Auto Loan Refinance Savings

Free Auto Loan Refinance Savings calculator with clear step-by-step results.

About Auto Loan Refinance Savings

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.

Formulas

Monthly payment

P = B x r / (1 - (1 + r)^-n)

Break-even

Break-even months = refinance fees / monthly saving

Worked example

With the default values below, Auto Loan Refinance Savings returns Monthly payment saving of $25.50. Change any input above and every figure here is recalculated in your browser.

Inputs used

Balance to refinanceminimum 0 $: 18,000 $
Current APRaccepts 0–40 %: 8.5 %
New APR offeredaccepts 0–40 %: 5.4 %
Months remaining on the loanaccepts 1–120: 36
Refinance and title feesminimum 0 $: 300 $

Results

Monthly payment saving: $25.50
New monthly payment: $542.71
Net saving after fees: $618.03
Months to recover the fees: 11.8

Step by step

1Values used
2Monthly payment
3Break-even
4Monthly payment saving= $25.50
5New monthly payment= $542.71
6Net saving after fees= $618.03
7Months to recover the fees= 11.8

Assumptions and limits

The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
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.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

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.

Frequently Asked Questions

Why hold the term constant?

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.

What if the new loan has a longer term?

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.