Different kinds of customers taking car refinance

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The car loan lenders provide quotes for the rate.  Often times, the dealership will select the best rate (but not always), and then apply a markup to the interest rate.  In fact, many dealerships make most of their money by selling the rights to finance cars and marking up the loans rather than selling cars.

Excellent (“prime”) credit customers.

Good (“non-prime”) and poor (“sub-prime”) credit customers

Bankruptcy auto refinance customers.

Customers with newer vehicles with relatively low mileage.

Excellent (“prime”) credit customers.

Yes – this segment will qualify for an auto refinance, but may not benefit as much because they likely have a good rate already.  Compared to “non-prime” customers, “prime” customers will not realize savings, but still the case to refinance could be made. But if a prime customer (with FICO 690+) can lower their rate, given the unprecedented low interest rate environment that exists, then they should apply to see if they can get a better rate.  Plus, if the “prime” customer is interested in lowering the payment by extending their term, then this option should be quite doable. Plus, there isn’t much downside to trying to refinance, other than taking about 10 minutes to apply and a very slight hit to your credit report.

Good (“non-prime”) and poor (“sub-prime”) credit customers
Yes – these segments are excellent candidates. Auto refinance for poor credit customers is doable and these people can absolutely benefit from this type of loan.  If your credit is average or below average, then you could substantially decrease your car payments. At the time when these customers got their first loan, their credit was not perfect.  Thusly the rate that they received was high. However, if you’ve made steady payments on your auto (and your mortgage) over the past 6-12 months, then you could be an excellent candidate for a refinance.  Essentially the bank can infer that these customers deserve a better rate given their recent strong payment history on their liabilities.

Bankruptcy auto refinance customers.

This segment can get a refinance, but it is tricky.  You must have a discharged chapter 7 or chapter 13 bankruptcies.  If your credit has improved after a bankruptcy, over 4-8 months, then you might qualify.  Usually when a consumer has multiple bankruptcies it will automatically disqualify them for an auto refinance.  

Customers with newer vehicles with relatively low mileage.

Most auto refinance companies will have guidelines for vehicles that they will refinance.  Because the loan involves a piece of collateral (your car), the bank wants to ensure that the collateral is valuable.

For mileage, most banks will refinance autos with fewer than 80K miles.
Banks will also have refinance guidelines around the types of vehicles, including make/model exclusions.  Most banks will not refinance commercial vehicles, recreational vehicles, conversion vans, motorcycles, large transport trucks, salvage titled vehicles, auto leases, and some Japanese makes like Isuzu and Suzuki because they do not retain their value very well and can’t fetch much at an auction should the loan go into default and the car is repossessed.