The Top 10 Cities for Auto Refinance Savings

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by RateGenius

Borrowers lowered their auto loan payment by more than $100 a month in these cities in 2021.

The ease of convenience in the Digital Age means you can do practically anything online.

Like find a quote on how much you could save each month by refinancing your car loan.

But while the internet lets you apply to refinance from anywhere in the country, where you live will still impact the savings you receive.

Our recent 2022 State of Auto Refinance report dives into this, and breaks down the greatest auto refinance savings across the country.

Before we get into the list of 10 cities that saved the most by refinancing their auto loan in 2021, let’s talk more about what refinancing is.

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Why Should I Refinance My Auto Loan?

Put simply, refinancing is when a new lender agrees to purchase your existing auto loan from the original lender. You might be thinking, “OK, well that sounds like a hassle. Why would I want to refinance?”

Refinancing can be beneficial for two main reasons: lowering your monthly payments and securing a lower interest rate.

These two factors can make a big difference in your finances by freeing up more of your monthly cash flow through lower payments. You can put that extra money into savings, investments, paying off your car loan, or toward any other existing debt.

How Auto Loan Refinancing Works

Borrowers can save money by refinancing their auto loans to a lower interest rate, but there are several criteria you must meet to be eligible. For starters, you usually need to have a good credit score. However, even if your credit score is less than stellar, you could still qualify. Lenders look at several factors to decide if they’re going to offer you a loan, and with what terms and interest rate.

Lenders will also look at your debt-to-income (DTI) ratio, which is your monthly debt payments divided by your monthly gross income. Here’s how to calculate your DTI. Add up all your monthly debt payments, including mortgage, student loans, credit cards and auto loans. Then, divide that figure by your monthly gross income, which is your income before taxes. The resulting figure is your DTI.

There is no specific DTI cutoff to qualify for auto loan refinancing, but 90% of approved applicants had a DTI less than 48%.

The vehicle needs to have less than 120,000 miles and be less than 10 years old. The car’s loan-to-value (LTV) ratio is another important factor. The LTV is the current auto loan balance divided by the car’s current value. Most applicants have an LTV of 123% or less.

Believe it or not, another factor that’s considered when you apply to refinance your auto loan is where you live.

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Location, Location, Location

It’s hard to say exactly how much a borrower’s location affects auto refinance rates — or savings. Every lender sets their own rates and guidelines, and outside factors like a state’s economic health and local lending regulations also have an influence.

However, our data showed some interesting patterns when it came to the cities that saved the most. Interestingly enough, the top 10 cities for auto refinance savings in 2021 were all located in the same two U.S. states, California and Texas.

Top 10 Cities for Auto Refinance Savings

Here are the 10 cities in the country that saw the greatest savings in 2021, by refinancing their auto loan. The following data points are all averages from more than 300,000 refinanced auto loans in the RateGenius and AUTOPAY networks.

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

10. Victorville, California

  • Average monthly savings: $122
  • Average credit score: 655
  • Average interest rate before refinancing: 14.24%
  • Average interest rate after refinancing: 6.32%

Victorville, CA residents have the third-lowest interest rate after refinancing, even with the lowest credit score on this list (655). Car owners knocked off an average of $122 a month from their car payment.

Duck Creek Park in Garland Texas, with trees reflecting into the water

9. Garland, Texas 

  • Average monthly savings: $124
  • Average credit score: 680
  • Average interest rate before refinancing: 12.73%
  • Average interest rate after refinancing: 6.32%

At 680, car owners from Garland, Texas had the highest average credit score on this list. That is likely one of the reasons why their average interest rates dropped from 12.73% to 6.32% APR. They were able to save $124 a month on average.

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

8. Long Beach, California

  • Average monthly savings: $124
  • Average credit score: 663
  • Average interest rate before refinancing: 15.36%
  • Average interest rate after refinancing: 6.05%

Long Beach residents have the second-lowest average interest rate on this list at 6.05%. This low interest rate is probably why they were able to save an average of $124 a month. They also have one of the most significant spreads between their original interest rate and their refinance rate, from an average of 15.36% down to 6.05%.

