Top 10 States for Auto Refinance Savings

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Borrowers in these states saved more than $1,200 a year after refinancing their auto loan.

2021 was a record-setting year for auto refinance savings. The COVID-19 pandemic continued its negative impact on the economy last year. As a result, historically low interest rates remained in place. Average U.S. auto loan rates fell, allowing some borrowers to refinance their car loans and save over $1,000 per year.

For instance, according to the RateGenius State of Auto Refinance Report, borrowers nationwide saved an average of $1,158 per year after refinancing — an increase of 16% compared to 2020. And the average interest rate reduction was 7% — the highest difference since 2013.

Average auto refinance savings varied from state to state. We analyzed last year’s lending data to create a top-10 list of states with the highest average savings.

Before we jump into the list, let’s take a quick look at what auto refinancing is and how to qualify.

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What Is Auto Loan Refinancing?

When you refinance your car loan, you take out a new loan — with your current lender or a new lender — to replace your existing loan. While reasons for refinancing vary, it’s often done to secure a lower interest rate or better repayment terms. Simply put, a lower rate helps you save money.

Refinancing can be beneficial if your credit score has improved or interest rates have dropped since taking out an auto loan. In those scenarios, you’ll likely have a better chance of qualifying for a lower rate.

How To Qualify for Auto Loan Refinancing

Since rates vary by lender, make sure you shop around to get the best deal. When you submit your refinance application, a lender will often consider these factors, among others, to determine whether you qualify for refinancing:

  • Your credit score: While you don’t necessarily need a good credit score to qualify for refinancing, it can boost your chances of securing a lower rate
  • Debt-to-income ratio: Your DTI ratio measures how much your monthly debt burden is in comparison to your gross monthly income
  • Loan-to-value ratio: LTV compares your outstanding loan balance against your car’s value, expressed as a percentage
  • Vehicle year and mileage: The age of your vehicle and how many miles you’ve driven

While improving your finances could lead to a lower interest rate, keep in mind that regional factors, like the health of your state’s economy, competition, and local lending laws, can impact the rate you receive.

Now that we’ve covered the potential benefits of auto loan refinancing, let’s dive into the list of top 10 states for auto refinance savings.

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10. Delaware

Autumn leaves line a rocky creek in Delaware on a sunny day | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $100 monthly, $1,200 annually
  • Average rate reduction: 8.2%
  • Average credit score: 662
  • Fun fact: Delawareans had the one of the highest average rate deductions after refinancing, in the nation.

9. Maryland

Icy water flowing over the Great Falls of the Potomac River in Maryland during winter | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $102 monthly, $1,224 annually
  • Average rate reduction: 6.7%
  • Average credit score: 672
  • Fun fact: Marylanders average loan-to-value ratio was on the higher end (LTV of 94%), but qualifying borrowers still reduced their interest rate by an average of 6.7%.

8. New Mexico

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

  • Average auto refinance savings: $103 monthly, $1,236 annually
  • Average rate reduction: 8.1%
  • Average credit score: 657
  • Fun fact: New Mexicans had the highest existing interest rate before refinancing at 15.8%.

7. Texas

Texas landscape with cactus and agave in West Texas | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $105 monthly, $1,260 annually
  • Average rate reduction: 6.3%
  • Average credit score: 667
  • Fun fact: Borrowers in Texas had an average interest rate of 13.3% before refinancing their loans.

6. Wyoming

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

  • Average auto refinance savings: $106 monthly, $1,272 annually
  • Average rate reduction: 6.7%
  • Average credit score: 671
  • Fun fact: Despite the highest average debt-to-income ratio in the country, Wyomingites cut their average interest rates nearly in half (from 14.4% to 7.7%) after refinancing.
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5. California

View of Half Dome above a still lake in Yosemite National Park | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $106 monthly, $1272 annually
  • Average rate reduction: 7.8%
  • Average credit score: 667
  • Fun fact: Californians had the lowest rate after refinancing out of the top ten states at 6.3%.

4. Louisiana

Sunrise over Spanish moss and Cypress trees on Lake Martin in Louisiana | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $107 monthly, $1,284
  • Average rate reduction: 7.3%
  • Average credit score: 672
  • Fun fact: Louisiana tied with Maryland for highest average credit score — 672.

3. Nevada

Scenic drive through Valley of Fire State Park in Nevada| Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $111 monthly, $1,332 annually
  • Average rate reduction: 8.1%
  • Average credit score: 663
  • Fun fact: Nevadians had the second highest average rate before refinancing at 15.1%.

2. Alaska

Two moose swim in a lake at the foot of snow covered mountains in Alaska | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $119 monthly, $1,428 annually
  • Average rate reduction: 7.6%
  • Average credit score: 656
  • Fun fact: Despite Alaskans having the lowest average credit score (656) of all ten states, it ranks second in average auto refinance savings.

1. Hawaii

View of the jagged mountains and Na Pali coast in Hawaii | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $123 monthly, $1,476 annually
  • Average rate reduction: 8.1%
  • Average credit score: 668
  • Fun fact: Hawaiians had the second highest average rate deduction; tied with New Mexico.
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You Don’t Have To Move Across State Lines To Save

If you don’t live in one of the states listed above, don’t feel left out. There’s no need to pack your bags and relocate. You can save money refinancing wherever you live. Remember, borrowers across the U.S. who refinanced their auto loans last year reduced their interest rate by 7%. And the average annual savings was $1,158.

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About The Author


Jerry Brown

Jerry Brown is a personal finance writer based in Baton Rouge, LA. He's been writing about personal finance for three years and enjoys covering credit cards, personal loans, and mortgages. Jerry was nominated for a Plutus award for best social media for personal finance in 2020.


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