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Tires 101: Your Guide to Tire Types, Tire Buying and Maintenance

Education | 02/01/2025 20:45
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Whether you’re just buying your first car or thinking about swapping out the tires on an old favorite, there’s a lot to know about tires.


Your tires can make all the difference in how you handle the road and even whether you make it to your destination without issue. If something goes wrong with a tire, it can mean a tire change or even a breakdown.


In this guide, we’ll look at how tires work and what they’re made of, the most common tire types, essentials of tire maintenance, and the basics to consider when it’s time to shop for new tires.


Ready to become an expert on all things tires?

piles of various tires

Buying and Maintaining Tires: What You Need to Know

We spend a lot of time thinking about our cars – picking a car, then gas, parking, maintenance, but tires rarely get as much thought. Let’s take a look at the basics.

Car Tire Basics

Starting from the very beginning, tires are the rubber cushions filled with compressed air that go around the wheels of a vehicle.


Tires are a necessary component of every car, truck, and SUV. The friction created by tire treads is part of the process that allows a vehicle to move forward, so having the right tires and making sure they’re in good shape is important for the proper functioning of your car.


Typically, when you buy a car, it comes with tires and a spare. The cost of these tires is included in the price you pay overall for the car. 


If you’re buying a brand new car, it should come with brand new tires that are standard for your vehicle model. You may also be given the option, when buying from a dealership, to upgrade to specialty tires. If you’re buying a used car, it’s likely that you’re getting used tires and buying them as-is.


As you drive your car over the years, your tires can start to wear down. This wearing down can be accelerated by aggressive driving, harsh road conditions, and other factors. Knowing what to look for and when to repair or replace your tires is a key part of long term car maintenance.

Key Types of Tires

Start by getting to know your tires and learning about the different kinds of tires that might be available to you. For example, many people who live in wintry climates change their tires out in the winter for special winter tires, both to preserve the standard tires and improve their vehicle’s road safety in icy and snowy weather.


The treads on the tire are the part of the tire that make contact with the road, and varying treads and tire sizes make for different road capabilities, from helping you move faster to helping you navigate mud and snow. 


Broadly, tire types vary in:


  • Tire size and vehicle fit

  • Rubber flexibility or durability

  • Tread shape and tread size


Here are all the primary kinds of tires available, and why you might want them (or not).

nice sporty tire on silver luxury car in woods

All-Season Tires

All-season tires are the workhorse of the tire world. They’re the tires your vehicle is most likely to come with, unless you’re driving a vehicle specifically designed for off-road driving, like a Jeep Wrangler.


These tend to be relatively affordable and long lasting, and the gold standard for just a standard set of tires. 


All-season tires come in different sizes and are available for each vehicle category: car, SUV, and truck.

High Performance Tires

There are a few different tire types that fall under the high performance (HP) umbrella, but broadly these are tires designed for sports cars and similar luxury vehicles. They have high handling capabilities but are more expensive and tend to need to be replaced more frequently than standard all-season tires. They aren’t generally available for trucks and SUVs, but may fit some sedans.


They are unique for their softer rubber and grippier treads than standard tires.


There are summer, all-season, and winter versions of high performance tires, and they generally offer a happy medium between all-season and ultra high performance (UHP) tires for second vehicles that won’t be in much inclement weather.


Summer high performance tires are not designed for rain or snow and will not be safe in more than a light rain. All-season high performance tires could hypothetically be used on a family vehicle, but would probably create higher annual tire costs. Winter performance tires are designed to be the winter equivalent of HP and UHP tires for vehicles designed for those tire styles and have improved cold weather grip..


These are not tires designed for daily use or people who live in harsh climates, and could become unsafe or need to be replaced several times a year if used incorrectly. 


However, for those with a sports car that’s used for recreational purposes and the budget to splurge for a tire to match, they can be a great choice.