Aerial view of little park in front of Otay Lake City Reservoir with blue sky and mountain in the background, Chula Vista, California

7. Chula Vista, California

  • Average monthly savings: $125
  • Average credit score: 662
  • Average interest rate before refinancing: 13.42%
  • Average interest rate after refinancing: 6.51%

The average Chula Vista resident lowered their interest rate by more than half when they refinanced, going from 13.42% to 6.51%. That impressive change is how they were able to slash an average of $125 off their monthly auto loan payment.

Frisco, Texas: The Dr. Pepper Ballpark

6. Frisco, Texas

  • Average monthly savings: $125
  • Average credit score: 674
  • Average interest rate before refinancing: 14.07%
  • Average interest rate after refinancing: 6.42%

Frisco auto loan holders have the third-highest average credit score on this list. That’s likely one of the reasons they were able to receive an average 6.42% interest rate after refinancing, down from an average of 14.07%.

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Brilliant pink and red sunset colors downtown Lubbock, Texas, overlooking the streets and buildings

5. Lubbock, Texas

  • Average monthly savings: $127
  • Average credit score: 655
  • Average interest rate before refinancing: 11.41%
  • Average interest rate after refinancing: 6.41%

Lubbock residents tied for the lowest credit score on this list (655), but they were still able to save $127 a month on average after refinancing. They also ended up with the fifth-lowest average interest rate after refinancing.

Midland is one of the best cities for auto refinance savings 2020 - 600 x 338

4. Midland, Texas

  • Average monthly savings: $128
  • Average credit score: 678
  • Average interest rate before refinancing: 15.28%
  • Average interest rate after refinancing: 7.84%

Residents of Midland have the highest average credit score on this list (678), though they still didn’t qualify for the lowest interest rate. However, they were able to slash the average interest nearly in half by refinancing, from 15.28% to 7.84%. This difference was enough to help them save an average of $128 on average each month.

Statue of Walt Disney and Mickey Mouse located in Anaheim, Disneyland, California

3. Anaheim, California

  • Average monthly savings: $128
  • Average credit score: 663
  • Average interest rate before refinancing: 13.5%
  • Average interest rate after refinancing: 6.39%

Anaheim residents had one of the worst credit scores on this list, but that didn’t stop them from qualifying for an average 6.39% interest rate after refinancing. They were able to save $128 a month on average.

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

2. Odessa, Texas

  • Average monthly savings: $132
  • Average credit score: 669
  • Average interest rate before refinancing: 13.21%
  • Average interest rate after refinancing: 6.69%

Even though Odessa car owners saved the second-most on their monthly auto loan bills ($132), their average interest rate after refinancing (6.69%) is the second-highest APR on this list.

lancaster ca - right yellow blooms fill the desert floor in the Lancaster area, California

1. Lancaster, California

  • Average monthly savings: $138
  • Average credit score: 666
  • Average interest rate before refinancing: 15.43%
  • Average interest rate after refinancing: 5.94%

Lancaster had the highest average original loan rate at 15.43%, and saw the largest difference with the new lowest average refinance rate (5.94%). That interest rate difference is why Lancaster residents had the highest monthly savings on this list at $138.

Refinancing Means Savings, Regardless of Where You Live

No matter where you live, refinancing your auto loan can result in huge monthly savings. Go online to see if you can qualify for a lower interest rate; you might be surprised at what you find. To see how much you can save, use the RateGenius loan calculator.

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About The Author


RateGenius

A better way to refinance your auto loan. RateGenius works with 150+ lenders nationwide to help you save money on your car payments. Since 1999, we've helped customers find the most competitive interest rate to refinance their loans on cars, trucks, and SUVs. www.rategenius.com


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