Top 5 cars to refinance in 2020 pre and post COVID-19

Jeff Guymon

Apr 20, 202011 min read

Updated: Aug 13, 2020

With the COVID-19 pandemic throwing your spending plans into disarray, managing your personal finances and financial planning have become nearly impossible. Having 'access to cash is king' these days. Refinancing your auto loan is a creative and effective way to free up cash while improving your overall financial situation.

We therefore performed a study in which we tried to identify cars that are great candidates to be refinanced both in general and during these trying times in particular. We hypothesized that we would find a correlation between a few specific car brands and their ability to be refinanced for three reasons:

Low Loan to Value (LTV): Some brands tend to have low LTVs, which helps. LTV is the amount you need to borrow divided by the value of your car. If a vehicle has a high resale value, LTV will be high.
Low Deprecation: Another factor that comes into play is depreciation – how fast is your car losing value? If the car brand you're driving is known for strong residual values - i.e. it maintains its value well - you will have positive equity in your loan earlier during the loan term, which will help.
Low Cost of Ownership (CoO): Lastly, Cost of Ownership of car brands vary. CoO is a metric that aggregates the cost to maintain, drive, and insure your vehicle. If your CoO is low, your car won't be spending a lot of time in the repair shop. Typically, borrowers make their payments reliably and in time for as long as the car drives well.

What are the most common cars sold in the U.S.?
What are the most common car brands to refinance?
What are the most common car models to refinance?
Most common years to refinance
How to refinance your auto loan and save thousands of dollars

What are the most common cars sold in the U.S.?

Americans drive a wide range of different cars. The top five brands Ford, Toyota, Chevrolet, Honda and Nissan though make up 55% of all car sales. In other words, every other new-ish car you see on the street is either a Ford, Toyota, Chevrolet, Honda or Nissan.

About 85% of new cars are financed and 79% of consumers get their loan at the dealership. The question we want to study in the following is: among all the brands, are there any brands that are more likely to qualify for refinancing?

What are the most common car brands to refinance?

In our study 'The best way to lower your rate? Make your payments!' we found that over a typical payment period of 6-24 months, your credit score can significantly improve. In fact, a disciplined borrower can very easily improve her score from for example the low 500s to 650 or above in as little as 12 months.

Auto loan rates don't vary a lot for credit scores above 750. Below 700, however, the market is very inefficient, i.e. auto loan rates are all over the map. What cars do people with challenged credit buy? Or better, what cars can people with challenged credit finance easily ... and refinance later on?

The chart below shows the market shares of all the brands studied above in dark blue. In pink, you will see the market share of brands sold to people with challenged credit:

The findings are fascinating! Ford, Kia, Nissan, Hyundai and Chevrolet own practically two thirds of the market of people who are most likely to qualify for attractive refinancing. Among those brands, Nissan, Hyundai and Kia are most striking:

While Nissan's overall market share is 7%, Nissan's share in the segment of people who are likely to qualify for refinancing is twice as high, i.e. around 14%.
While Hyundai's overall market share is 4%, Hyundai's share in the segment of people who are likely to qualify for refinancing is three times as high, i.e. around 12%.
Lastly, while Kia's overall market share is slightly below 4%, Kia's share in the segment of people who are likely to qualify for refinancing is four times as high, i.e. around 14%.

In other words, if you drive one of the above brands, you are up to four times as likely to qualify for refinancing than the average American.

Dodge, Volkswagen and Chrysler stand out as well. The absolute market share of Dodge, Volkswagen and Chrysler combined however is only 5% of all cars sold and therefore relatively small compared to Ford, Kia, Nissan, Hyundai and Chevrolet.

What are the most common car models to refinance?

In the section above, we found that out of the 28 most common car brands, the 66% (i.e. two thirds) most likely ones to be refinanced were Ford, Kia, Nissan, Hyundai or Chevrolet.

