Cities With the Best (and Worst) Refinance Interest Rates

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Where you live affects interest rates when refinancing your auto loan.

When it comes to refinancing an auto loan, there are a number of potential benefits to keep in mind: reduced monthly payments, a shorter repayment term, and a lower interest rate that can save you money. The rates you’re offered when refinancing will depend on your personal financial factors, but they will also be influenced by your location.

We compiled a recent study, the State of Auto Refinance: 2021 Report, that helps borrowers see how much money they can potentially save by refinancing, and see what’s typical for their area so they can shop confidently. Here’s a look at what it means to refinance an auto loan.

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Refinancing an Auto Loan: What You Need to Know

There are a few reasons why you might want to change the auto loan you initially bought your car with, which may lead you to consider a refinance.

Your credit score may improve over time, which qualifies you for better terms than when you initially took out your loan. You may also decide that your monthly payment doesn’t work for your budget anymore, or interest rates may have dropped overall giving you the opportunity to save money on your loan.

No matter your reason, auto loan refinancing can be the answer.

When refinancing, you’re able to replace your original loan with a new loan that works better for you and your situation. In many cases, the refinanced loan comes with a more competitive interest rate which lowers your monthly payment, reduces your overall loan cost, or both.

Just how competitive the interest rate is will depend on a few different factors.

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Factors that Impact Interest Rates

Average income level and credit score of borrowers in each state play a role in the interest rates offered. If a state has a high number of creditworthy borrowers, rates may drop overall for lenders to stay competitive. Conversely, a state where borrowers have lower average credit scores and/or income levels could see higher rates, on average.

But individual factors play the largest role in determining the interest rates you’ll be offered. Things such as:

  • Your credit score
  • The length of the loan’s term
  • The year and mileage of your vehicle
  • The vehicle’s LTV (loan-to-value) ratio
  • The track record of your previous payments

The better your credit history and loan terms, the lower the interest rates you’ll be offered when refinancing your auto loan. By lowering your interest rate, you can save money both now and in the long-term.

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Cities With the Worst Auto Loan Interest Rates

Here are the ten cities that ranked worst in our study for initial auto loan interest rates. Meaning, these cities had the highest average rates offered to borrowers when applying to refinance, prior to getting approved for a new auto loan.

10. Las Vegas, Nevada

Arial view of Las Vegas | Cities with the best and worst interest rates

  • The city with the tenth-highest auto loan interest rate at the time of application was Las Vegas, Nevada at 11.7%.
  • Sin City drivers saved an average of $1,188 per year after refinancing (compared to the state average of $1,154 annually) and had an average credit score of 717.
  • Overall, Nevada saw the second-highest interest rate reduction from refinancing (6.2%).

9. Memphis, Tennessee

Signs on Beale St. in Memphis, Tennessee | Cities with the Best and Worst Interest Rates

  • At the time of refinance application, drivers in Graceland’s home city had an average auto loan rate of 11.8%, making Memphis the city with the ninth-worst interest rates.
  • Overall, Tennessee drivers had an average credit score of 720, reduced their auto loan rate by 5.9%, and saved $1,009 annually.

8. Odessa, Texas

Windmill in the desert in Odessa, TX | Cities with the Best and Worst Interest Rates

  • This booming West Texas oil town ranked eighth when it came to the worst auto loan interest rates, at 11.9%.
  • While Odessa drivers also had the highest auto loan balances ($31,274), they saw the highest annual savings after refinancing: $1,759, or about 41% more than in 2019.
  • Unfortunately, applicants also earned the fourth-worst average credit score at 704.

7. Cleveland, Ohio

Scenic bridge in Cleveland, Ohio | Cities With the Best and Worst Interest Rates

  • Coming in as the seventh-worst city is Cleveland, with an average original loan rate of 11.9%.
  • This city — considered the birthplace of both x-ray machines and Superman — saw a -15% change in refinance savings from 2019 to 2020.
  • However, Cleveland did snag the title for tenth-highest average interest rate decrease at 6.37%.

6. Kissimmee, Florida

Lighthouse at sunset in Kissimmee, Florida | Cities With the Best and Worst Interest Rates

  • With a 12.0% average original loan rate, Disney’s neighboring city — Kissimmee, Florida — is the six-worst.
  • Luckily, this city is also the sixth-best when it comes to the highest interest rate reduction (6.63% on average) and boasts the top spot for year-over-year refinance savings (54% more in 2020 than in 2019).
  • It also had the eighth-lowest credit score among applicants at just 708.

5. Bakersfield, California

Farmland in Bakersfield, California | Cities with the Best and Worst Interest Rates

  • The fifth-highest average interest rate belongs to Bakersfield, California, with a whopping 12.0% on original auto loans.
  • Thankfully, this city snags the #5 spot for the highest average rate deduction at 6.67%, but it also had the seventh-worst average credit score at 706.

4. Sacramento, California

Flowers in bloon near the bridge in Sacramento, California | Cities With the Best and Worst Interest Rates

  • California’s capital city, Sacramento, earns the number four spot with a 12.2% average original loan interest rate.
  • It also earns the third-highest average rate reduction (at 6.86%) and saves drivers an average of $1,180 per year after refinancing.
  • Drivers had the sixth-lowest credit score on average at 706.

3.  Killeen, Texas

View of Stillhouse Hollow Lake in Killeen, Texas | Cities With the Best and Worst Interest Rates

  • The bad news is that Killeen, Texas — home to Fort Hood, the largest active duty armored post in the U.S. Armed Forces — had the third-highest original auto loan interest rate at 12.5%.
  • The good news is that this city also earned the top spot in terms of the highest interest rate reduction in the country, with drivers saving an average of 7.05%.
  • Overall, Texas drivers saved $1,126 annually on average, though they had the second-worst average credit score at just 697.