Ultra High Performance (UHP) Tires

Ultra high performance tires, also known as track tires or racing slicks, are tires specifically designed for driving fast under optimal road conditions in upscale sport and racing vehicles. They tend to have the highest speed ratings available, and can usually perform in wet weather, but aren’t designed for snow and ice and require compromise in ride comfort and tire durability. 


UHP tires are among the most expensive tire options and need frequent replacement. They aren’t generally a practical choice, even for second vehicles, except under very specific circumstances.


There are no or few true UHP winter tire options, so those that use UHPs and want to take a vehicle out in the winter will need performance winter tires, which have a lower speed rating but better cold weather grip. That said, most people who own the expensive and high maintenance vehicles that go with UHPs probably won’t want to take them out in the snow too often anyway!


All-Terrain and Specialty Truck Tires

On the other end of the spectrum, there are all-terrain tires, which are usually large and designed only to fit SUVs and trucks capable of going off-road.


All-terrain tires are specifically designed to be usable both on pavement and on dirt roads or for light off-roading. They are sort of like the hiking boots of tires – they have bigger, deeper treads designed to work in more road conditions, but aren’t so specialized they can’t work for general use. They would be the standard tire option for someone with a Jeep Wrangler or Ford F-150 or similar vehicles.


All-terrain tires also have enough traction to drive in light snow, and for heavy vehicles can sometimes be sufficient to get you through the winter, but generally aren’t considered sufficient for icy conditions. That means, if you live somewhere that regularly gets very icy or snowy, winter tires may still be necessary, but it’ll depend on your vehicle and region.


Off-road tires are the next step up from all-terrain for those who live most of their lives in areas with dirt roads or are regularly driving off pavement. They are more puncture resistant than standard tires and have large, deep treads ideal for getting through mud, sand, and gravel. That said, they’re not designed to be driven on paved roads or at highway speeds. 


They’re a specialty tire only really necessary for people who need to be able to drive on uneven, unpaved terrain more than they drive on pavement.


There are other kinds of specialty tires, usually only used on trucks and off-roading vehicles. The primary others are mud tires and heavy duty tires. 


Mud tires are what they sound like – they have wide blocks and treads designed to release any debris and keep you moving in mud and sand conditions. They’re not as good for crawling over rocks and differ from off-road tires in the way they squeeze and release any mud stuck in the treads.


Heavy duty tires are tires that can take more weight than other tires for those that plan to haul trailers or max out their truck’s payload. Heavy duty tires are unique among specialty truck tires  in that they’re generally good for daily driving and highway driving and tend to offer good durability and longevity.

Winter Tires

Winter tires, sometimes called snow tires, are tires around the level and style of all-season tires, except that they’re specifically designed to make it easier and safer to drive in icy, snowy, and very cold conditions


There are winter tires for every size and vehicle style, car, SUV and truck. What makes winter tires unique is that they have better grip in inclement weather and are made with a specially formulated rubber that stays pliable below freezing. Because of these factors, winter tires aren’t as good in warm weather on clear roads, and should be changed in and out seasonally.


Anyone who lives somewhere that typically has below freezing temperatures all winter long should seriously consider having winter tires for the cold season.

  

Tired of paying too much for your car?

Most people are paying more than they need to on their monthly car payment. 


If you’re one of them, Auto Approve can help you save money and lower your payments by helping you find the best available deal for you. 


Find out if you’re eligible for a better rate with a free, no-commitment quote. All it takes is a few minutes of your time. If you find a better rate, we handle the paperwork, with no markup.


Get a quote now.

muddy old tire on dirt road in black off road vehicle or SUV

Essential Tire Maintenance

Now that you know about the types of tires, how do you keep them in good condition?


Here are the key steps you can take to keep your tires in good condition.


  1. Maintain air pressure.

  2. Get your tires rotated.

  3. Don’t use the wrong tires for your driving needs.

  4. Repair minor punctures and penetrations, and replace when necessary.

How To Know When It’s Time to Get New Tires

There are two key things to think about to help you decide if you need to replace your tires.


