How to Refinance Your Auto Loan and Save Money

If you’re like most drivers, your original car loan might not be doing you any favours anymore. Whether your credit has improved, your monthly budget has changed, or you just want better terms, refinancing your auto loan could be one of the easiest ways to put more money back in your pocket.

Let’s walk through how to refinance your car loan the right way, when it makes sense to do it, and how to lock in better used car loan rates—even if you started out with bad or no credit.

What Does It Mean to Refinance a Car Loan?

Refinancing means replacing your existing car loan with a new one—ideally with a lower interest rate, smaller monthly payments, or a shorter term. You’re not buying a new car. You’re just restructuring the financing on the one you already have.

It’s a smart move if:

• Your credit score has improved since you first financed

• Interest rates have dropped

• Your current loan has a high rate or unfavorable terms

• You need to free up monthly cash flow

1. Check Your Current Loan Details

Start by reviewing your current loan agreement. Make sure you know:

• Your interest rate

• Monthly payment amount

• Remaining balance

• Time left on the loan

• Any early repayment penalties

Understanding where you’re starting from will help you compare new offers and avoid surprises. Don’t assume refinancing will automatically save money—run the numbers first.

2. Know Your Credit Score

Your credit score is one of the biggest factors that affects your refinance offer. If your score has gone up since you took out the loan, you’ll likely qualify for better terms.

Even if you started with a no credit car loan, refinancing gives you a shot at reducing your rate once you've made consistent payments. Lenders see that as a sign of improved creditworthiness.

If your score is still on the lower end, don’t worry—AutoPlug works with a range of lenders who specialize in used vehicle financing for all credit situations.

3. Shop Around for New Rates

Now’s the time to compare options. You don’t want to refinance just for the sake of it—you want to save money. Look for lenders offering lower used car loan rates than your current one.

AutoPlug, for example, connects BC drivers with multiple lenders in one go—so you can find the best rate without bouncing from site to site.

You can also apply for a car loan online to get pre-qualified before committing. This step won’t impact your credit if it’s a soft inquiry.

4. Use an Online Calculator to Compare Offers

Before locking anything in, use a refinance car loan calculator to plug in your current loan details versus the new offer. Look at the total cost of the loan, not just the monthly payment.

Sometimes, a lower monthly payment comes with a longer term—which might mean you pay more in interest overall. Always compare:

• Interest rate

• Total amount paid over the life of the loan

• Term length

• Monthly payment

Make sure the refinance aligns with your financial goals—not just what looks good today.

5. Apply and Finalize Your New Loan

Once you've found a lender and an offer that makes sense, go ahead and apply. You’ll likely need to provide:

• Proof of income

• Proof of insurance

• Vehicle information (VIN, mileage, title)

• Your current loan statement

Once approved, your new lender will typically pay off your old loan directly. You’ll then start making payments to them under the new terms.

The process is quick—especially when you apply for a car loan online through services like AutoPlug.

Final Thoughts

Refinancing your auto loan can be a smart financial reset. It gives you a second chance to secure better rates, lower your monthly costs, or pay off your vehicle faster.

Whether you started with a no credit car loan, or you’ve just outgrown your original financing, it’s worth taking a few minutes to explore your options. With the right approach and the right lender, you could save hundreds—or even thousands—over the life of your loan.

Need help getting started? AutoPlug makes it easy for BC drivers to compare offers, apply online, and find better financing—fast.

Ready to save? Let’s get you refinanced.