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Auto Refinance Calculator

Calculate potential savings from refinancing your auto loan. Compare current vs new terms, analyze break-even points, and make informed financial decisions with our comprehensive auto refinance calculator.

Auto Refinance Calculator

Current Loan Balance ($)
Current Interest Rate (%)
Remaining Months
New Interest Rate (%)
New Loan Term (Months)
Refinance Fees ($)

Refinance Analysis

$766.23
Current Monthly Payment
$578.05
New Monthly Payment
+$188.17
Monthly Savings

Total Cost Comparison

Current Total Cost
$27584.10
New Total Cost
$27746.44
Total Savings
$-162.34

Break-even Analysis

2.7 months
Break-even Point
✅ Refinancing is recommended

When to Consider Auto Refinancing

Good Reasons to Refinance

Lower Interest Rate0.5%+ drop

Significant monthly savings

  • • Market rates have dropped
  • • Credit score improved
Shorter TermPay off faster

Reduce total interest paid

  • • Higher monthly payment
  • • Less total interest
Better LenderBetter service

Improved customer service

  • • Better payment options
  • • More flexible terms

When NOT to Refinance

High Fees$800+ costs

Fees exceed savings

  • • Long break-even period
  • • Minimal monthly savings
Near End of Loan< 12 months

Not enough time to benefit

  • • Most interest already paid
  • • Fees outweigh savings
Credit IssuesPoor credit

May not qualify for better rates

  • • Higher interest rates
  • • Additional fees

How to Calculate Auto Refinance Savings

Monthly Payment Formula

Monthly Payment = P × [r(1+r)^n] / [(1+r)^n - 1]
Where: P = Principal, r = Monthly Rate, n = Number of Months

Calculation Steps:

  1. 1
    Calculate current monthly payment
    Using current loan balance, interest rate, and remaining months
  2. 2
    Calculate new monthly payment
    Using current balance + fees, new rate, and new term
  3. 3
    Calculate total savings
    Compare total costs and determine break-even point

References

  • Kellison, S. G. (2008). The Theory of Interest (3rd ed.). McGraw-Hill. Level Payments/Annuities.
  • Broverman, S. A. (2011). Mathematics of Investment and Credit (5th ed.). ACTEX Publications. Annuities-Immediates.
  • CFA Institute. Quantitative Methods – Time Value of Money. Annuities and amortizing loans section.

Important Considerations

⚠️ Financial Disclaimer

This calculator provides estimates. Consult financial professionals for personalized advice.

💰 Hidden Costs

Factor in all refinancing costs

  • • Application and origination fees
  • • Title transfer and registration
  • • Prepayment penalties on current loan
📊 Credit Score Impact

Refinancing affects your credit

  • • Hard inquiry on credit report
  • • New account affects credit mix
  • • Payment history starts fresh
⏰ Timing Considerations

When to refinance matters

  • • Early in loan term = more savings
  • • Near end of loan = less benefit
  • • Market rate changes
🚗 Vehicle Value

Car value affects refinancing

  • • Loan-to-value ratio limits
  • • Depreciation affects terms
  • • Older cars may not qualify

Example Cases

Case 1: Good Refinancing Opportunity

Current Loan: $25,000 balance
Current Rate: 6.5% (36 months left)
Current Payment: $766/month
New Rate: 4.2% (48 months)
New Payment: $567/month
Monthly Savings: $199

Result: Saves $2,388 total with 2.5-month break-even. Refinancing is recommended.

Case 2: Not Worth Refinancing

Current Loan: $8,000 balance
Current Rate: 5.8% (12 months left)
Current Payment: $691/month
New Rate: 4.5% (24 months)
New Payment: $348/month
Fees: $800

Result: High fees relative to remaining balance. Break-even is 2.3 months, but only 12 months left on current loan.

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