Auto loan rates have been dropping for about six months. Not in large amounts at any one time, but slowly. Fewer people are defaulting and it is costing less for banks to hold auto notes;therefore, rates dip. The current average used car loan interest rate, according to Bankrate.com, is 8%. Just last year it was 10%.
A drop of 2% can mean an average savings of $250 per year or $1,000 more in your pocket over the typical life of a car loan. Some subprime borrowers may have been paying even more. By checking into a refinance, those borrowers may find that they are eligible for much better rates than they were able to secure at the time of the loan origination.
Rates may not be at historical lows, but now could be the right time to refinance your used car and save hundreds if not thousands of dollars over the life of your loan.