In the following, we will study the respective brands' models in more detail. What models do people with challenged credit buy? Or better, what models can people with challenged credit finance easily ... and refinance later on?

Most common Ford to refinance

Ford builds a variety of great cars. In 1913, Henry Ford was the first person to install an assembly line for the mass production of automobiles. The assembly line reduced the time it took to build a car from more than 12 hours to 2.5 hours.

Today, Ford's best selling vehicle is the F-150 truck. In fact, the F-150 is not only the most sold Ford but also the Ford with the highest margin. However, when it comes to refinancing, the picture looks very different.

We found that among all Fords, people with challenged credit and the potential to refinance primarily own the Fusion and Escape.

The finding that the Fusion and Escape are the Fords most commonly owned by people who can refinance is especially fascinating when we look at the overall market share of these models:

The share of Fusions among all Fords sold is only 9%. But the share of Fusions purchased by people who are likely to qualify for refinancing is 43%, i.e. five times as high!
The share of Escapes among all Fords sold is only 12%. But the share of Escapes purchased by people who are likely to qualify for refinancing is 24%, i.e. twice as high!

Our auto loan refinance calculator will estimate monthly payments for all Ford models:

Most common Kia to refinance

I'm not going to lie, we have a thing for Kias! Kia is a South Korean auto brand and started out as a manufacturer of tubing and bicycle parts in 1944. In 1951, Kia produced Korea's first domestic bicycle.

Today, Kias are great value for money. They offer a wide range of different models with an outstandingly low Cost of Ownership (CoC). We therefore were not particularly surprised to find that Kia is among the brands most likely to be refinanced.

The Kia Forte, Soul and Optima combined make up 76% of the most likely to be refinanced models.

Contrary to Ford, and consistent with our low CoC theory, the share of models likely to qualify for refinancing seems much more equally distributed among all Kia models. Does that mean all Kia models are relatively likely to qualify for refinancing?

Yes, that is exactly what we found! We were able to further confirm our findings by looking at the market shares of each of the Kia models:

The market share of each of the more popular models is very equally distributed. Kia sells almost the same number of Souls, Optimas, Sorentos and Sportages.
The Kia Forte stands out on the chart below. Kia stopped selling that model in 2019.

Our auto loan refinance calculator will estimate monthly payments for all Kia models:

Most common Nissan to refinance

Nissan is a Japanese car company and unexpectedly was the largest car manufacturer in the U.S. in 2014. As of 2018, Nissan was also the largest electric vehicle (EV) manufacturer. The Nissan Leaf was the first wide-spread EV and is still very popular.

Nissans are great value for money and are known for their low Cost of Ownership (CoC), too. Interestingly, the company has a relatively broad range of models. However, we found that people with challenged credit and the potential to refinance primarily own the Altima, Versa and Sentra.

Those models make up 68% of all of Nissan's sales in that credit segment.

Just like with the other brands, we compared Nissan's models most likely owned by people with challenged credit and the potential to refinance with Nissan's nation-wide sales breakdown. The findings are very surprising!

As mentioned before, Nissan has a broad model selection. Interestingly, most of Nissan's models are not driven by people who are likely to be refinanced:

61% of Nissan's sales come from models other than the Altima, Versa and Sentra and are likely refinanced at a much lower rate.
The Altima is almost twice more likely to be driven by a person who might qualify for an attractive refinancing than not.
The Versa is almost four times more likely to be driven by a person who might qualify for an attractive refinancing than not.

Our auto loan refinance calculator will estimate monthly payments for all Nissan models:

Most common Hyundai to refinance

Hyundai is the second South Korean brand on the list of vehicles that are most likely to qualify for an attractive refinancing. The fun fact about Hyundai are its slogans, which varied over time:"Prepare to want one", "Always There for You" and "Driving is believing" are my favorite ones.

Hyundai is sells everything from small sporty coupes like the Veloster all the way to a huge family SUV with 7 seats like the Santa Fe. We like Hyundais for their fancy and modern design.