The first is general wear. As you use your tires, the treads will wear down. As the treads erode, the tires become less effective. Too little tread and your tire may eventually have trouble gripping the road, which makes it harder to control the vehicle. 


At a certain point of wear, the tires are no longer safe and need to be replaced. AAA recommends replacing tires when the treads hit 1/8th of an inch, because braking distances will start increasing at that thickness.


The second is the tire’s ability to hold air. If a tire has been punctured or penetrated, you may be able to use a repair kit to temporarily patch minor issues, but ultimately, you’ll likely need to replace at least that one tire. 


If your tires are relatively new, you may be able to get away with replacing just one tire (rule of thumb is if the treads are still 30% or less worn down). If your tires are more worn but you want to save money, you can sometimes get away with replacing two tires and leaving the other pair until they’re worn down enough that you have to replace them (especially if you use two-wheel drive). 


Most tire experts, however, recommend replacing all 4 tires any time you need to replace one, to ensure even wear and avoid problems down the line.


Other things to look out for include:


  • Tire sidewall cracks

  • Uneven wear (which could indicate an alignment issue)

  • Shaking, vibrations, or bumpy sensations

  • Bulges and bubbles in the tire rubber

Buying New Tires

When it’s time to buy new tires, here are a few things to look at and consider.


First, you’ll need to make sure any tires you consider will fit your vehicle. Most tire sellers will ask for your vehicle’s exact make and model.


From there you’ll want to consider:


  • What type of tire you want and for what purpose (thinking about the types of tires referenced earlier in this guide)

  • Speed rating (the letter grade given to indicate the maximum speed at which the tire will function optimally over time)

  • Load index and range (the tire’s carrying capacity, if there’s a change you’ll want to transport heavy loads – especially relevant for truck owners)

  • Mileage warranty – any tire purchase you make should come with an expected mileage  before they’ll need replacement, and some tire sellers will sell tires at different price points based on this number

  • Price point – specialty tires may cost more or need more frequent replacement, so make sure you have the full picture and are happy with the price before making any tire purchases


There are many reputable tire makers and sellers, but you may also want to consider buying from stores that will also cover maintenance and that you’re happy having a long term relationship with.

And That’s Everything You Need to Know About Tires

Has this changed your mind about what type of tire you want or need for your vehicle? Are your tires in good condition? You’re now set with tons of information to keep your wheels rolling for years to come. What you choose to do with it is up to you.


Tire changes can be expensive. If you’d like more money in your pocket – for any reason – why not lower your car payment with Auto Approve?


Auto Approve makes refinancing your vehicle simple. And, because dealerships mark up their rates, there are many people right now who qualify for a better rate and a lower monthly payment. 


Find out what you could save with a free quote today.

