High Mileage Auto Refinance: What to Know

Those long road trips and meandering Sunday drives were worth it for the memories, but the added miles on your car often make auto refinancing more challenging. 

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You can refinance a car loan with high mileage. However, different lender requirements could affect which options are open to you. Learn about common mileage limits and vehicle age restrictions, plus alternatives to consider if your vehicle doesn’t qualify.

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Key takeaways

• It’s possible to refinance a car loan with high mileage, although lender criteria varies.
• Cars with 100,000 miles or more are often considered high mileage, though some lenders go up to 150,000.
• Focus your search on lenders who work with older vehicles, keeping in mind that the total value of the car is important, not just mileage.
• Lenders also consider your credit score, loan amount, and other factors when deciding whether to approve a high-mileage refinance.

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Can you refinance a car loan for a high mileage vehicle?

An auto loan refinance uses the vehicle as collateral to secure the loan. The lower the value of the vehicle, the more risk for the lender. That’s why lenders typically prefer vehicles that have fewer than 100,000 or 150,000 miles; these cars are usually worth more. The same goes for an older car refinance: lenders usually prefer cars that are less than 10 years old, because they tend to be worth more than older cars.

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The make and model of your car could also affect whether you could qualify for an auto finance with high mileage. Some lenders won’t refinance car makes that are no longer in production, for example, or those with a history of frequent mechanical failures.

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Other factors lenders consider

Lenders have other auto refinancing requirements beyond vehicle age and mileage. These criteria also affect your loan offers.

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• Loan-to-value (LTV) ratio:
• Remaining loan balance: Each lender decides the minimum payoff amount they’re willing to refinance, such as $4,000. 
• Time remaining on loan: Lenders also set a limit for the months remaining on your loan. For instance, you might need to have at least 12 months remaining on your loan to qualify. 
• Credit history: Lenders run a hard credit check on your credit report to see your credit score, payment history, and other debts. 
• Income: You’ll need to provide proof of income or stable employment.
• Debt-to-income ratio (DTI): What you owe compared to what you earn. Keeping your DTI to 30% or less could help you receive better loan offers.

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What counts as “high mileage” for auto refinancing?

What’s considered high mileage auto refinancing varies by lender. Most lenders will refinance a vehicle with less than 100,000 miles. 

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If your car has between 100,000 and 125,000 miles, some lenders will consider it to have high mileage. If your vehicle has 125,000 to 150,000 miles on it, most lenders will consider it to have high mileage. However, there are lenders who will refinance loans for cars with mileage in this range if the vehicle still has value and fits their other guidelines.

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Pros and cons of high mileage auto refinancing

Refinancing a car loan with high mileage could help you save money by lowering your interest rate, which decreases your total interest costs. It could also help you lower your monthly payment, which can free up room in your budget for other bills or priorities. If your credit score has gone up, or if rates in general have gone down, you could qualify for a lower interest rate than what you’re paying now.

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Refinancing to a shorter loan term could help you pay off the car quicker by condensing your repayment timeline. Paying off your loan in a shorter timeframe is another way to lower your interest costs and save money overall.

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There are some drawbacks to consider, though. Refinancing to a longer loan term would extend your repayment timeline and could cost you more in total interest. 

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If your vehicle drops in value faster than you can pay off your refinance loan, you could wind up upside down, where you owe more than the car is worth. That could make it expensive to sell or trade in the vehicle, because you’ll still need to pay off the loan balance.

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Steps to refinance a car loan with high mileage

The process for high mileage auto refinancing is similar to refinancing a car with average mileage, except you may need to spend more time shopping for the right lender.

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Here are the general steps:

1. Gather your loan details, including payoff amount.
2. Check the value of your vehicle at its current mileage using online tools like Kelley Blue Book.
3. Calculate your LTV by dividing the loan amount by the vehicle value, then multiply by 100. 
4. Shop for lenders, focusing on those that offer older vehicle refinancing where your vehicle can meet their criteria.
5. Gather the documents you’ll need to apply, including driver’s license, pay stubs, Social Security number, VIN, and current odometer reading.
6. Request quotes from at least three lenders. Prequalifying online lets you see your estimated rate without a hard credit check.
7. Fill out a loan application with your selected lender and upload the required documents.
8. Sign your loan paperwork to finalize the loan after approval.

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Consider all your refinance options

It can be challenging to refinance a car loan with high mileage, but if it helps you save money, the effort is worth it. That’s why it’s smart to do your research before you shop. 

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RefiJet specializes in helping car owners make smart choices about their money. Our guide to auto refinancing shows you how to pick the best lender for your needs. To see your potential savings, try our auto-refinancing calculator, which shows you what your new payment could be.

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FAQs

Below are some frequently asked questions about refinancing a high-mileage car.

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Can you refinance a car loan with high mileage?

Yes, you can refinance a car with high mileage if the vehicle meets the lender’s requirements. Lenders look at more than just a vehicle’s mileage when approving a loan.

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What counts as high mileage for auto refinance?

Most lenders will refinance a car with less than 100,000 miles on it. Different lenders have different criteria for what they consider a high-mileage loan, but the cutoff is usually between 100,000 and 150,000 miles. 

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Does mileage affect auto refinance rates?

Yes, it can. Lenders set rates based on their risk in lending to you. A vehicle with high mileage typically has a lower value, making a refinance loan riskier for the lender. 

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What lenders look at besides mileage when refinancing a car?

Lenders will also consider your credit history, income, loan amount, make and model of the car, and vehicle condition when evaluating your loan application.

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What can I do if I’m denied because of mileage or vehicle age?

First, make sure you shop around for other lenders. Different lenders have different criteria for an auto refinance, and some specialize in high mileage vehicles. If your car’s mileage is too high to get approved, you could work to improve your application in other ways, such as making a down payment or improving your credit.

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