When you refinance a car, you replace your current car loan with a new one of different terms. In practice, auto refinancing is the process of paying off your current car loan with a new one, usually from a new lender. This process can have varying outcomes for car owners. So, before refinancing, make sure you understand your motivations for refinancing and the outcomes you are seeking.

Most people refinance to save money. But this goal can take multiple forms. Some wish to lower their monthly payments. Others want to reduce their interest rates or adjust their loan term lengths. Still, others have more personal reasons to refinance, such as removing co-signers from their loans. No matter what is motivating you to consider refinancing your car, it is important that you understand the possible outcomes of refinancing a car.