Here's How to Save Gas Money by Refinancing Your Car Loan

Americans are reaching deep into their household budgets to fill the gas tank, and there are few signs of relief. According to the U.S. Energy Information Administration, gas prices rose from $3.25 per gallon in July 2025 to $4.06 per gallon in July 2026. That’s a far cry from the average $2.25 a gallon drivers saw in 2020.

Industry experts cite higher inflation and the ongoing war with Iran, where chaotic shipping lanes have helped send the current cost of an average barrel of oil to more than $92 per barrel, $19 higher than in the same period in 2025, according to Fortune.com.

One way consumers can fight back against high oil and gas prices is to refinance their vehicles. Data from Caribou, an auto financing company, shows drivers who refinanced to lower their car payment in Q2 2026 saved an average of $162 monthly. That's one or two full tanks of gas every month without changing driving habits, Caribou said.

“We estimate that Americans overpay $54 billion on their auto loans every year,” said Simon Goodall, CEO of Caribou, in a statement. “Our latest data shows more drivers are catching on, and there’s real savings on the table when it comes to auto refinancing. It’s making a difference for drivers across credit profiles and vehicle types, but plenty of people still haven't checked what rate they’d qualify for today, even if it takes just a few minutes and could save them thousands of dollars a year.”

Take These Tips to the Table When Refinancing Your Vehicle Loan

Don’t sign any vehicle refinancing paperwork until you’ve done your due diligence and are properly prepared to cut a good deal with a lender. These action steps can help you get the job done.

Start by Shopping Around

Perhaps the biggest key to refinancing a vehicle is casting a wide net in your new loan search. “Different lenders evaluate the same borrower differently, so shopping matters,” Goodall told NTD News. “Consumers can also use the savings to pay down other high-interest debt faster, or shorten the loan term to pay less interest overall.”

“Most buyers take the dealer's offer without shopping,” Goodall said. On Caribou's platform, an identical credit profile can lead to interest rates from 4.49 percent to 13.99 percent from its lender network. “Every lender weighs credit, income, debt, vehicle, and loan balance differently. That's why the best rate varies by situation, and shopping matters,” Goodall said.

Leverage Good Credit

Lowering the interest rate or monthly payment of a car loan through refinancing could allow borrowers to use the extra money saved for fuel.

To determine whether refinancing is worthwhile, compare your current credit score with the score you had when you first took out the loan. “Although there are no guarantees of receiving better terms, an improved credit profile could result in better quotes from multiple lenders and lower the overall cost of the loan over its lifetime,” Gosselin said.

Build a Good Track Record

This strategy may not work if you’re in a hurry to refinance and have an uneven loan payment record, but  if you can wait until you have 12  months of on-time payments, your odds of getting a good refinanced loan at a good rate rises exponentially. “That regular on-time payment history can be your whole argument,” Bob Guillow, founder, Timberline Ventures, a consumer credit and lending services firm, told NTD.

Start with soft-pull pre-qualification so you’re not damaging your file while shopping, and do all your shopping inside a two-week window, since FICO treats auto inquiries in a 14-to-45 day span as a single inquiry, Guillow said. “Credit unions are the place to start. Several run rate-parity policies, meaning an ITIN member gets the same rate sheet as anyone else, which large banks generally do not offer,” he said.

Review Contract Terms Thoroughly

Vehicle refinancing consumers should also understand the loan’s term choice. “A shorter-term costs more monthly but saves interest overall,” Goodall said. “A longer term costs less monthly but costs more in total. Pick based on budget and how long they plan to keep the car.”

While you’re eyeballing the paperwork, review gap insurance and extended warranties from the dealership. “Car loan consumers likely overpaid and may not understand coverage,” Goodall added. “When refinancing, consumers can cancel them, get refunds for unused portions, and replace with better, lower-cost coverage. That could save hundreds of dollars more.”

Don’t Make These Rookie Mistakes With Your Car Refinance Deal

There are some potholes to avoid with your auto refinancing journey