Most lenders won't refinance a vehicle that is older than 10 years old or greater than 140,000 miles. It must be 2010 or newer with less than 140,000 miles.

Vehicles must be newer than 10 years old

If you have recently purchased a car and aren’t as happy with the current loan terms as you would like to be, auto refinancing may seem like the only option left. But the real question is, how long should you wait before refinancing your car? The answer is that there is no definite time.

Apart from timing, there are other factors at play when it comes to refinancing a vehicle. The simple way to see it is that by refinancing, you should get everything your current loan is not giving you.

What is the Rule of Thumb?

While there isn’t any restriction on the length, it is generally recommended to wait for some time and not jump into it immediately. Furthermore, you can consider the following rules of thumb:

  • Between the original loan and auto refinance, you should take a break of at least 60 to 90 days. This is because it usually takes this long to transfer the existing title on your car. Unless the transfer is complete, no new lender will consider your refinancing request.
  • Only if you have an amazing credit score can you consider refinancing early.
  • If your credit score is somewhere between fair to good, you should wait for at least six months.
  • If this is the first time you’re considering taking a car loan, it is reasonable to wait for a year before considering auto refinance. This is because first-time borrowers need a credible payment history before they jump off to a new loan.

The Bottom Line

Before you think about auto refinancing, take your time to understand why you would like to consider it. If it’s a general dissatisfaction with the existing loan terms, you may want to reflect on where you went wrong with the original loan.

If it’s due to a bad credit score, take your time to improve it. If it’s because of the lender’s policies, shop around and do your research. No matter the reason for refinancing your vehicle, do not jump into a new thing just because it seems like a better deal compared to what you have now. Find out what you want to get out from auto refinance and speak to those who have already been in the same situation.