Free Auto Loan Refinance Savings calculator with clear step-by-step results.
Reprices the remaining balance of a car loan at a new rate over the same remaining term, so the comparison is apples to apples. Fees are then netted off the lifetime saving and expressed as a break-even period - if you plan to sell the car before that point, the refinance loses money.
Monthly payment
P = B x r / (1 - (1 + r)^-n)
Break-even
Break-even months = refinance fees / monthly saving
Illustrative only. Actual offers depend on credit profile, vehicle age and mileage, and some loans carry prepayment penalties or precomputed interest that change the outcome.
Stretching the term lowers the payment even at the same rate, which makes a bad refinance look good. Comparing at equal terms isolates the effect of the rate.
Enter the longer term in the months field and read the net lifetime saving rather than the monthly figure - it will often be negative even though the payment drops.