More Resources

Vehicle Safety in A Heat Wave

Do you know how to drive safely in a heat wave?The dog days of summer are arriving across the United States, and as it gets hotter, our vehicles do too. Just like driving in wintry conditions, driving in extreme heat poses its own unique set of challenges. From dead batteries to tire blowouts to soft tarmac, there’s a lot to be on the lookout for when the thermometer hits a record high.That’s why now is a good time to refresh your knowledge of when you need to worry about car safety in high temperatures, what to look out for, and how to keep yourself safe.Let’s start with the basics.FAQs: Summer Car SafetyTo lay a little groundwork and make sure we're all on the same page, let’s take a look at these frequently asked questions about driving in inclement heat.Is it safe to drive in a heat wave?Yes, broadly it is safe to get on the road in a heat wave, as long as you are prepared and understand the risks. We’ll dive into the details in the next section, but you should: avoid long drivesplan to stop frequentlyhave an emergency kit in your car in case anything goes wrong, and keep a close eye on your engine temperatureHowever, if you follow all the tips in the guide, there is no reason you can’t drive in hot weather by exercising caution and good sense.What temperature is too hot to drive a car?There is no single temperature at which it becomes definitively unsafe to turn on a car, but avoiding driving in unusually high heat is generally good practice, if you have the option. The outside temperature is less important than your engine temperature and the temperature inside your car. If your engine reaches over 220° F, the various fluids that allow your car to run could start burning up – this is where things start to get dangerous. Similarly, the human body needs certain conditions to function properly. Depending on the humidity, temperatures can become dangerous between 95 and 130° F – but you don’t want to risk being at the top of what your body can handle for any length of time. That means, if your car doesn’t have good cooling or if it’s hot enough that you can’t use the AC because your engine is in trouble, you want to avoid being in the car for any length of time. Instead, try to drive early or late in the day when temperatures are lower and keep your car cool.How do you protect your car in 100 degree weather?The best things you can do are park in the shade (or out of the sun), use a sunshade to keep the sun from heating up your car’s interior (or consider getting a car cover if you live somewhere likely to get many days of extreme heat and don’t have a garage at home), and make sure you get your car fully checked over ahead of extreme heat weather to ensure you have enough coolant and fluids, your tire pressure isn’t too high or low, your air conditioner is running smoothly, and your battery’s in good shape. A fresh wax and an oil change can also help protect your vehicle from deteriorating due to extreme heat.Want a little extra wiggle room in your budget for heat-proofing your vehicle?Put more money back in your wallet by refinancing your vehicle. Most people are eligible for a lower rate than they’re paying. That means paying less monthly and over the life of your loan.With Auto Approve, you can get a quote in just a few minutes, no commitment required. And if you like what you see, we do the paperwork for you.Get a free quote to see how much you could save.Safety Tips For Driving in a Heat WaveLet’s get into the nitty-gritty of car safety in extreme heat. When driving in very hot temperatures, you should…1. Keep an Eye on Your Vehicle’s Fluids, Engine Heat & Tire PressureThe most dangerous thing that can happen when temperatures get too high is your vehicle overheating – your battery, tires, and engine are at highest risk of this, and anything with a fluid can have issues if your vehicle’s systems get too hot.In an emergency situation, especially if you see steam or smoke coming out of any part of the vehicle, pull over right away.If you’re concerned or if your vehicle’s engine heat warning light comes on, turn your heat on until you can find a place to pull over. It might feel counterintuitive, but will pull heat away from your engine.You can and should have your vehicle checked ahead of the hottest part of the summer to ensure all the systems and fluids are in top working order to avoid any issues.Avoiding long drives in the hottest part of the day can also help you keep any part of your car from reaching