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How Many Times Can I Get An Auto Refinance?

Finance | 03/01/2022 23:00

Whether you are refinancing your car for the first time or the fourth time, you may be wondering “how many times can you refinance a car loan?” Well, we’ve got good news for you! Today we are talking all about auto refinance and how many times you can refinance your car loan. 

Is it Okay To Refinance an Auto Loan More Than Once?

Long story short: there is no limit to the amount of times that you can refinance your auto loan. But there are some questions you should ask yourself if you are thinking about refinance. Auto loan refinancing should have you asking yourself:

  • Do I qualify for refinancing?

  • When did I last refinance?

  • How will refinancing affect my credit?

  • How do I know the time is right to refinance again?

Let’s go through each of these and see if refinancing your car loan more than once is a good idea.

How Can I Qualify To Do Auto Loan Refinance Multiple Times? Should I Refinance Multiple times?

Do you qualify for auto loan refinancing?

First off, do you qualify for refinance? Qualifying for an auto loan refinance will be pretty much the same every time you apply. Here are a few things that lenders will ask:

  • How old your car is

  • How many miles your car has

  • How much money is left on your loan

Most lenders require that your car is less than ten years old and has less than 100,000 miles on it. As your car gets older and depreciates more, refinancing will get more difficult.

It will also depend on how much time and money is left on your initial loan.

Auto loans are front loaded amortized loans. This means that in the beginning of your loan you are paying more in interest, and towards the end of the loan you are paying more towards the principal. For the lender, this means that they will make more money off of you the earlier you are in your loan. For you, this means that you will save more money overall the earlier you are in your loan.

If your loan has less than a year left on it, you will most likely not qualify for refinancing (and it probably wouldn’t be worth it for you in the first place).

When did you last refinance your car loan?

While there is no exact timeline to when you should refinance again, experts recommend that you have 6-12 on time payments with your current lender before you refinance. This will show lenders that you make full, on time, consistent payments to your car loan. It will also help your credit score. When you refinance your car loan, your credit score takes a slight ding from the initial hard inquiry that is made on your credit. After a year, that inquiry will disappear. Having on time payments during this period will also help your credit score, as payment history makes up 35% of your score.

Will refinancing multiple times affect your credit?

Refinancing multiple times will affect your credit, and it’s important to keep that in mind. But that doesn’t mean it will affect it negatively. 

When you refinance, you affect two parts of your credit: your credit history length and your new credit. Remember, refinancing is paying off one loan with a new loan. By getting rid of one account, you are decreasing the age of your accounts. You are also triggering a hard inquiry in your new credit. 

Pro Tip: The inquiries on your credit report last less than one year, so they are only temporary. While multiple inquiries can bring your score down, one or two will not affect you by more than ten or twenty points, so don’t let that scare you off from refinancing your car loan. The new credit category of your credit score only accounts for 10% of your score.

When you refinance, you are aiming to get better terms, whether it is a lower car loan APR or a more manageable repayment plan. Either way, the goal is to save you money and make your monthly payments more doable. So if refinancing will put you in a better position to make full, on time, consistent payments, it will actually help your credit score in the long run.

How do you know the time is right to refinance again?

You should refinance if any of the following apply to you:

  • You can get a better interest rate. If your credit score has improved since your last auto refinance, you may be eligible for a lower car loan APR. Similarly, if the market rates have decreased there may be lower interest rates available to you. This can save you a lot of money in the long run.

  • You need some breathing room in your monthly budget. Refinancing can save you money by lowering your interest rate, and it also allows you to change your repayment schedule. If you need a little more wiggle room in your budget every month, you can change your repayment plan so that you are spying your loan off over a longer period of time. This can free up hundreds of dollars in your monthly budget.

  • You want to add or remove a cosigner. If you want to change who is listed on the loan, you will need to refinance your loan. You cannot simply change who is listed as the borrower.

When does it not make sense to refinance again?

There are times when refinancing your car loan will not make sense for you. 

  • If your car does not qualify or is underwater. If you owe more on the car than the car is worth, or the car is simply too old, you will not be able to refinance. 

  • If there are hefty prepayment penalties. If your existing loan has significant prepayment penalties, the cost of refinancing may outweigh the benefits of refinancing. It’s always important to do the math to make sure that refinancing will be financially beneficial.

  • If there’s less than a year left on your loan. If you have less than a year left on your loan, you may not qualify for refinancing, or it might not be worth it. Do the math and decide if it’s even worth it with so few payments left.

How Can You Tell If Auto Refinance Companies Are Reliable?

You’ve decided that refinancing is a good move for you right now. You can save a lot of money every month, and save money overall at the end of your loan. But how do you decide which auto refinance companies are right for you?

When looking for a new lender, consider a mix of traditional banks, credit unions, and online lenders. You should aim to apply with 3-5 lenders. And make sure to apply to them all within a fourteen day period – this way it will count as one hard inquiry on your credit report. 

The easiest, most convenient, and most cost effective way to do this is to use a company that specializes in auto refinancing, like Auto Approve. We can streamline this process for you and handle all of the tedious paperwork, so that you don’t have to. When the offers come in, we bring them right to you.

Once you have your offers, consider the following:

  • What interest rates are being offered?

  • What are the repayment periods?

  • Are there prepayment penalties?

  • Are there hidden fees?

  • Do they have good customer satisfaction ratings?

It is important to consider all of these aspects of the offer. One of the most important factors however is the customer satisfaction. You want to know that your lender is communicative and transparent. You want to know how your money is allocated between interest and principal, and what fees may be taken out. Issues in communication is the number one complaint with refinancing companies according to the Consumer Financial Protection Bureau. So don’t take this lightly.

We know how important communication is here at Auto Approve. That’s why we pride ourselves on our customer service. Our TrustPilot reviews speak to our commitment to a fantastic consumer experience. We also have an A+ rating with the Better Business Bureau and a 96% would-recommend rating on LendingTree. 

Once you have your offers and compare everything, you will have to decide which lender is right for you. Once you decide, it’s just a matter of filling out the paperwork and signing on the dotted line. And if you use Auto Approve, we can handle all of the paperwork for you. Even the DMV paperwork!

And that’s it – refinancing your car loan again can be that easy!

There is no limit to the amount of times you can refinance your car loan, so you should refinance your car loan as often as it makes sense to do so.

If you are like most car owners, you are overpaying on your car payments every month. But one stop over at Auto Approve can change that. So get started today!


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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 6.24% 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 2860 Vicksburg Lane North Plymouth, MN 55447. 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.