The State of US Auto Debt
US auto loan balances are on the rise. According to the Federal Reserve, in the second quarter of 2026, early delinquency ticked up for auto loans.
This was despite a decline in household debt from $13 billion to a total of $18.8 trillion.
Generally, many of those taking out auto loans do not realise they have more options before missed payments begin to weaken their credit profile.
When this combines with rising gas prices, it stresses households even further.
According to the U.S. Bureau of Labor Statistics, the index for gasoline rose 3.9 percent in August 2026. Many households need both a car and its transportation options to go to work, then function outside that as a household unit.
On top of this, there are also maintenance costs and insurance to consider.
Thus, even in the opening stages, it is important that people choose a car that is within their budget and don’t get a vehicle that will be costly to maintain.
Even then, a modest change to a loan repayment can make some breathing room in this situation.
Lendbuzz is a website that can find you a deal with all the lower payment and APR headlines attached, but actually deliver on it.
They eschew application fees, origination fees, and prepayment penalties on refinanced loans.
Instead, they use an AI system to get key financial data points, offering more competitive rates when you refinance your car.
Checking Prepayment Penalties on Current Loans
The first place to look is actually not on a new loan, but your current one.
Many loans have exit fees written in, designed to punish you if you go elsewhere and charged if you pay the loan off early.
The reason for this is that the lenders do not get the interest payments they had planned for, and thus want compensation.
Begin by contacting your current provider.
Ask them if a prepayment fee was added to your contract, and how much it will cost if you take an early exit on the agreement.
It is then worth requesting a payoff quote and comparing it to the vehicle's current value along with the remaining loan term.
The current balance should be removed from the original purchase price. Cars naturally deteriorate in value, and doing this will mean you won't make judgements on outdated figures.
Checking a New Loan Application
Loans are rarely processed for free, especially if you are using a bank or credit union.
This means you need to get the fees for your new loan upfront. They could include several, such as administrative fees, origination fees, and credit check charges.
Astoundingly, these are often tacked onto the loan principal itself.
This means that you will pay interest on these fees, instead of paying them and having it done with. You need to check that these are reasonable and low, if they exist at all.
The Federal Trade Commission has acted against companies that have charged customers for costly add-ons they didn’t ask for, or did not know about. In some instances, people were falsely told they were required as part of their purchase.
This is why checking everything included is vital.
Looking Beyond the Lower Payment
Before beginning to check refinance quotes, those looking for a new deal must consider going beyond simply the monthly repayment amount.
They must identify financed products, fees, and the original amount financed before making a search for quotes.
The idea of refinancing is that it replaces a loan, ideally with a more favourable one. Yet it does not undo every cost included in the original contract.
Thus, refinancing could end up costing more in the longer term if these considerations are not taken into account.
The real risk is becoming what is known as ‘upside down’. This is when a consumer owes more on a car than it is actually worth.
It is easy to fall into this situation, especially if people finance high-value cars over a long period of time.
A good way to approach this is to get a few quotes that have been broken down.
Using the same payoff amount for age, look into the APR, loan term, fees, and total repayment.
Any lower monthly payment achieved by stretching the payment over longer terms can result in paying more interest overall.
