How to Refinance Your Older Car

America’s cars are getting older. The average age of vehicles on the road reached a record high of 12.6 years in 2024, with nearly 38% of vehicles in the 6 to 14-year-old range.

Rising new car prices and economic uncertainty mean many people are sticking with older vehicles. If you're among them, refinancing your car loan can help lower your monthly payments, reduce interest rates or improve loan terms.

Refinancing is more commonly associated with newer vehicles, so although refinancing an older car is possible, it can bring unique challenges.

We’ll walk you through the key steps in refinancing an older car to help you save money and navigate lender requirements.

‍

Can you refinance an older car?

Yes, you can refinance an older vehicle, but it’s often more challenging than refinancing newer models.

‍

Cars are depreciating assets, meaning they lose value over time. For this reason, some lenders are unwilling to refinance cars older than 10-15 years or with mileage over certain amounts.

However, some lenders specialize in refinancing older vehicles. They will typically evaluate your car’s condition, remaining loan balance, your creditworthiness and other factors to determine eligibility.

‍

General criteria for refinancing

In addition to your car’s age and mileage, lenders also consider the following criteria:

• Vehicle condition: A well-maintained car is more likely to qualify for refinancing, as they are more appealing to lenders.
• Make and model: Certain brands retain their value better than others — and this can impact a car’s refinancing eligibility.
• Loan-to-value (LTV) ratio: Owing less than the car's market value, also called positive equity, can improve your chances of approval.
• Income and debt-to-income ratio: Lenders will assess your ability to repay the loan based on your income and overall debt obligations.
• Credit score: A higher credit score can help secure better interest rates and terms.
• Remaining loan balance: Many lenders specify a minimum remaining balance for refinancing a car loan. Smaller loans often have different criteria compared to larger ones.

‍

Understanding these factors can help you make informed decisions during the refinancing process.‍

‍

When you may not be able to refinance

‍Some circumstances can complicate the process of refinancing an older car. Lenders may be reluctant to refinance under the following conditions:

• You have negative equity: If you owe more on the car than its current value, refinancing may be more difficult. 
• Your car has high mileage: Most lenders prefer vehicles with less than 150,000 miles.
• Your car is too old: Cars over a certain age — typically 10 to 15 years old — may be more difficult to refinance.
• Your car is in bad condition: Significant wear, damage or mechanical issues may disqualify a car from refinancing.
• You have a low loan balance: Refinancing small loan amounts may not be worthwhile for a lender, as the costs of refinancing may not justify the effort.

‍

While these factors can limit your ability to refinance an older car, there are specialized lenders who could offer options if your credit score and finances are strong. Shop around with different lenders to find the best offers for your situation.

‍

Refinancing classic cars

‍Classic cars are typically defined as vehicles over 20 to 25 years old, and they’re rare on the roads. Unlike modern vehicles, which tend to depreciate quickly, classic cars can hold or even increase their value over time. This potential to appreciate in value can make lenders more willing to finance or refinance classic vehicles — provided they are well-maintained and have historical or collector value.However, auto refinancing for older cars can be challenging. It may require a specialized lender who conducts more demanding appraisals to determine the car’s condition.

‍

Auto refinancing for older cars in 5 steps

‍Refinancing an older car could help you achieve significant savings or improved loan terms. Follow these five steps to navigate the process:

‍

1. Consider your financial situation

‍Review your finances and consider if it’s worth it to refinance your car loan. There are certain situations where it may make sense to refinance:

• Your credit score has improved: A better score may qualify you for a lower interest rate, which can decrease the total cost of your loan.
• You need a lower monthly payment: Extending your loan term could lower your monthly payments. While this frees up cash in the short term, it can increase your total loan costs over time.
• You have strong equity: Owing less than your car is worth could improve your chances of favorable loan terms.

‍

2. Assess the value of your older car

‍The value of your car impacts your eligibility for refinancing. Key factors affecting an older car’s value include:

• Age and mileage: Cars depreciate over time, so older cars will generally have lost more value than newer models. Vehicles with higher mileage are also less appealing to lenders due to their reduced value.
• Condition: Well-maintained cars generally hold their value better. Issues like dents, rust or mechanical problems can also lower your car’s market value.
• Make and model: Certain brands and models are known for retaining value longer, particularly high-end vehicles and brands with a reputation for durability.
• Rarity and demand: Limited edition cars, unique models and classic cars can command much higher prices due to relative scarcity and high demand. 
• Market trends: Seasonal changes or local demand can also affect a car’s resale value. For example, convertibles or SUVs may see seasonal fluctuations, with prices influenced by weather, economic conditions or other factors.

Websites like Edmunds, NADA or Kelley Blue Book can help you gauge your car’s market value based on its age, mileage, condition and other criteria.

‍

3. Research and compare lender offers

‍Traditional lenders tend to prefer refinancing newer vehicles, so you may need to research lenders who specialize in older cars. Comparing rates, terms and loan amounts is important to ensure you choose the best lender offer. Our auto loan refinancing calculator can help you compare rates and estimate savings from different lenders. 

‍

4. Submit your application

‍Once you’ve narrowed your choices, get ready to apply. Start by gathering the necessary documents, such as proof of income, vehicle details and your current loan agreement. Many lenders offer pre-approval to streamline the process and to give you a clear picture of potential loan terms before you commit. 

‍

5. Review and finalize your loan offer

‍After receiving loan offers, carefully review and compare them. Pay special attention to the interest rate, repayment terms and any fees. Once you’re satisfied, sign the loan agreement and follow the lender's instructions to transfer the title or pay off your existing loan balance. Finally, your new lender will pay off the original loan — and you can begin payments under your new terms.

‍

FAQs

‍Here are answers to some common questions about refinancing older cars:

Is a car too old for a loan?

‍Generally, newer cars get better rates due to their higher resale value. Some lenders have specific age limits for vehicles they will finance, so you may have fewer refinancing options for a car over 10 years old.

‍

Can you refinance a car older than 10 years?

‍Yes, you can refinance a car older than 10 years, but your options may be limited compared to newer vehicles. Specialized lenders offer refinancing for older vehicles if the car’s condition, value and your creditworthiness meet their criteria.

‍‍

Is it hard to refinance a 10-year-old car?

‍Refinancing a 10-year-old car can be challenging, as most lenders prefer newer vehicles. Lenders tend to see older vehicles as a higher risk, so they may impose stricter terms or higher interest rates. If your car is well-maintained, has a positive loan-to-value (LTV) ratio and you have a strong credit profile, your refinancing application is more likely to be approved.