2. Cincinnati, Ohio

Historic brick houses in Cincinnati, Ohio | Cities With the Best and Worst Interest Rates

  • While Cincinnati’s 12.5% average earns it the second-highest original interest rate in the country, the Queen City also has the ninth-highest average savings after refinancing: $1,158.
  • The city saw an 18% increase in refinance loan savings from 2019 to 2020, and drivers dropped an average of 6.79% on their new loans’ interest rates.

1. Baltimore, Maryland

Reflection of the Washington Monument in Baltimore, Maryland | Cities With the Best and Worst Interest Rates

  • Maryland’s largest city and the birthplace of our national anthem, Baltimore, also holds another (not-so-great) accolade: the highest original auto loan rates in the country, prior to refinancing.
  • In Baltimore, drivers had an average auto loan interest rate of 12.6% at the time of application, though they were able to drop this by an average of 6.96% (the second-highest decrease in the country).
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Cities With the Best Auto Loan Interest Rates

Now for the good news: Drivers in many cities saved themselves a lot of money by refinancing their auto loans. Here are the 10 cities that snagged the best auto loan rates after refinancing.

10. Miami, Florida

Family biking between palm trees in Miami, Florida | Cities With the Best and Worst Interest Rates

  • Drivers in Miami, Florida were able to lock in an average interest rate of 4.6% after refinancing.
  • This represents a 23% increase in average savings from 2019 to 2020.
  • Overall in the state of Florida, drivers saved an average of $548 per year by refinancing.

9. Katy, Texas

Arial view of toll road exchange in Katy, Texas | Cities With the Best and Worst Interest Rates

  • Sitting just outside of Houston, the small town of Katy, Texas ranks ninth-place for the best refinancing auto rates.
  • Katy’s average rate was just 4.6%, compared to the overall Texas average of 5.2%.
  • In a state with an average loan balance of $24,231, Texas drivers saved an average of $1,126 annually.

8. Fort Lauderdale, Florida

Lifeguard stand on the beach in Fort Lauderdale, Florida | Cities With the Best and Worst Interest Rates

  • The city with the eighth-lowest refinance loan rate was Fort Lauderdale, Florida at just 4.6%.
  • This beachfront city boosted its average refinance loan savings by 33% from 2019 to 2020, while drivers throughout the state saved an average of $948 annually.

7. Denver, Colorado

Denve, Colorado skyline with mountains in the distance | Cities With the Best and Worst Interest Rates

  • The Mile-High City is Colorado’s capital and enjoys 300 days of sunshine a year.
  • It also has the seventh-best auto loan refinance rate at just 4.6% on average.
  • Denver had the fourth-highest average credit score at 733.

6. Bethlehem, Pennsylvania

Colorful Autumn leaves in Bethlehem, Pennsylvania | Cities With the Best and Worst Interest Rates

  • Owners in this Lehigh Valley city snagged the sixth-best average refinance rate (4.6%) and had the third-highest average credit score at 733.
  • Pennsylvania drivers as a whole saved an average of $862 per year by refinancing.

5. Scottsdale, Arizona

Cactus and mountains in the Senora Desert near Scottsdale, Arizona | Cities With the Best and Worst Interest Rates

  • Known as “the West’s most western town,” Scottsdale, Arizona, has another accolade: the fifth-best auto loan refinance rates.
  • Drivers in this city scored an average rate of 4.5% after refinancing, and also had the seventh-highest average credit score at 732.

4. Long Beach, California

Arial view of Rainbow Harbor in Long Beach, California | Cities With the Best and Worst Interest Rates

  • One of California’s most popular waterfront towns, Long Beach, boasts the fourth-best auto loan refinancing rates.
  • Drivers locked in an average rate of 4.4% while also holding the ninth-highest average credit score among applicants at 731.

3. Littleton, Colorado

Red rocks in Roxbourogh State Park in Littleton, Colorado | Cities With the Best and Worst Interest Rates

  • A small suburb of Denver, Littleton, is home to drivers with the third-best refinance rates in the country (an average of 4.3%).
  • Drivers in this city also had the eighth-highest average credit score (731), which was a few points higher than the state average of 729.

2. Gilbert, Arizona

Sunset over Discovery Park in Gilbert, Arizona | Cities With the Best and Worst Interest Rates

  • Arizona drivers saved an average of $976 annually last year after refinancing their vehicles.
  • In the town of Gilbert, however, drivers also managed to get the second-best average interest rate of 4.2% on those refinance loans.

1. Philadelphia, Pennsylvania

Independence Hall in Philadelphia, Pennsylvania | Cities With the Best and Worst Interest Rates

  • The best refinancing interest rates (on average) are held by drivers in Philadelphia, Pennsylvania.
  • The average refinance rate was 3.95%, with drivers in the state saving an average of $862.
  • State-wide, the average credit score among applicants was 730.
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Final Thoughts

Auto loan refinancing can be a great way to reduce your interest rate and overall loan cost. While the rates offered will depend on the individual applicant, their credit history, and even their specific vehicle, location does often play a factor in the equation.

If you’re looking for the best possible interest rate on your auto loan refinance, let RateGenius help you shop.

About The Author


Stephanie Colestock

Stephanie Colestock is a DC-based personal finance writer with an expert focus on credit and lending. With over ten years of industry experience, she is a regular contributor on sites such as Credit Karma, The Balance, Quicken Loans, Dough Roller, Finance Buzz, and more. She enjoys teaching people how to optimize their finances and save themselves money in the process.


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