In order to refinance an auto loan, your car needs to meet the requirements set by the lender. The specifics vary by lender, but we can give you an idea of the typical vehicle requirements for refinancing an auto loan.
Car Requirements for Auto Refinancing
Not every car is eligible for refinancing. The reason why there are vehicle limitations is because subprime lenders want to finance cars that are dependable with less of a chance of breaking down during the loan term.
These lenders want to make sure that borrowers successfully complete a loan, and don’t want to lower the risk of the vehicle needing expensive repairs. After all, who wants to make payments on a car that isn’t running?
Each lender has their own requirements, but they generally follow these three vehicle requirements:
- Age limit – Lenders that deal with bad credit borrowers usually refinance cars that are no more than 10 years old. If you refinance through a major bank, they may cap the age at seven years.
- Mileage limit – Regardless of model year, lenders usually aren’t going to refinance vehicles with over 100,000 miles on the odometer.
- Type of car – Lenders aren’t going to refinance commercial vehicles, or any car without a clean title, so rebuilt or salvage titles won’t qualify.
Additional Refinancing Requirements
Not only does your vehicle need to qualify for refinancing, you need to as well. Additional refinancing requirements include:
- Having a good credit score, or one that's improved since you took out the original loan.
- Being current with your car payments.
- Having equity in your vehicle. Otherwise known as being upside down, having negative equity means you owe more on the loan than the vehicle's worth.
- A loan amount that falls within the lender's minimum and maximum guidelines.
The Bottom Line
Be sure to ask the lender about their car requirements for refinancing. What one lender offers is likely going to be different than the next, so the best way to find the right refinancing deal is to rate shop and get multiple quotes to compare.
Our trusted partner can help you find a refinancing deal, but if you’re simply looking to finance a vehicle and you have bad credit, Auto Credit Express can help with that too.
Our fast and free service matches consumers dealing with poor credit to local dealerships that are trained in special finance. If you have bad credit and need an auto loan, you're in the right place. Get the process started today by filling out our free and quick car loan request form.