The term “auto refinance” is often associated with a lower interest rate and better payment terms. However, refinancing a vehicle successfully also depends on certain factors. One of them is your credit score, but that too is not the only factor at play. To land a better financing deal, you must also have a solid payment history to back your score up.

Hence, the key to reaching a successful auto refinance deal is to make sure that your new finance source views you as less of a risk and more of a potential candidate. You can do so by making every payment on time for a good chunk of time. However, if the question at the forefront of your mind is “how long should you wait to refinance a car?” here’s what to keep in mind.

Is There a Certain Duration You Should Wait For?

Even though it’s possible to apply for a refinance at any given time, it’s generally deemed better to wait for a while. In fact, here are some rules of thumb you should always be mindful of when thinking about refinancing your auto loans:

The Sixty-Ninety Day Rule

It’s better to wait for at least a period of two to three months before you get your original loan refinanced. This is because 60 to 90 days is the usual time it takes for the vehicle title to transfer to the new lender smoothly. Hence, most lenders wait for you to complete this process before they consider your application. However, also note that refinancing this early will only work if you have a good credit score and great payment history.

The Six Month Rule

If your credit isn’t great but not bad either, you may want to wait for at least six months to bring it to a point where you feel confident about auto refinancing. Moreover, for most people with a fair credit score, this time period is generally suitable because this is when they start to have more refinancing options.

The One-Year Rule

If this is the first time you’ve applied for a car loan, it’s better to wait for at least a period of 12 months before you consider a car loan refinance. This is because first-time borrowers require a good payment history to leave a credible impression on the lender, and building up that history requires at least a year.

In the end, whether you choose to wait for three, six, or twelve months, it’s important to understand what you wish to get out of refinancing. Hence, speak to a reliable lender and figure your options out before making a leap.