States With the Best and Worst Interest Rates

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A look at the best and worst states for interest rates on auto loans, so you can save the most money.

Many drivers today use auto loans to finance a  purchase of a new or used vehicle. These loans typically range from 12 to 84 months in length, but you don’t have to be stuck with that same loan forever.

Refinancing your car loan can be a great way to potentially lower your interest rate, which in turn saves you money. It can also allow you to reduce your monthly payments, pay off debt sooner, release a co-borrower from the debt, or all of the above.

One of the most important factors of an auto loan (and subsequent refinance) is the interest rate. These tend to fluctuate from one area to the next, with some states boasting significantly lower rates than others. This means that drivers in some states will automatically pay more (or less) on average than drivers in other states, even before personal factors are accounted for.

So, which states offer the best and worst interest rates on auto loan refinancing? We analyzed more than 300,000 funded auto loans in our State of Auto Refinance: 2022 Report to find out, and want to share what we learned.

But first, let’s review the basics.

2022 Auto Refinance Rates See Today's Rates

How Auto Loan Refinancing Works

Refinancing an auto loan, is quite simple: you take out a new auto loan to pay off, and ultimately replace, your current one. You’ll have a brand new loan agreement at the end of your refi, complete with its own interest rate, loan term, and monthly payment amount.

Refinancing can be done through the same lender or a new lender, depending on the terms offered to you. Shopping around for a new lender — especially through a platform like RateGenius — can be a great way to find the best possible interest rates, discounts, and loan terms.

As with your original auto loan, qualifying for a refinance relies on some important personal factors. The specifics of these will vary from one lender to the next, but typically include your:

What Interest Rates Can I Expect?

The interest rate on your auto loan will determine how much your principal loan (the amount you actually borrowed) costs you in the end. It also impacts your monthly payment amount, so lowering your interest rate can mean savings today and over the life of your loan.

Each of those individual factors mentioned above will affect the interest rate you’re offered. So will the new auto loan term you choose (how long you’ll have to repay the balance), the type of car you have, and even its age or mileage.

And, of course, where you live will impact rates, including the average in your area and what you can expect to be offered.

States With the Best Interest Rates After Refinancing

These 10 states were the best in terms of offering the lowest interest rates on auto loan refinancing. Borrowers in these states might be able to save a decent amount of money by refinancing their car loans. All figures below are averages.

Aerial view of Washington state

10. Washington (tied)

  • Starbucks was founded in Washington state, which is also home to the oldest operating gas station in the U.S.
  • New Interest Rate: 6.4%
  • Average Annual Savings: $1,176
  • Average Credit Score: 673

Rocky bay with a lighthouse in the distance in Connecticut | States with the best and worst credit scores

10. Connecticut (tied)

  • This small state only has 21 cities within its eight counties, but it’s rightfully known as the Insurance State, where the concept of the modern insurance policy was first introduced.
  • New Interest Rate: 6.4%
  • Average Annual Savings: $888
  • Average Credit Score: 676

Kayak on a river of a Minnesota national park

9. Minnesota

  • Nicknamed the Land of 10,000 Lakes, Minnesota actually has nearly 12,000 to its claim.
  • New Interest Rate: 6.3%
  • Average Annual Savings: $960
  • Average Credit Score: 675

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Beaver Pond, White Mountains, New Hampshire

8. New Hampshire

  • The first colony to declare independence from Great Britain, this state is known for mining granite, sand, gravel, and precious stones.
  • New Interest Rate: 6.3%
  • Average Annual Savings: $1,032
  • Average Credit Score: 671

Victorville, California, grassy plains ith palm trees in the foreground and mountains in the background

7. California

  • With 1,100 miles of coastline, and everything from redwood forests to deserts, California offers a bit of everything — including producing more than 90% of our country’s broccoli!
  • New Interest Rate: 6.3%
  • Average Annual Savings: $1,272
  • Average Credit Score: 667

Burlington, Vermont waterfront

6. Vermont

  • The home of maple syrup, this state gets its name from two French words: vert and mont.
  • New Interest Rate: 6.2%
  • Average Annual Savings: $888
  • Average Credit Score: 706

Aerial view of Omaha Nebraska

5. Nebraska

  • Nebraska was the first state to complete their share of the country’s mainline interstate system in 1964 — the perfect open road for all of those newly-refinanced vehicles.
  • New Interest Rate: 6.0%
  • Average Annual Savings: $792
  • Average Credit Score: 688

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skyline of a downtown area of a city in Pennsylvania

4. Pennsylvania

  • The first baseball stadium, first computer, first newspaper, and first piano all came out of Pennsylvania, in addition to (of course) the Declaration of Independence.
  • New Interest Rate: 6.0%
  • Average Annual Savings: $996
  • Average Credit Score: 692

Boston, Massachusetts skyline

3. Massachusetts

  • This state boasts the U.S. landmark with the longest name: Lake Char­gogg­a­gogg­man­chaugg­a­gogg­chau­bun­a­gung­a­maugg (also known as Lake Webster). It also holds the title for most at-fault car accidents in the country.
  • New Interest Rate: 6.0%
  • Average Annual Savings: $1,020
  • Average Credit Score: 674

