Cities With the Worst Original Interest Rates

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Borrowers in these 10 cities paid the highest rates in the U.S. before refinancing their auto loans.

For many, owning a car is a necessary part of life. Unfortunately, it’s not always possible to buy a vehicle at the most opportune time. A low or nonexistent credit score, lack of savings, or limited disposable income can all contribute to taking out a vehicle loan with a high interest rate.

According to our State of Auto Refinance: 2022 Report, the average pre-refinance interest rate in the U.S. was a whopping 14%. Borrowers in some cities fared significantly worse, emphasizing the importance and advantages of refinancing. After refinancing, borrowers were able to reduce their auto loan interest rate to an average of 7%.

Let’s review how auto loan refinancing works and when it makes sense to apply. Then, we’ll explore the top 10 cities with the worst original interest rates before ending with some good news — how much borrowers slashed their interest rates after refinancing.

2023 Auto Refinance Rates See Today's Rates

How Does Auto Loan Refinancing Work?

Refinancing an auto loan replaces the original loan with a new one. When you refinance, your new lender pays off your old loan in full, then begins billing you for the new loan. Typically, your new loan has better terms, such as a lower monthly payment or reduced interest rate.

Savings after refinancing can be significant, too. In 2021, borrowers who refinanced their auto loans saved an average of $1,158 annually, with 56% of borrowers saving $50 to $149 per month.

When Does It Make Sense to Refinance an Auto Loan?

Qualifying for a refinanced auto loan is similar to when you first applied for your original loan. During the application process, lenders and financial institutions consider your:

In general, it’s a good time to consider refinancing your car loan after you’ve improved your financial situation. Reducing your debt, earning more money, or simply paying down your loan balance can help you qualify for a refinanced car loan with a lower interest rate and more favorable loan terms.

Last year, borrowers refinanced their auto loans 16.7 months into their loan, on average. However, refinancing at any point during your loan can result in savings and, ultimately, more cash in your pocket.

Cities With the Worst Original Interest Rates

Borrowers in the following 10 U.S. cities had the worst original interest rates before refinancing their auto loans. Let’s look at which cities fared the worst and what interest rates looked like after refinancing.

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View from above looking out over the city of Glendale, AZ

10. Glendale, Arizona

  • Original interest rate: 16%
  • Refinance rate: 7.6%
  • Percent savings: 8.4%
  • Average credit score: 655

Fun fact: USA Today ranked Historic Downtown Glendale as one of the country’s ten best places for shopping thanks to its variety of boutiques, restaurants, and stores.

Overlooking the Arkansas River and bridge in Wichita, Kansas

9. Wichita, Kansas

  • Original interest rate: 16.1%
  • Refinance rate: 8%
  • Percent savings: 8.1%
  • Average credit score: 658

Fun fact: Both Pizza Hut and White Castle were founded in Wichita in 1958 and 1921, respectively.

Virginia Statehouse Richmond, Virginia

8. Richmond, Virginia

  • Original interest rate: 16.1%
  • Refinance rate: 7.1%
  • Percent savings: 9%
  • Average credit score: 677

Fun fact: Richmond was the capital of the Confederacy for most of the Civil War, eventually surrendering to the Union on April 9, 1865.

Aerial view of Marietta, Georgia

7. Marietta, Georgia

  • Original interest rate: 16.2%
  • Refinance rate: 7.5%
  • Percent savings: 8.7%
  • Average credit score: 667

Fun fact: Marietta sits 18 miles outside of Atlanta and is home to five National Register Historic Districts.

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A stunning shot of a wooden bridge over a lake with lush green and autumn colored trees reflecting off the lake at sunset at Rhodes Jordan Park at Lawrenceville Lake in Lawrenceville, Georgia

6. Lawrenceville, Georgia

  • Original interest rate: 16.2%
  • Refinance rate: 7.9%
  • Percent savings: 8.3%
  • Average credit score: 657

Fun fact: Lawrenceville is named after Captain James Lawrence, a naval commander, who in the War of 1812, gave the now-famous order to “Tell the men to fire faster and not to give up the ship; fight her till she sinks!”

Looking out over Mirror Lake toward downtown Lakeland, Florida

5. Lakeland, Florida

  • Original interest rate: 16.3%
  • Refinance rate: 7.5%
  • Percent savings: 8.8%
  • Average credit score: 653

Fun fact: Lakeland hosts the annual SUN ‘n FUN International Fly-In & Expo, Florida’s largest flight/fly-in convention and the second-largest event of its kind.

Aerial View of Downtown Mobile, Alabama skyline

4. Mobile, Alabama

  • Original interest rate: 16.7%
  • Refinance rate: 8.1%
  • Percent savings: 8.6%
  • Average credit score: 650

Fun fact: Mobile was the original location of Mardi Gras, which took place in 1703, almost 30 years before New Orleans began openly celebrating the holiday.

Skyline of downtown Birmingham, Alabama

3. Birmingham, Alabama

  • Original interest rate: 17.3%
  • Refinance rate: 7.8%
  • Percent savings: 9.5%
  • Average credit score: 653

Fun fact: Birmingham hosts the Sidewalk Film Festival, which USA Today considers one of the “ten great places for a fabulous film festival.”

What rate can I get? What rate can I get?

Washington Monument in Spring, Washington, D.C.

2. Washington, D.C.

  • Original interest rate: 17.3%
  • Refinance rate: 8.6%
  • Percent savings: 8.7%
  • Average credit score: 644

Fun fact: George Washington didn’t live in Washington, D.C. The first president who did was John Adams, who took office in 1797.

Skyline of Detroit, Michigan

1. Detroit, Michigan

  • Original interest rate: 18.2%
  • Refinance rate: 7.6%
  • Percent savings: 10.6%
  • Average credit score: 648

Fun fact: Since 1957, Detroit has been home to teams from all four major sports: the Pistons, Lions, Red Wings, and Tigers.

Refinancing Isn’t Just for City Dwellers

Your ability to refinance isn’t location-dependent. If you’ve improved your financial situation and creditworthiness since you first bought your vehicle — or simply wish to get out of a predatory auto loan — refinancing can potentially result in you paying less interest over your loan’s term, no matter where you call home.

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