Among Hyundais, we also found that three models make up 67% (i.e. also two thirds) of the more likely to be refinanced models. Those likely to be refinanced models are the medium sized Elantra, the bigger Sonata and the little Accent.

Just like with the other brands, we compared Hyundai's models most likely owned by people with challenged credit and the potential to refinance with Hyundai's nation-wide sales breakdown. The findings mirror the findings of the models of the other brands.

Hyundai does not generate most of it's sales with the models that are also most likely to be owned by people who will qualify for refinancing.

The Elantra is common both among people with good as well as challenged credit.
The Sonata and Accent, in contrast, seem to specifically target customers with challenged credit and who can look forward to refinancing their car loans down the road.

Our auto loan refinance calculator will estimate monthly payments for all Hyundai models:

Most common Chevrolet to refinance

Louis Chevrolet and the ousted General Motors founder William C. Durant started Chevrolet in 1911. Louis was originally a Swiss race car driver and automotive engineer.

Chevy is the second U.S. automotive brand that is among the commonly owned brands driven by customers who qualify for refinancing. In our study, we found that the big Equinox SUV and the smaller Malibu sedan make up close to 50% of Chevrolet's sales within the segment of people with challenged credit.

Chevrolet has a broad selection of vehicles ranging from a little Spark to the huge Silverado trucks. Since Chevy has such a broad selection, no one model makes up more than 20% of its sales.

Among the models sold, three models stand out as primarily targeting an audience with challenged credit that might qualify for attractive refinancing down the road.

The Malibu makes up 7% of Chevrolet's units but makes up 21% of the share owned by people with a high chance of refinancing, i.e. three times more.
The same is true for the Cruze, while it makes up 3% of Chevrolet's units it makes up 11% of the share owned by people with a high chance of refinancing, i.e. three to four times more.
Lastly, the Impala makes up 3% of Chevrolet's but is 7% of the units sold to people with a high chance of refinancing, i.e. more than twice as much.

Our auto loan refinance calculator will estimate monthly payments for all Chevrolet models:

Most common years to refinance

Fascinating and rather unexpected findings in the study above, right? We were astonished, too. Now that we're done with studying the different brands and models, we couldn't resist but also take a look into the average age of a likely to be refinanced car.

One thing to clarify: we performed this study in early 2020, i.e. a 2019 model is around 1 year old, a 2018 model is around 2 years old, a 2017 model is around 3 years old and so on. As you can see on the chart below, the most likely to be refinanced cars are year 2015 - 2017. That means, when bought used, the cars were 3 - 5 years old.

The best time to refinance a car is probably in the first 3 years of ownership. That means, cars most likely to be refinanced are between 6 - 8 years old at the time of refinancing.

We performed this study to identify which cars are great candidates to be refinanced both in general and during the COVID-19 pandemic in particular. We hypothesized that we would find a correlation between a few specific car brands and their ability to be refinanced.

As demonstrated above, we were able to narrow down both which brands, which models and which vehicle years are most likely to be refinanced. Obviously, you can refinance any car and we highly encourage you to look into refinancing if you haven't done so, yet. However, if we had to predict your likelihood to qualify for an attractive refinancing, we would base our guess on the findings above.

How to refinance your auto loan and save thousands of dollars

When we performed the study above, we once again realized how big of an opportunity for savings refinancing presents for a lot of Americans. A lot of Americans are currently overpaying on interest and hence have higher monthly payments than necessary.

Thankfully, we can help you lower your monthly payments. In our article 'The best way to lower your rate? Make your payments!' we found that a lot of Americans can refinance their car loans and save thousands of dollars.

WithClutch.com is a fully digital platform that lets car owners like you do so from the comfort of their own home. No need to set a foot in a bank or credit union. You can lower your rate or get cash in as little as 20 seconds.

Follow three simple steps to refinance your auto loan, get approved in seconds and save thousands in minutes.