dangerous temperatures. Ideally, you don’t want to drive more than two hours at a time on days with extreme heat. Think of it like driving in a snowstorm – just because it’s not visibly coming down on you, it’s no less dangerous to be on the road in high heat.2. Carry Water & Emergency SuppliesAn emergency kit is a must for every car, and having one tailored to the heat for summer is essential in a heat wave. There are pre-made kits for heat exhaustion and high temperatures, or you can put together your own.Your kit should always, year-round, include car safety kit essentials like:Jumper cablesTire repair & replacement kitSpare tireFirst aid kitPaper mapLight, non-perishable snacks and drinksFlares or reflective triangles Spare phone chargerIn the summer, you want to think about the unique challenges of a hot sunny day and add items to help prepare for that, like:SunscreenHatBug sprayLightweight blankets or other materials to protect you from the sunReflective sunshade for your windshieldMisting fan, cooling towels, cold compress, or cooling patchesA thermometer in case of heat exhaustionAlways, always, pack lots of water and electrolyte fluids or powders to avoid dehydration.And remember – never leave a pet or child alone in a hot car.3. Park SmartA simple but effective way to keep yourself and your car at a reasonable temperature is to avoid parking in the sun. Take any chance you can to park in the shade, in a garage, or in a covered parking lot – when you start with a lower car temperature, it’s easier to maintain.We’ve mentioned a sunshade a couple times in this guide, but here’s one more plug to pick one up – they can be an effective way to keep the interior of your car cool, and there are relatively inexpensive universal and model-specific models that fold up neatly into the back of your car. Car covers can be more of a hassle to get on and off, but can be a big help if you don’t have a better parking option and will regularly need to park your vehicle in the sun during hot days.4. Avoid The Hottest Parts of the DayIf you must drive during a heat wave, driving in the morning or evening when the air is a few degrees cooler is a smart move. Try not to run errands at high noon if they’re something you could do at night instead. And, again, if you must be on the road in the heat, make the trips short and stop frequently. Plan smart. Summer’s not the best time to take a road trip through the Mojave desert (but a great time for a road trip up the Northeast coast!). 5. Keep An Eye on The RoadOne final danger to think about is the road during very high heat days. When temperatures rise, tarmac can soften, potholes can open up, and other drivers can be more prone to overheating and vehicular issues. Make sure that, even on familiar roads, you’re paying attention to the terrain and the cars around you to keep yourself safe.As the driver of your vehicle, you are an essential part of everything working correctly. Being too hot or dehydrated can lead to confusion, illness, and exhaustion, so make sure you take care of yourself as well as the car.Now You Know How To Take Care of Your Car In SummerExtreme heat has become a staple of summers in the US. Make sure you’re ready for anything the next time a heat wave hits.Remember these key points:Use every tool you can to keep your car cool when you’re not drivingAvoid the hottest part of the day and long driving stintsCarry emergency supplies, and especially waterGet your vehicle fully checked to avoid the worstPull over as soon as possible if you see steam, smoke, or an engine heat warning lightRemember that heat affects the road and other drivers as well as you and your vehicleTake care of yourself and avoid unnecessary risksFollow these tips to keep your vehicle in tip top shape on even the hottest days and you should be able to drive smart and safe all summer long.And one more tip? Refinance with Auto Approve and save on your monthly auto loan payment!Summer means high heat, but it also means vacation and fun in the sun. Refinance to put more of your money back in your wallet for the things that matter most to you.Thanks to dealership markups, most people are paying a higher rate than they need to be on their vehicle loan. Refinancing can help you secure the best rate you’re eligible for. When you get a free quote from Auto Approve, one of our representatives will work with you to find the deal that makes the most sense for you – then do the paperwork for you, making refinancing simple.Get your free quote now.

