Is it possible to refinance your car in someone else’s name?
In many cases, the vehicles are not cheap. In fact, some borrowers refinance their vehicles a few months after purchase to get better interest rates and lower monthly payments. Refinancing your new car also allows you to add or remove someone from your car loan. But is it possible to refinance your car in someone else’s name?
We at the Home Media Appraisal team will walk you through the steps and risks of trying to refinance your car on someone else’s behalf. We will also recommend a few companies that offer the best auto refinance rates for 2022.
Can you refinance a car loan to someone else?
Removing your name from a car loan and the title is complicated. This is a multi-step process (more details below) with no guarantees. The best option if you want to refinance your car on someone else’s behalf is to sell the vehicle.
Here is what the new owner should do:
- Find a lender to work with
- Get approved for a loan
- Sign documents
- Receive a lien release letter
- Have the title transferred to their local DMV office
Steps to refinance your car in someone else’s name
As stated above, refinancing your car in someone else’s name is technically possible, but not easy. There is no guarantee that a lender will approve your application for car loan refinancing.
Step 1: Refinance your vehicle with a co-signer
The first step to refinancing your car on someone else’s behalf is to apply for an auto loan with a co-signer. The lender will consider your vehicle, your loan balance, and your and your co-signer’s credit history. If you qualify, you will both sign the loan and the title of the car will be updated with that person’s name and yours.
Step 2: withdraw from the loan
Withdrawing from vehicle ownership is complex. You will need to refinance your vehicle a second time to remove your name from the loan and title. Remember that the lender does not have to approve your loan application. They can deny your request for any reason, such as if your co-signer has bad credit.
Withdrawing from the loan could also negatively affect your credit score. Indeed, refinancing requires a credit check and you would receive two serious requests in no time.
Alternatives to consider
There are several other options to consider before trying to refinance twice to get rid of your current loan and vehicle title.
Refinance the vehicle on your own
Refinancing your car loan on your own can be the right decision if you want to get better terms for your loan. Lenders can offer you a significantly lower annual percentage rate (APR) if you have good credit and positive equity in your car.
Refinance with a co-signer
If you have bad credit, having a co-signer on your loan can increase your chances of being approved for car refinancing. This could help you or your co-signer build your credit and establish yourself as a co-owner of the car.
Exchange your vehicle
Most dealerships accept vehicle trade-ins when you buy a new or used car. You may want to consider this option if you cannot be approved for car refinancing and you owe more than the value of the car.
Our recommendations for car refinancing
Borrowers are refinancing their auto loans to get lower interest rates and auto loan repayments. When we researched the best auto refinance rates for 2022, we found that Auto Approve and myAutoloan offer some of the most competitive rates in the industry and have a solid reputation.
Automatic approval: first choice for refinancing
Unlike most lenders, Auto Approve does not offer new car loans. Instead, the company offers auto refinance loans for cars, trucks, SUVs, motorcycles, ATVs and boats. Borrowers with good credit may qualify for annual percentage rates (APR) as low as 2.25%.
Auto Approve has a solid reputation as a financial institution. The company is accredited by the Better Business Bureau (BBB) and holds a A+ rating organisation.
Read more: Automatic Approval Review
MyAutoloan: the most popular marketplace
As an online marketplace, myAutoloan allows borrowers to compare lender offers in one place. The company offers new and used auto loans, auto refinance loans, car loans between individuals and lease buyout loans. Auto refinance rates start at 1.99% APR for a loan term of 36 months or less on the myAutoloan marketplace.
The financial institution has a A+ rating of the BBB and is accredited by the organization. Trustpilot customers grant myAutoloan a 4.2 star rating out of 5.0 on average.
Read more: myAutoloan review
Because consumers rely on us to provide unbiased and accurate information, we’ve created a comprehensive rating system to formulate our ranking of the best car loan companies. We’ve collected data on dozens of loan providers to score companies on a wide range of ranking factors. The end result was an overall score for each vendor, with the companies scoring the most points at the top of the list.
Here are the factors taken into account by our assessments:
- Reputation (30% of total score): Our research team considered ratings from industry experts and each lender’s years in business to assign this rating.
- Availability (20% of total score): Companies that cover a variety of circumstances are more likely to meet the needs of borrowers.
- Loan details (15% of total score): We considered the loan types, terms and loan amounts available from each lender to determine this score.
- Prices (25% of the total score): Auto loan providers with low APRs scored highest in this category. Available discounts have also been taken into account.
- Customer experience (10% of total score): This score is based on customer satisfaction ratings and transparency. We also considered the responsiveness and helpfulness of each lender’s customer service team.
*Data correct at time of publication.