Your credit may have improved since you first bought your car. However, external conditions can also cause the market interest rate to decrease over time. Therefore, refinancing your car helps you get a lower interest rate.
According to RateGenius, a leading vehicle refinance platform in the U.S., the average interest rate on the original car loan was 14%. In comparison, the rate after refinancing halved down to 7%. That shows that vehicle owners can get a significantly reduced interest rate through refinancing.
With a lower interest rate, you’ll have the option to make higher monthly payments. Making higher payments allows you to pay off the debt faster and help grow your net worth. People with less debt tend to lead less stressful lives.
Studies demonstrate that refinancing vehicle loans may save money. More consumers discover the benefits of vehicle refinancing each year. Refinancers saved an average of $1,158 in 2021, according to RateGenius.