The Top 10 States for Auto Refinance Savings

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2020 wasn’t all bad. Borrowers in these states saved over $1,000 a year after refinancing their car loans.

It’s unanimously understood that 2020 was a weird year. The pressures of a global pandemic put a beating on our economy and strained our finances. Naturally, this prompted many to look for ways of reducing their expenses as incomes fluctuated and stagnated.

The RateGenius State of Auto Refinance report found that refinancing auto loans proved to be a popular solution for saving money. 46 states saw an increase in refinance applications in 2020, with 16% more Americans applying to refinance a car loan in 2020 compared to 2019.

The savings weren’t insignificant, either. Successful applicants across the U.S. saved an average of $989.72 per year by refinancing an auto loan, the largest amount of savings since 2016. In fact, 42% of successful applicants saved an annual $1,000 or higher after refinancing.

Before we dive into the top 10 states that saw the most savings after refinancing an auto loan, it’s important to understand the benefits of auto refinance and how to qualify for refinancing.

2021 Auto Refinance Rates See Today's Rates

When Should You Refinance a Car Loan?

During an auto loan refinance, your new lender pays off the original loan in full before replacing it with a new loan — one with a lower interest rate and better payment terms.

One of the ideal times to consider an auto loan refinance is after you’ve improved your credit score. It’s also worth considering a refinance if the Federal Reserve reduces its interest rate — as it did in 2020 — which impacts the interest rate for car loans.

How to Qualify for Auto Loan Refinancing

Qualifying for a refinanced car loan is similar to taking out your original auto loan. You should begin by shopping around and comparing offers from different lenders, who take into account your:

  • Credit report and credit score: In 2020, the average credit score of a refinance applicant was 657.
  • Location: where you live
  • Existing loan balance: how much you still owe on your current loan
  • Vehicle age and use: how old your car is, its mileage, condition, and what you use it for
  • Loan-to-value ratio: a percentage comparing the value of your car against the remaining loan balance, also known as LTV
  • Debt-to-income ratio: a comparison that totals your monthly debt payments vs. gross monthly income reflected as a percentage, also known as DTI
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Generally, if you made improvements to your overall finances, income, and paid down some outstanding debt since you first took out an auto loan, chances are high that you’d qualify for an auto loan refinance. In fact, 17% more applicants successfully refinanced a car loan in 2020 compared to the previous year.

Despite the many valid worries of 2020, Americans in 10 U.S. states managed to reduce their auto loan payments and interest rates by refinancing, keeping a few extra bucks in their pockets (or reinvested in a surplus of toilet paper).

10. Mississippi

Mississippi River Bridge with red poppies along bank | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $90.57 monthly, $1086.86 annually
  • Average rate reduction: 6.1%
  • Average credit score: 720
  • Most refinanced vehicle: Ford F-150 (5.8% of all refinances)
  • Fun fact: Mississippi is one of only eight states in which borrowers lowered their interest rates by 6% or more.

9. Louisiana

New Orleans Fresh Quarter Building with horse carriage | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $90.62 monthly, $1087.43 annually
  • Average rate reduction: 5.5%
  • Average credit score: 727
  • Most refinanced vehicle: Chevrolet Silverado (7.2% of all refinances)
  • Fun fact: Borrowers in Louisiana had an average loan balance of $24,693 before refinancing, the second-highest in the country.

8. California

Bixby Creek Bridge Big Sur California on the PCH | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $93.02 monthly, $1,116.24 annually
  • Average rate reduction: 5.8%
  • Average credit score: 715
  • Most refinanced vehicle: Honda Civic (4.3% of all refinances)

7. Texas

Texas Rio Grande River in West Texas Desert | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $93.84 monthly, $1,126.14 annually
  • Average rate reduction: 5.2%
  • Average credit score: 715
  • Most refinanced vehicle: Chevrolet Silverado (6.4% of all refinances)
  • Fun fact: When applying for a refinance, Texas applicants had one of the lowest credit scores in the country (651).

6. Utah

Utah Arches National Park | Top States for Auto Refinance Savings

  • Average auto refinance savings: $93.86 monthly, $1,126.28 annually
  • Average rate reduction: 6.1%
  • Average credit score: 722
  • Most refinanced vehicle: Toyota RAV4 (6.2% of all refinances)
  • Fun fact: Utahns had the third-highest original interest rate before refinancing, at 11.4%, tying with Hawaii.
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5. Nevada

Lake Tahoe San Harbor Shore in Nevada | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $96.16 monthly, $1,153.87 annually
  • Average rate reduction: 6.2%
  • Average credit score: 717
  • Most refinanced vehicle: Dodge Ram 1500 (3.9% of all refinances)
  • Fun fact: Borrowers in Nevada had an average interest rate of 12.0% before applying for an auto loan refinance.

4. New Mexico

White Sands National Park New Mexico | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $101.29 monthly, $1,215.47 annually
  • Average rate reduction: 5.9%
  • Average credit score: 713
  • Most refinanced vehicle: Dodge Ram 1500 (9.7% of all refinances)
  • Fun fact: The average loan amount for New Mexico borrowers after refinancing a loan was $25,011.

3. Montana

Snow Capped Mountains in Montana | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $108.85 monthly, $1,306.23 annually
  • Average rate reduction: 5.6%
  • Average credit score: 738
  • Most refinanced vehicle: Jeep Grand Cherokee (7.8% of all refinances)
  • Fun fact: Borrowers in Montana had one of the lowest average interest rates nationwide after refinancing an auto loan: 4.7%.

2. Hawaii

Island Volcano in Hawaii | Top 10 States for Auto Refinance Savings

  • Average auto refinance savings: $111.50 monthly, $1,337.94 annually
  • Average rate reduction: 7.1%
  • Average credit score: 731
  • Most refinanced vehicle: Toyota Tacoma (11.9% of all refinances)
  • Fun fact: Hawaii borrowers enjoyed the highest rate reduction of any of the 50 states, saving 0.9% more than the second-highest state of Nevada.

1. North Dakota

North Dakota Badlands National Park | Top States for Auto Refinance Savings

  • Average auto refinance savings: $113.21 monthly, $1,358.47 annually
  • Average rate reduction: 5.5%
  • Average credit score: 713
  • Most refinanced vehicle: Jeep Grand Cherokee (7.4% of all refinances)
  • Fun fact: North Dakota had a 53% increase in auto loan refinance applicants in 2020 compared to 2019.

Table Summary: Top 10 States for Auto Refinance Savings

The table below lists the complete information for the top 10 states for auto refinance savings in 2020, according to the RateGenius State of Auto Refinance report.

It’s Never a Bad Time to Consider an Auto Loan Refinance

You don’t need to move to one of the top 10 states for auto refinance savings to refinance your car loan. Those who refinanced in 2020 reduced their interest rate by an average of 5.5% nationwide, reducing the average interest rate of existing loans from 10.5% to 5%.

No matter where you live, refinancing an auto loan often leads to savings that keep more of your money in your pocket.

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About The Author


Daniel Mattia

Daniel Mattia is a freelance content writer and author. He's written extensively about insurance, personal finance, and small business. Daniel's past and current clients include The Zebra, Bestow, Ensurem, and others across a variety of industries.


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