Does anyone refinance cars older than 10 years?
A car over 10 years old, for example, typically isn't eligible for refinancing. Salvage title: If your car has a salvage title, it may be challenging to find a lender willing to refinance it.
Typically, a bank won't finance any vehicle older than 10 years, even if you have good credit. If you don't have great credit, you may find it difficult to finance through a bank, even for a new car.
Can I refinance an older automobile? Yes. Commerce Bank finances autos that are new, used and 7 years or older. Simply apply now for a Personal Loan and wait for your loan decision.
Cars depreciate quickly, so you'll likely only be able to refinance within the first few years of owning your car. Some lenders won't refinance cars that are over a certain age or mileage. For example, some banks won't refinance cars that are older than seven years or have more than 90,000 to 125,000 miles on them.
You owe more than the car is worth.
Many lenders won't refinance an “upside-down” car loan, or a loan with a higher balance than the car is worth. Even if you find a lender to refinance a car with negative equity, you'll likely pay a higher interest rate, increasing your overall cost.
Some lenders may turn you down for financing if your car is older than 10 years or has over 100,000 miles on it. Some lenders may have stricter requirements — like eight years or less than 80,000 miles. If your car is too old or has a high number on the odometer, you won't be able to refinance.
Depreciation: Cars lose value as they age and rack up miles. Older cars with high mileage depreciate faster. If you default on the loan, the lender might not recoup their money by selling the car.
Lenders generally have minimum eligibility requirements for refinancing, and some lenders may offer auto refinance loans on vehicles older than 10, including classic or antique cars older than 20. Refinancing may help you lower your auto loan interest rate or lower your monthly payment.
There is no minimum or lowest credit score when refinancing a car. However, the lower your credit score is, the fewer options you'll have for lenders.
There is no minimum credit score required to refinance a car loan. That being said, there is a range that is considered a “good credit score” to refinance a car loan. In general, a credit score over 700 will unlock the best interest rates, and a credit score between 660-700 will give you access to standard rates.
Can you be denied an auto refinance?
A lender might refuse to refinance a car if your current loan is too new, if your car is too old or has too many miles on it, or if your current loan balance is too low or too high. Car age and mileage considerations may differ by lender depending on the make and model of your car.
Key Takeaways
Don't refinance if you have a long break-even period—the number of months to reach the point when you start saving. Refinancing to lower your monthly payment is great unless you're spending more money in the long-run.
High debt-to-income ratio
How much of your money is tied up in paying off debts is a major factor in getting approved for refinancing. Your debt-to-income (DTI) ratio is determined by dividing your total monthly debts (including your current mortgage) by your gross monthly income.
An interest rate under 5% is a great rate for a 72-month auto loan. However, the best loan offers are only available to borrowers who have the best credit scores and payment histories.
As recently as December 2023, the futures market gave March 2024 rate cuts a 77% probability of occurring. Even Fed officials themselves are predicting lower rates soon, with 17 of 19 projecting that the funds rate will be lower at the end of 2024 than it is now.
Can you pay off a 72-month car loan early? Yes, you can pay off a 72- or 84-month auto loan early. Since these are long repayment terms, you could save considerable money by covering the interest related to a shorter period of time.
Financing a 10-Year-Old Car
The process of financing a car that's over 10 years old is pretty simple. It's most likely a much lower cost than other used cars on the lot, so this leads to a lower down payment.
For insurance and registration purposes, the age of a classic car, in most cases, is at least 20 years old but not more than 40 years old. If you are going to register it (and insure it) as a classic, it should have been kept to its original design and specifications.
LendingTree is a Better Business Bureau-accredited company, and the BBB, a non-profit organization focused on consumer protection and trust, gives LendingTree an A+ rating.
Capital One Auto Finance only refinances cars, light trucks, minivans and SUVs that will be used for personal use. Vehicles must be no older than 10 years and have an established resale value.
Is it better to finance a newer or older car?
If you're planning to finance your car, you'll be more likely to get a lower interest rate on a new car than a used one. New cars have a higher resale value and are less likely to have mechanical issues. That means the lender is less likely to lose their investment if you can't make your payments.
Used Vehicles: 2022 and older model years or any model year with over 30,000 miles. Vehicles 20 years or older (based on model year) are considered classic or antique and subject to Other Eligible Vehicle rates.
Refinancing your car loan can be a good idea if it allows you to save money on interest, but it's not the right financial move for every borrower. The best time to refinance is when interest rates have dropped or your credit score and DTI have improved.
For today, April 3, 2024, the current average auto refinance rate for people with Excellent credit is 4.67% for a 36-month loan, 5.55% for a 48-month loan, 5.68% for a 60-month loan, and 6.15% for a 72-month loan. The current average across all credit tiers and loan terms is 8.72%.
- Review your existing auto loan.
- Determine the value of your car.
- Evaluate your credit.
- Gather information for your application.
- Compare lenders and rates.
- Apply to refinance your car loan.
