Car loans allow buyers to pay off their vehicles over time, dividing a substantial amount of money into manageable installments. 

The total expense of an auto loan, both month to month and over the years, depends on several elements like the down payment, interest rate, APR, and term length. 

The down payment lessens the loan amount and decreases your loan payments during the loan term. 

The annual percentage rate, or APR, is made up of the interest rate, along with additional charges by the lender, and is applied to the principal amount you borrow over time. 

Auto loan terms usually last 24-84 months. Longer terms can lower your monthly payments and help you get behind the wheel of a make and model that may have cost more than your initial budget. 

Buying a used car offers several advantages over purchasing a new one. You have the opportunity to save thousands of dollars while still driving away in a nearly new vehicle. 

Whether you want something with good gas mileage or the utility of a truck, where can you go for a quality vehicle that stands the test of time? Shift offers best-in-class service contracts at a fair price without sales pressure. You get the great price and value of a used car with the bumper-to-bumper protection of a new car. At Shift, you'll get a fair, no-haggle price driven by powerful machine learning algorithms and tons of data. Want to take a test drive before you buy? If you live in one of Shift's many service areas, a concierge will drive to you, letting you get a feel for the car's performance before signing the papers.

Several scenarios present an excellent time to refinance your current auto loan.

If you had a poor credit report when you initially signed your car loan and it's since improved, refinancing could be a wise decision. 

A higher credit score can mean a lower interest rate and APR, potentially lessening your monthly payments and total expense over time. 

Maybe your old loan had an APR of 8 percent, but you've been able to raise your credit rating since your car purchase. Refinancing your car loan with a lower rate could save you a nice amount of money, letting you keep extra funds in your bank account for the length of your loan.

If you're after a lower monthly payment, refinancing a loan with a longer-term length gives you just that. With additional months and years added to the life of the loan, the total cost is divided further into smaller pieces. 

In the time after you took on your auto loan, U.S. consumer interest rates may have gone down. When this happens, auto loan rates correspondingly decrease. In this case, auto loan refinancing is an appealing option.

Perhaps you've been paying off your old loan for a while and hold substantial positive equity in your vehicle. You might receive better terms in this scenario, making it an excellent time to refinance.

If you've had a poor experience with your current lender, it could also be an excellent time to refinance. Whether it be bad customer service or just how they do business, switching companies and refinancing may be better for you.

Just like there are excellent times to refinance an auto loan, there are also times to avoid doing so.

If your vehicle purchase was relatively recent, say six months or less, refinancing isn't the best choice. Giving yourself time to build up a reliable car payment history, allowing your credit score to increase after taking on the loan, and accounting for depreciation all set the stage for refinancing at a later time. It's also unlikely that you can refinance with better terms when you have a relatively new auto loan.

Sometimes the fine print on a car loan hides prepayment penalty charges for paying it off early. If this is the case, you'll want to calculate if refinancing is worth it.

Finding a lender willing to refinance your original loan could be difficult when you own an older vehicle, say 10 years or more. Typically, a vehicle age limit for refinancing a car loan. If this is the case for you, either trading in your vehicle or taking out a personal loan could be a better choice than refinancing. 

If you owe more on your auto loan than your vehicle's worth, also known as being underwater or upside down, refinancing may be prohibitive. Even if you find a way to refinance, the interest rate will likely be higher, and your costs will rise month to month and over the term. If you find yourself underwater on a loan, one workaround is paying down the upside-down amount in cash, then proceeding with refinancing your loan balance. 

While financing helps you buy the car you want, securing a new loan can be a hassle. Not only do you want a good deal, but also work with someone you can trust. Shift works with a network of trusted lenders who compete for your business, so you get the best deal on financing. Applying for financing with Shift is simple and easy, with no cost or obligation. Financing with Shift is so convenient that nine out of 10 buyers choose us when they need a loan. There's no need to worry if you have low credit because Shift welcomes co-signers. And Shift reassures you with their seven days, no-questions-asked refund policy. In case you aren't fully satisfied with your purchase, you're able to return it with no questions asked.

Refinancing your car loan can offer you the chance to save money on your monthly payments and over the long haul. But there are certain situations where refinancing is more advantageous than others. 

Refinancing could be a worthwhile option if you find yourself with an improved credit score or have built up substantial equity in your vehicle. But if you've recently purchased a car or have negative equity on your loan, refinancing may not be worth pursuing. 

Looking at your specific situation and considering those details, you can decide whether or not refinancing is the best option.