Rhode Island

2. Rhode Island

  • It may be the smallest state in the U.S., but Rhode Island is the second-most densely populated (only behind New Jersey).
  • New Interest Rate: 6.0%
  • Average Annual Savings: $1,104
  • Average Credit Score: 683

Fishing boats docked in a harbor off the coast of Maine | States with the best and worst credit scores

1. Maine

  • With more miles of coastline than California, this northeastern state — the only state with just one syllable — is believed to have been discovered by Vikings over 1,000 years ago.
  • New Interest Rate: 5.9%
  • Average Annual Savings: $948
  • Average Credit Score: 685

States With the Worst Original Interest Rates (Before Refinancing)

The next ten states rank the worst when it comes to high interest rates on original auto loans. By refinancing these more expensive loans, borrowers in each of these states saved an average of more than $1,000 per year. All figures below are averages.

Aerial View of Downtown Mobile, Alabama skyline

10.  Alabama (tied)

  • About 70% of this state is covered in forests, making it a big timber producer (in addition to steel pipes). The capital, Montgomery, was the home of many civil rights protests, including Rosa Parks’ infamous bus incident.
  • New Interest Rate: 7.4%
  • Average Annual Savings: $1,188
  • Average Credit Score: 654

Great Smokey Mountains entrance in Tennessee

10.  Tennessee (tied)

  • Graceland (Elvis Presley’s home in Memphis) is the second-most visited home in the U.S. — second only to the White House. This state is also known for its 10,000+ caverns.
  • New Interest Rate: 7.4%
  • Average Annual Savings: $1,128
  • Average Credit Score: 672

aerial view of Virginia

9.  Virginia

  • Virginia is home to the largest naval base in the U.S. as well as the oldest continuous law-making body (the Virginia General Assembly) in the modern world.
  • New Interest Rate: 7.4%
  • Average Annual Savings: $1,092
  • Average Credit Score: 670

Sunset over sailboats in Leland, Michigan

8.  Michigan

  • This state is home to the only floating post office, and its historic Soo Locks see more tonnage pass through than both the Suez and Panama canals… combined! Michigan also sees fewer car accidents annually than any other state.
  • New Interest Rate: 7.4%
  • Average Annual Savings: $1,032
  • Average Credit Score: 664

skyline of Tulsa, Oklahoma

7.  Oklahoma

  • Oklahoma is the only state that produces iodine,  and sees an average of 54 tornadoes per year.
  • New Interest Rate: 7.5%
  • Average Annual Savings: $1,164
  • Average Credit Score: 661

Bison standing in a field in the foreground of the Grand Teton Mountain range of Wyoming | Top 10 States for Auto Refinance Savings

6.  Wyoming

  • Boasting the country’s first national forest (Shoshone), Wyoming was also the first state to allow women to vote, serve on juries, and hold public office — earning it the moniker the Equality State.
  • New Interest Rate: 7.7%
  • Average Annual Savings: $1,272
  • Average Credit Score: 671

Desert sunset over Shiprock, New Mexico | Top 10 States for Auto Refinance Savings

5.  New Mexico

  • The world’s largest gypsum sand dunes are located in New Mexico, and this state also produces the most perlite in the country.
  • New Interest Rate: 7.7%
  • Average Annual Savings: $1,236
  • Average Credit Score: 657

Shrimp boats in a harbor in Biloxi, Mississippi | States with the best and worst credit scores

4.  Mississippi

  • This state is the birthplace of blues music, root beer, and is where the name “teddy bear” originated.
  • New Interest Rate: 7.8%
  • Average Annual Savings: $1,152
  • Average Credit Score: 651

The Gateway Arch in St. Louis, Missouri with the skyline in the background

3.  Missouri

  • The St. Louis arch is the tallest manmade monument in the country, standing at over twice the height of the Statue of Liberty. This state is also the U.S.’s top producer of lead and lime.
  • New Interest Rate: 7.8%
  • Average Annual Savings: $1,056
  • Average Credit Score: 665
What rate can I get? What rate can I get?

Utah Arches National Park | Top States for Auto Refinance Savings

2.  Utah

  • Utah has the highest literacy rate of any state in the U.S. — which may explain the clever name of its center-most city, Levan, which is “navel” (or belly button) spelled backwards.
  • New Interest Rate: 8.0%
  • Average Annual Savings: $1,152
  • Average Credit Score: 663

Washington Monument

1.  District of Columbia (DC)

  • The city’s namesake, George Washington, never actually lived in DC, but more than 15% of the people who do live there speak a language other than english.
  • New Interest Rate: 8.6%
  • Average Annual Savings: $816
  • Average Credit Score: 645

Whether you live in one of the areas with the best auto loan rates or reside in one of the worst refi rate cities, you can still save money by refinancing your car loan. If market rates have dropped, for instance, or your credit score has improved since you purchased your car. In just a few minutes, you can see how much a refinance can save you annually, and be well on your way to a better auto loan.

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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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