You Refinance Your Car Loan?
Refinance If:
- Your credit score increased 50+ points
- Rates dropped 1%+ since your original loan
- You can reduce your APR by 2% or more
- No prepayment penalty on current loan
Don’t Refinance If:
- Less than 2 years left on current loan
- You’re underwater on the loan
- Your car has 100k+ miles
- Rate difference is less than 1%
How to Get the Lowest Refinance Rates
1. Check Credit Unions First: They typically offer 0.5-1.5% lower rates than banks.
2. Get Pre-Approved: Compare 3-5 lenders within 14 days to minimize credit impact.
3. Consider Shorter Terms: 36-month loans average 1.2% lower than 60-month.
4. Time It Right: Refinance 6-12 months after purchase when your credit has improved.
Frequently Asked Questions
What credit score do I need to refinance?
Most lenders require 620+ for approval, but 680+ gets you competitive rates. Credit unions may approve scores as low as 580.
Will refinancing hurt my credit?
Temporarily yes – expect a 5-10 point dip from the hard inquiry. Your score recovers within 3-6 months as you make payments.
How much can I save by refinancing?
Average savings: $71/month. Over a 48-month term, that’s $3,408 in total savings if you drop from 10.45% to 8.45% APR.
