With holiday spending on the horizon, some drivers may find relief not from a side job or a credit card, but from the loan they’re already paying off their car.
Refinancing an auto loan means replacing an existing loan with a new one that pays off the balance, often at a different rate or term. If a borrower’s credit has improved since they first financed their vehicle, they may now qualify for a lower interest rate than they originally received.
Rates have also shifted. According to Federal Reserve figures, commercial bank rates on 60-month new-car loans averaged 8.16% in 2024, compared with 7.54% in August 2026.
How the process works
One option for refinancing is AUTOPAY, a service that connects borrowers with a network of banks, credit unions and other lenders without requiring a trip back to the dealership. Borrowers submit financial, vehicle and loan information online or by phone, and AUTOPAY searches its lender network for available options.
The initial prequalification check uses a soft credit inquiry, which does not affect a borrower’s credit score. After that, applicants complete verification, review the loan contract and sign electronically — all without visiting a dealership or bank in person. There is no application fee.
AUTOPAY offers loans ranging from $2,500 to $100,000, with terms between 24 and 96 months for qualified applicants.
What the savings could look like
Consider a hypothetical borrower who owes $25,000 at a fixed 12% interest rate with 48 monthly payments remaining. That loan carries a monthly payment of about $658.
Refinancing that balance into a fixed 8% loan over the same 48-month term would lower the payment to roughly $610 — a savings of about $48 a month, or $576 over a year. It would also cut the remaining interest owed by approximately $2,305.
Borrowers who want a bigger drop in monthly payments, even without reducing total costs, have another option. Stretching that same 8% loan to 72 months would bring the payment down to about $438 a month. In that scenario, the remaining interest would total roughly $6,560 — not far off from keeping the original 12% loan for its remaining four years.
For drivers weighing holiday expenses against a car payment that’s been on autopilot for years, a quick look at refinancing options could be worth the time.
