Getting money back when refinancing, also known as cash back auto refinancing, is only possible if there’s equity in your vehicle.

Checking for Equity

Can You Get Money Back if You Refinance Your Car?Determining whether or not you have equity in your vehicle is simple. All you need to calculate equity on your own is your current loan balance and the actual cash value (ACV) of the car. If you don’t receive a monthly statement for your loan, you’ll need to contact your lender in order to get the 10-day payoff amount. It’s also recommended that you ask your lender if there are any penalties for paying the loan off early. If so, add it to the payoff amount.

Once you have the payoff amount, you’ll need to figure out the vehicle’s ACV. There are two ways you can estimate this:

  1. Dealership appraisal – You can visit a dealership, where they’ll inspect your vehicle and give you its current market value based on their black book.
  2. Checking trusted websites – Sites like Kelley Blue Book and NADA give estimated market values. The tricky part is determining your vehicle’s condition, which can greatly affect its market value.

After both figures are determined, you just need to calculate the difference. For example if your loan payoff amount is $10,000 and your vehicle’s ACV is $12,000, you have about $2,000 in equity that you can get through cash back auto refinancing.

In order to get this money, you’ll need to apply with a new lender who's willing to do cash-out refinancing. Not all lenders will do this, so make sure you ask about it. The new lender will pay off your old lender and give you a check for the difference. When you do this, you end up keeping the equity.

If you find that you owe more than the car’s worth, this is negative equity – also called being underwater. You won’t be able to refinance when you’re underwater, so make sure you’re in the clear before you attempt to refinance.

Bottom Line

Refinancing is a great way to get a better interest rate on an auto loan. If you’re looking to get cash back when you refinance, you’ll need to make sure there’s equity in your vehicle and then find the right lender.

While we can’t help you refinance, if you're looking for a car loan, Auto Credit Express wants to help. We work with an extensive network of special finance dealers who can work with people who have bad credit, no credit, or credit issues like bankruptcy. Get started today by filling out our no-obligation, free auto loan request form online.