This information is provided by our friends at Pentagon Federal Credit Union (PenFed).

Compared to the commitment of a mortgage, an auto loan seems like a drop in the bucket. Refinance a car loan? Why bother?

If the conditions are right, the right refinancing deal could save you a pretty penny over the life of your car loan. When conditions are right, the reasons to refinance your car make good financial sense.

1. Save money on interest. Refinancing a new car essentially means converting your loan to a used-car loan, although PenFed considers current (2015) and previous model (2014) years to be a new car refinance. Since interest rates for used-car loans are normally higher than rates for new cars, refinancing won’t make any sense unless your new used-car rate will be lower than your old new-car rate.

2. Get the rate you’ve worked hard to deserve. If you’ve tuned up your credit score since you bought your car, you might qualify for a lower interest rate. Especially if your loan is for a longer payment term, a lower rate can keep that interest snowball from gaining speed on you.

3. Make a better deal. So your original car loan wasn’t such a hot deal. Ready for a do-over? A refinance can offer exactly that, letting you slip out from under a not-so-smart deal.

4. Lower your monthly payments. If your budget has gotten significantly tighter since you got your car, you might need to stretch out the term of your loan to lower your monthly payments. In the long run, you’ll pay more that way, but a refinance can help if you need some serious belt-tightening in the meantime.

Are you ready to refinance?

If you suspect it might be time to re-run the numbers to see if refinancing makes sense, try PenFed’s auto loan calculator or MOAA’s suite of financial calculators to experiment with the variables: loan amount, loan term, interest rate, and monthly payment. Just remember, in order to refinance an existing PenFed auto loan, the advertised rate must be equal to or greater than your current PenFed auto rate. PenFed offers financing up to 100 percent, and you might be eligible for an instant decision on your application.

Learn more about buying, selling, and financing your wheels: