This article may contain references to products or services from one or more of our advertisers or partners. We may receive compensation when you click on links to those products or services. Nonetheless, our opinions are our own.
The information presented in this article is accurate to the best of our knowledge at the time of publication. However, information is subject to change, and no guarantees are made about the continued accuracy or completeness of this content after its publication date.
- What Is Car Refinancing?
- How High Mileage Affects Refinancing
- Important Factors That Influence Refinancing
- When to Consider Refinancing
- Benefits of Auto Loan Refinancing
- Choosing a Lender for Refinancing
- Evaluating Your Loan Options
- Steps to Prepare for Refinancing
- Potential Challenges in Refinancing High-Mileage Cars
- Types of Refinancing Options Available
- Making the Right Financial Decision
- Does It Actually Save You Money?
- Summary of Refinancing a High-Mileage Auto Loan
-
Frequently Asked Questions
- What does it mean to refinance a car with high mileage?
- Can I refinance my car if it has high mileage?
- What factors should I consider when refinancing a high-mileage car?
- Will my high-mileage car affect my refinancing options?
- How can I improve my chances of getting approved for refinancing?
- What should I do if my car’s value is lower than my loan balance?
- How can I find the best refinancing rates?
- Are there lenders that specialize in high-mileage vehicles?
- What documents do I need to refinance my car?
- Is refinancing risky?
- Can I refinance more than once?
- Recommended Reads
What Is Car Refinancing?
In simple terms, refinancing is the process of replacing your current car loan with a new one, often with better terms. It might involve a lower interest rate, a different loan duration, or switching lenders entirely.
You may want to consider refinancing if your credit score has improved or if market interest rates have decreased. Even a modest reduction in your rate could lead to meaningful savings over time.
How High Mileage Affects Refinancing
Why does high mileage matter to lenders? Cars with significant mileage typically have a lower market value. This increases the lender’s risk because, in the event of default, the car’s resale value may not cover the outstanding loan balance.
This affects your loan-to-value (LTV) ratio, which compares what you owe on the loan to what the car is worth. High mileage often lowers your car’s value, potentially pushing your LTV above 100%, also known as being “upside down” or “underwater” on your loan. This situation can make refinancing more difficult.
If you plan to refinance, you’ll need to be transparent about the vehicle’s current condition. Maintenance records and recent upgrades can demonstrate that, while the odometer may be high, the car is still in good shape.
Important Factors That Influence Refinancing
- Credit Score: A higher score can unlock more favorable interest rates.
- Vehicle Condition: Maintenance history and current condition are crucial.
- Loan-to-Value Ratio: The balance owed compared to your car’s market value.
- Income Stability: Demonstrating stable income supports your application.
- Loan History: A strong payment track record improves your standing.
- Length of Ownership: Cars owned longer may be less favorable due to depreciation.
- Market Value: Popular models retain value and appeal to lenders.
When to Consider Refinancing
Timing is important. Consider refinancing when:
- Interest rates dip below your current loan rate.
- Your credit score has significantly improved.
- You are in a more stable financial position.
Cars in demand may carry better resale value, improving your refinancing odds. Assess recent market data to see where your vehicle stands.
Note: As of 2025, interest rates for auto loans have been affected by recent economic shifts and central bank policies. Checking current rates frequently can help you find the best time to refinance.
Benefits of Auto Loan Refinancing
Refinancing may:
- Lower your monthly payment.
- Reduce total interest paid over the life of the loan.
- Shorten your loan term to build equity faster.
These benefits can free up money for other financial goals while improving your loan conditions.
Choosing a Lender for Refinancing
Shop around and compare:
- Interest rates.
- Loan terms.
- Fees.
Consider credit unions, traditional banks, and online lenders to find a competitive offer that fits your situation.
Voted "Best Overall Budgeting App" by Forbes and WSJ
Monarch Money helps you budget, track spending, set goals, and plan your financial future—all in one app.
Get 50% OFF your first year with code MONARCHVIP
Evaluating Your Loan Options
Weigh benefits against costs by looking at:
- Remaining loan term.
- Current interest rate.
- Type of lender.
Ensure your refinanced loan will result in genuine savings rather than increased costs.
Steps to Prepare for Refinancing
- Gather necessary documents: proof of income, loan details, and vehicle records.
- Check your credit score.
- Ensure maintenance records are available to demonstrate vehicle condition.
- Compare lender offers to find favorable terms.
Potential Challenges in Refinancing High-Mileage Cars
- Some lenders charge higher interest rates for high-mileage vehicles.
- Certain lenders may not refinance at all if mileage is too high.
- Review your existing loan for prepayment penalties.
- Be prepared for a limited pool of lenders willing to refinance.
Types of Refinancing Options Available
- Auto Loan Refinancing: The most common option; often no appraisal is required.
- Cash-Out Refinancing: Borrow more than you owe; not always available for high-mileage cars.
Making the Right Financial Decision
If refinancing brings financial relief without compromising reliability, it may be a smart choice. However, it’s not suitable for every situation. Review all terms carefully before proceeding.
Does It Actually Save You Money?
To determine if refinancing makes sense, compare your current loan terms with available alternatives:
| Loan Aspect | Current Loan | Refinanced Loan |
|---|---|---|
| Loan Amount | $15,000 | $15,000 |
| Interest Rate | 7% | 5% |
| Term | 60 months | 48 months |
| Monthly Payment | $300 | $350 |
| Total Interest | $3,000 | $1,500 |
Note: Although the monthly payment increases from $300 to $350 due to a shorter loan term, the total interest paid decreases significantly, resulting in overall savings. Shorter terms typically raise monthly payments but save money over the life of the loan.
Summary of Refinancing a High-Mileage Auto Loan
Refinancing a high-mileage car may not be the first solution that comes to mind, but under the right conditions, it can ease your financial burden. By researching your options, being realistic about your vehicle’s value, and understanding the terms involved, you can make an informed decision.
Whether you’re behind the wheel of an old favorite or simply trying to make a smart money move, financial flexibility starts with knowing your options.
Frequently Asked Questions
What does it mean to refinance a car with high mileage?
It means replacing your current loan with a new one, possibly with a better interest rate or term, even if the car has many miles.
Can I refinance my car if it has high mileage?
Yes, although high mileage may affect your eligibility or the interest rate offered. Lenders assess the risk based on your vehicle’s condition and value.
What factors should I consider when refinancing a high-mileage car?
Look at the current interest rate, your credit score, the vehicle’s market value, the remaining loan balance, and any associated refinancing fees.
Will my high-mileage car affect my refinancing options?
Yes. Some lenders may offer less favorable terms or may not approve refinancing at all if the car has high mileage.
How can I improve my chances of getting approved for refinancing?
Maintain good credit, provide complete vehicle maintenance records, and shop around for lenders who are more flexible.
What should I do if my car’s value is lower than my loan balance?
If you owe more than the car is worth, refinancing could be difficult. You might need to pay down more of the loan or consider other options like a personal loan.
How can I find the best refinancing rates?
Compare offers from banks, credit unions, and online lenders. Look specifically for those that work with higher-mileage vehicles.
Are there lenders that specialize in high-mileage vehicles?
Yes, some credit unions and online lenders offer more flexibility for high-mileage vehicles. Always review their terms carefully.
What documents do I need to refinance my car?
You’ll typically need proof of income, current loan details, insurance documentation, and the vehicle’s VIN. Maintenance records may also help.
Is refinancing risky?
It can be, especially if it results in a higher interest rate or longer loan term. Always evaluate the total cost of the new loan before committing.
Can I refinance more than once?
Yes, but repeated refinancing can affect your credit score and lead to extra fees. Only refinance again if it offers clear benefits.
Reviewed and edited by Albert Fang.
See a typo or want to suggest an edit/revision to the content? Use the contact us form to provide feedback.
At FangWallet, we value editorial integrity and open collaboration in curating quality content for readers to enjoy. Much appreciated for the assist.
Did you like our article and find it insightful? We encourage sharing the article link with family and friends to benefit as well - better yet, sharing on social media. Thank you for the support! 🍉
Article Title: Can You Refinance a Car With High Mileage?
https://fangwallet.com/2025/07/24/can-you-refinance-a-car-with-high-mileage/The FangWallet Promise
FangWallet is an editorially independent resource - founded on breaking down challenging financial concepts for anyone to understand since 2014. While we adhere to editorial integrity, note that this post may contain references to products from our partners.
The FangWallet promise is always to have your best interest in mind and be transparent and honest about the financial picture.
Become an Insider
Subscribe to get a free daily budget planner printable to help get your money on track!
Make passive money the right way. No spam.
Editorial Disclaimer: The editorial content on this page is not provided by any of the companies mentioned. The opinions expressed here are the author's alone.
The content of this website is for informational purposes only and does not represent investment advice, or an offer or solicitation to buy or sell any security, investment, or product. Investors are encouraged to do their own due diligence, and, if necessary, consult professional advising before making any investment decisions. Investing involves a high degree of risk, and financial losses may occur including the potential loss of principal.
Source Citation References:
+ Inspo
There are no additional citations or references to note for this article at this time.
