Fox Business96%
Auto loan refinancing: How it works and when it could save you money 49%
8/8/2026, 10:30:54 AM
Keywords: Auto Loan, Refinancing, Save Money, Monthly Payments, Credit Union, Interest Rates, Affordability, Inflation, Car Value, Loan Term
BS Summary: This article contains 21 faulty reasoning types, including Optimism Bias, Self-Serving Bias, and False Dilemma, with Loss Aversion as the most egregious example at 12.7% saturation with 82 hits. Analysis detected 834 faulty-reasoning hits from 646 analyzed words, generating a BS Score of 41.8% and a BS Rank of 49% (15,728 of 30,584 articles). This article is better (less manipulative) than 51.40% of the article peer group.
Household affordability challenges are leading some consumers to consider refinancing their auto loans to save money on monthly payments.
Stephanie Roberts, director of auto products at PenFed Credit Union, told FOX Business that expanded access to credit terms has allowed consumers to more easily check the rates available to them as they consider refinancing.
"I think consumers from a credit education standpoint are more educated than ever on the health of their credit, so they're taking out those refinances," Roberts said, noting that many banking and personal finance apps give consumers access to their credit scores.
"A lot of lenders, PenFed included, are allowing for consumers to check their rate by way of soft pull … without any impact to their credit score or promises that I'm going to go through this process.
And I think that's why a lot of people are now seeing that refinance is a fruitful option for them, where it hadn't been like that in the past."
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Roberts said that PenFed is "proactively going after consumers where we can see that your rate is higher than what we have to offer in a pre-approval process.
As a credit union, we care about our members' financial health, so we really want them to save money when they can, where they can.
"It doesn't sound like a lot initially, but when you think about it over the life of the rest of the loan, it really does add up," she said, noting that inflation is squeezing household budgets for necessities like groceries and gas.
"That $100 can go a long way when it comes to monthly expenses."
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Improvements in the durability of vehicles have also made refinancing auto loans more viable because cars are able to hold more of their value and stay operational longer.
"Cars are staying on the road longer than they ever have.
Right now, the life of a car is about 13 years.
There's just been enhancements in technology and engines and things that are keeping them on the road," Roberts said.
She said affordability challenges with purchasing new cars are also contributing to consumers keeping their cars longer, so refinancing is "naturally coming into play as an option."
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Roberts outlined the steps a person considering refinancing an auto loan should consider before making any commitments.
"The very first thing that you should do is look at the value of your car," she said, noting that there are a range of free tools that allow consumers to check.
That process allows them to see if it makes sense financially to refinance a car "because if you owe more than the value, it becomes a harder conversation."
She said the second thing consumers should do is look at their pre-approval options to see if their options for interest rates are lower than what they are paying.
That will allow them to consider whether refinancing makes sense given their equity position in the vehicle.
Roberts added that consumers ought to consider whether a loan term extension would make sense for them in the refinancing process because it may allow them to save more on payments if it makes sense given the car's initial valuation.
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Some lenders, including PenFed, offer a cash-out refinancing option, which Roberts added can even take the form of a title loan for paid-off vehicles.
That can make sense for consumers who are looking at either a personal loan or using their credit card as an alternative to taking the equity out of the car, she said.
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93%flagged-word coverageStephanie Roberts
513 attributed words95% of attributed speech67% writer coverage
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