Smart Money Moves to Make When You Have A Little Extra Cash In Your Pocket

“What can I do with $500?”It’s one of the internet’s most-asked personal finance questions. Well, here at Auto Approve, we’re always saving people money. After all, refinancing your auto loan can save you anywhere from a few hundred to several thousand dollars over the life of the loan! That means we’ve had some time to think about what your next step should be.Whether you have a few hundred or a few thousand dollars back in your pocket, here are 5 smart things to do when you have more money back in your wallet!The Best Thing to Do When You Have Surprise CashAlways speak to an advisor about your unique financial situation before making any big moves. Everyone’s personal finance journey is unique, so these may not all apply to you. Hopefully you can find an idea for your money (or a combination of these suggestions!) that sounds just right.1. Put it in savingsA simple, elegant solution for any windfall, putting your money in savings – especially a high yield savings account, if you have the option – is a great way to set up your future self for success. Savings are important for so many reasons, from lowering financial stress to ensuring you have future freedom.Most Americans aren’t hitting savings recommended targets for emergency funds and retirement. While this bit of extra cash in your wallet might not feel like enough to get you there, any amount is a good start!Ideally, money you save should start to grow with interest so you can keep earning a little extra pocket change on autopilot. Many high yield savings accounts have no minimum balance, so you can even start earning a few percent on just $500 – although the more you can add to the account to grow it, the better.2. Pay down debtDepending on your overall financial situation, you may want to use any extra cash to knock off some debt. If you have debt with a relatively high interest rate – like credit card debt – paying off even a portion of the balance will save you from paying more interest than you need to in the long run.Having less debt has financial and psychological benefits! It can reduce stress as well as expenses. Plus, reducing your credit utilization ratio and debt-to-income ratio can raise your credit score and make you more eligible for future loans should you want to make a big purchase down the line.And if you have a larger chunk of debt, it might be worth consolidating your debt while you’re at it. Consolidating your debt means bringing all your debt together under one umbrella (or fewer umbrellas, at least, depending on the nature of your debt). It can help you get more favorable terms and simplify the money management and payment process.Use the extra cash toward your first payment(s) and take time to figure out how you can build a budget and make changes in your spending to avoid future issues.3. Put it in an index fundConsider growing your money by putting it in an index fund.An index fund lets your money rise (and fall) with the stock market. If you can handle a little risk and won’t need the money in the immediate future, putting it in an index fund is a good way to enter the stock market for the first time and to ensure you have money at least matching the rate of inflation. That means your $500 today will be worth the equivalent of $500 several decades from now – or, ideally, more. After all, historically speaking, the stock market has always trended upwards in the long run, so even when things are down, the best advice is usually just to hang on and it’ll work itself out. This is especially true of index funds that don’t rely heavily on one company’s success or failure but rather act as a picture of the market overall.Wondering where to get some extra cash to get started? Consider refinancing! Refinancing allows you to get the best rate you’re eligible for and to change the term of the loan, meaning you can pay less per month and pay less interest overall. Most people who got their auto loan from a dealer can save money thanks to marked up dealership rates!Get a free quote to see how much you could save.4. Start a side hustleIf you want to grow your extra cash into more extra cash, why not use it to start a side hustle? Whether there’s something you love to do or something you’re good at that might be in demand, a little investment can go a long way to get you started. Popular side hustles include things like cottage baking, photography, design, selling things from your garden, or skills learned for work like accounting, personal assistant work, coaching, and so on.If you want to get started with a side job, some things you might consider spending the extra money on could include:EquipmentSoftwareIngredients or materialsA websiteA small standMarketingCourses to build your skillsCertifications to make yourself more marketable5. Spend it on someone or something you loveSo you have a little extra money in your pocket. If you’re in good financial shape otherwise, you can use it as an excuse to treat yourself, your friends, your partner, or your family!Experiences and fun aren’t without inherent value. A great meal might inspire you to cook differently at home. Guitar lessons might feed your soul. A vacation could expand your horizons and help you feel refreshed. And fun is important just for the sake of fun! Even with just a few hundred dollars, you could plan a road trip or find ways to add more excitement and joy to your year.And those are 5 great ways to make the most of $500 (or more!)Which option is right for you and your money? Only you can say. But hopefully, these ideas have given you a jumping off point to get started making your extra cash go further.Put more money in your pocket with Auto Approve.Is refinancing right for you? Find out how much you could save in just a few minutes! Tell us a bit about your vehicle and current loan to see your refinancing options – no commitment or hard credit check required unless you decide to move forward with refinancing! When you get a free quote, an Auto Approve representative will work with you to find the right option for you, then do the paperwork for you when you find a loan that’s right for you.Get your free quote now.

How Does Car Refinancing Work?

Maybe you’ve heard of refinancing, but what is an auto loan refinance, and how does car refinancing work? These are good questions to ask, especially if you want to save money, because, yes – a refinance can, in most cases, help you put a little cash back in your pocket.But how? In this article, you’ll discover what refinancing is, how car refinancing works, and how it may be beneficial for you to do right now.In short, we’re here to answer all your burning questions about the how, what, and why of refinancing a car.How Does Car Refinancing Work? Your Questions, AnsweredLet’s start with the basics.What is a Car Loan?A car loan is a secured loan that can help you finance a new or used car. A car loan works in a similar way to other types of loans. A financial institution will pay for your car and you will repay them in monthly installments with an additional fee (interest). Your car acts as collateral and, if for any reason you cannot repay the lender, your car will be taken away. It's because these loans have this collateral that they're considered "secured."What is Refinancing?Simply put, refinancing is paying off an existing loan with a new loan, ideally a loan that has better terms. Refinancing a car to better terms often results in saving money, either in the long run by reducing the payment period or interest rate, or in the short term by reducing monthly payments.What are the Benefits of Refinancing?There are many! Here’s a few of the top ones.1. Save Money with a Lower Interest Rate You may be able to secure a lower interest rate! This is true when rates fluctuate, when your personal financial situation improves, and – commonly – when you didn’t get the best rate available to you in the first place. Many people who financed their vehicles through dealers received marked up rates, meaning they’ve been eligible for a better deal from the get-go. This is the primary motivator for people to refinance. By lowering your interest rate, you are lowering your monthly payments and will end up saving money over the course of the loan.2. Save Money with a Shorter Payment Period When you refinance, you may be able to change the terms of your payment period and shorten the period. This can save you money overall, as the sooner you pay back the loan, the less interest you will ultimately pay.3. Reduce Your Monthly Payments with a Longer Payment Period If money is a bit tight for one reason or another, car refinancing may allow you to lengthen your payment period. This will allow you to pay off the loan over a longer amount of time, reducing your monthly payments significantly. You will end up paying a bit more over the length of the loan because you will be paying interest for a longer period of time, but it can give you breathing room if you need it.Benefits sounding pretty good?If you’re already convinced, find out how much you can save right now with Auto Approve. With just a little information about your car and current loan, we can help you get a sense of how much you could save, no commitment required. Get your free quote now!When Should You Refinance?Now that we know what a car refinance is and what’s so great about refinancing, let’s talk about timing.1. When Interest Rates Are LowRefinancing is all about striking when the iron is hot. And by that we mean when the interest rates are hot. Interest rates are adjusted based on how the economy is performing. If the economy is not performing well, or is anticipated to not perform well, banks will lower their interest rates to encourage spending. If interest rates are lower than when you first took out your auto loan, it may be a good time to consider refinancing. Rates have fluctuated greatly over the past several years, so there is a good chance you can get a lower APR now than you could previously.2. When Your Credit Score Has ImprovedInterest rates are largely dependent on the finances of the applicant. Your credit score is one of the most important factors in securing an auto loan with good terms. Credit scores are generally categorized by the below parameters:800 to 850: Excellent credit740 to 799: Very good credit670 to 739: Good credit580 to 669: Fair credit300 to 579: Poor creditIf your score has increased from good to very good (670 to 740), or from very good to excellent (740 to 800), it could be a great time to consider refinancing. The most favorable rates and terms are given to those with very good and excellent credit. Even if your score has increased within your bracket, but you haven’t crossed into a better category, it still might be worth getting a few quotes to see if you can get a better rate. 3. When Your Income Has Decreased or Your Expenses Have IncreasedIf money is tight due to a loss of income or an increase in other monthly expenses, refinancing might be a good option to give your wallet some breathing room. If you lengthen your payment period, you can pay off the loan over a longer amount of time, reducing your monthly payments significantly. When Should You Hold Off On Refinancing?There are some situations where refinancing might be the wrong choice. Here’s a quick rundown.1. When Your Existing Loan Has Prepayment PenaltiesSome loans build in prepayment penalties to offset the lost interest that comes with paying a loan off early. These penalties can be quite high, so it is important to read the terms of your loan and decide if the savings from refinancing will outweigh the fees from prepayment. If you are unsure, call your lender directly to find out how much it will cost.2. When You Need a High Credit Score for Another ApplicationWhenever you apply for a loan or credit card there is a credit check, and hard credit checks (as opposed to soft checks) and new lines of credit can negatively affect your credit score for about a year.This is because how new your credit is affects your score – but, as long as you maintain a good history of paying on time, this new credit will actually help your score in the long run. And, fortunately, there's a fourteen day window allowed by the big three credit bureaus that allows for all credit inquiries in that span to count as one credit hit.All that said, if you're applying for a mortgage or starting a new lease, it might be wise to wait until after that is settled to refinance your vehicle.3. When The Timing of Your Loan Isn’t RightWhile you can technically refinance at any time during the life of your loan, there are certain times where it will not make sense or be beneficial to refinance. You’ve had your existing loan for less than six months. It takes some time for your credit score to bounce back after taking out a loan, so waiting at least six months will be helpful if you hope to get a better interest rate than before. If this is your first loan, it is recommended to wait at least a year to prove that you have a history of on time payments.You have less than two years left on your loan. Car loans accrue interest over time. Because of amortization, your earlier payments pay off more interest than your later payments. As you near the end of your loan, you are paying less and less on interest and more and more on principle. The longer you wait to refinance, the less beneficial it will be to do so.How Do You Refinance a Car?If it seems like car refinancing might be a good idea for you, you can start the process of refinancing today. It's a hassle-free process (especially when you use Auto Approve!) and can save you money in the short and long term. Here’s how.1. Do Your ResearchMake sure you are as prepared as possible. Request a credit report, which you can do once per year for free, and make sure your credit score is good. Check that everything is accurate on your report. You can petition the credit bureau if there are any inconsistencies or errors. Look at your current loan contract and make sure you are aware of any penalties for which you may be responsible. Call your lender directly if you have any questions or want to review any of the fine print.2. Apply to a Few Different LendersThe application process is similar to your original car loan application. You will need the following to get started:A Photo ID, such as a passport or driver’s license.Your vehicle’s information, which may include the bill of sale, VIN number, make, model, and year of your car.Proof of income and financial history, which may include pay stubs, banking information, and your credit report.  Proof of residence, such as a mortgage statement, lease agreement, or utility bill. Note that PO boxes are not acceptable as proof of residence.Proof of insurance. 3. Compare Rates After all of your applications are submitted, you should start hearing back with different car loan APRs and terms. Compare all of your offers and choose the one that gives you the best rate and makes the most sense for your personal situation. When you use Auto Approve for this process, one of our agents will talk you through the best options and help make sure you understand your new contract completely. (Oh, and when you refinance with Auto Approve, there are no mark-ups, so you're actually getting the best rate available every time!)4. Sign and Start Saving MoneyOnce you have picked the best car refinancing option, sign on the dotted line and start seeing the benefits of refinancing immediately. Yay!That’s Everything You Need to Know About How Car Refinancing WorksRefinancing your car loan is a simple process that can save you a boatload of money.Auto Approve can make this process even easier and simpler for you! Just fill out some basic information and we can help you start comparing rates today. We never mark up your rates, because we're passionate about passing the savings right on to you. So if you're thinking, “Boy howdy, I better get to refinancing now!,” contact us today, cowpoke! (Seriously, what are you waiting for?)GET A QUOTE IN 60 SECONDS
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*APR and Fees Disclosure: Auto Approve works to find you the best Annual Percentage Rate (APR), which is based on factors like your credit history, vehicle and desired payment terms. Fees to complete your loan refinance vary by state and lender; they generally include admin fees, doc fees, DMV and title. Advertised 5.49% APR based on: 2019 model year or newer vehicle, 730 minimum FICO credit score, and loan term up to 72 months. All loans subject to credit and lender approval.
Auto Approve has an A+ rating with the BBB and is located at 5775 Wayzata Blvd, Suite 700 #3327 St. Louis Park, MN 55416-1233. Auto Approve works to find its customers the best terms and APR, which are based on factors like credit history, vehicle, and desired payment terms. Loan amounts, costs, and fees vary by state and lender; they generally include admin fees, doc fees, DMV, and title fees, depending on the lender and period of repayment. There is no fee to obtain a quote and all refinancing-related costs are included in the amount financed so there are no out-of-pocket costs! For more information, please go to AutoApprove.com.