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Getting approved for a car loan typically requires proof of income, but not everyone has a traditional 9-to-5 job or a steady paycheck. Whether you’re self-employed, between jobs, or have other forms of income, qualifying for a car loan without standard income documentation is still possible.

No income verification car loans may offer a solution for borrowers who have the financial resources to make monthly payments but lack conventional income proof. While they can provide a path to car ownership, no doc car loans may come with higher interest rates or stricter terms.

Here’s what you need to know about no income verification car loans, including what they are, how to get one, and resources you may need to get a car with no income.

Can I Get a Car Loan With No Income?

It is possible to get a car loan without traditional income, but it typically requires proving to the lender that you can still meet your financial obligations.

Instead of pay stubs or W-2 forms, lenders may accept other forms of income verification, such as bank statements, alimony or child support payments, Social Security benefits, retirement distributions, or investment income.

A strong credit score, low debt-to-income ratio, or offering a larger down payment can also help improve your chances of approval.

Challenges With No Income Verification Car Loans

Getting approved without income can be more challenging and may come with stricter loan terms. Lenders take on more risk when borrowers lack a steady paycheck, which means they might charge higher interest rates or require a cosigner.

It’s important to carefully review the loan agreement and make sure you can afford the payments before moving forward. Being honest about your financial situation and exploring multiple lenders can help you find the best option.

Recommended: Are Auto Loans Secured or Unsecured?

How to Get a Car Loan With No Proof of Income

Because lenders want reassurance that you’ll be able to pay back a car loan, if you have no proof of income, you may need to go one of these routes to get loan approval:

•   Cosigner

•   Cash-out auto refinance

•   Leverage good credit scores

•   Other income sources

Here is more information about each of these strategies:

Cosigner

When you have limited income or can’t prove your income, a car loan cosigner might be the right solution to get car loan financing. A cosigner is someone who agrees to share the responsibility of paying the car loan and, if the cosigner’s financial and credit scores are acceptable to the lender, this may lead to loan approval even when you can’t verify your own income.

Cash-Out Auto Refinance

You may apply for a cash-out auto refinance if you already have a car loan. This lets you borrow against the equity in your car to get cash for another purpose. A cash-out auto refinance, for example, may give you financing to cover medical bills or home repairs.

Good Credit Score

Lenders generally look at two main factors when deciding whether to approve a car loan: income and credit scores. If one of these two factors is acceptable to a lender, this may help to overcome some of the challenges with income. A good credit score can also help you secure a good interest rate on a car loan.

Other Income Sources

Perhaps when you say you have “no income,” you’re referring to job-related income. And, although individual lenders have their own requirements for their car loans, there are other forms of income that they’ll likely consider. These can include retirement or pension income, disability and Social Security income, and money from investments, including rental properties.

If you’re self-employed, even part-time, you can often use this income to qualify.

You can list child support and alimony, too, although you aren’t required to disclose these types of maintenance support income.

If you aren’t sure whether you’ll meet the guidelines for a particular lender, then requesting an auto loan preapproval can help. In this process, the lender will let you know what potential offer they’re likely to make, including the amount they’d be willing to finance. This is a conditional offer, but preapproval estimates can still provide helpful benchmarks for you as you seek to get an auto loan.

How to Refinance a Car

Here are tips if you want to know how to refinance an auto loan:

•   Ahead of time, you’ll want to find out whether a lender offers no income verification auto refi loans and whether you’ll meet their requirements.

•   Determine what the refinance costs might be.

•   Check to see whether your lender charges a prepayment penalty, because refinancing pays off the original loan early and replaces it with a new debt.

•   Refinancing using the same lender is a possible option to consider.

•   You may find auto refinancing that’s right for you by shopping around and comparing rates.

•   Borrowers may refinance for a lower interest rate, lower car payments, or extra proceeds from a cash-out auto refinance.

Recommended: Refinance a Car With Bad Credit

Where to Get a Car Loan With No Income

If you’re seeking a car loan with no income, consider starting with credit unions, online lenders, or buy-here-pay-here dealerships. These institutions may offer more flexible approval criteria compared to traditional banks.

Online lenders often cater to non-traditional borrowers and may accept alternative proof of income. Credit unions, known for their member-friendly approach, might be more willing to work with applicants who can demonstrate financial stability through savings, benefits, or other assets. Buy-here-pay-here dealerships may offer financing directly, though often at higher interest rates, so it’s important to examine terms carefully.

The Process to Get a Car Loan With No Income Verification

The process to get a no doc car loan can be challenging. You may begin the process by searching for a lender that offers car loans with no proof of income. You may need to present proof of identity and proof of residence. Borrowers may not need proof of income if a creditworthy cosigner brings proof of income to the table.

Some lenders may offer no income verification car loans if you have assets or cash that doesn’t come from a job. Not all lenders will be open to making this type of loan and those that are may have different requirements and processes.

Recommended: When Is a Car Loan Finalized?

The Takeaway

There can be significant differences between getting a car loan with no income whatsoever and getting a no income verification car loan—with each person’s financial situation driving the situation. Someone might get loan approval when they aren’t currently employed if the person has other income sources. This can be true when buying a car and when refinancing one.

If you’re seeking auto loan refinancing, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your car in minutes.

FAQ

What is a no income verification car loan?

A no income verification car loan is a type of auto financing where traditional proof of income, such as pay stubs or tax returns, may not be required. Lenders may instead consider alternative documentation like bank statements or asset information.

Can I get a car loan if I don’t have a job?

Yes, it’s possible. Lenders may approve applicants who are unemployed but have other sources of income or financial support, such as retirement funds, disability benefits, alimony, or significant savings.

What are the risks of getting a no income verification car loan?

These loans may come with higher interest rates, stricter repayment terms, or larger down payment requirements. Borrowers should be cautious and ensure they can make consistent payments to avoid repossession or credit damage.

Photo credit: iStock/Orachon Paksuthiphol

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOALR-Q225-007

A rear differential helps the wheels on your car turn smoothly and stay safely planted on the ground while you drive and make turns. The cost to replace this component can run from $2,500 to $6,000 or more.

Here’s a look at the factors that contribute to rear differential replacement cost, how to spot signs your rear differential might be failing, and how to pay for the cost of replacement.

What Is a Rear Differential and What Does It Do?

A rear differential is a part that mediates between the transmission and the rear wheels. The transmission delivers power to the wheels, but if the wheels were to turn equally at the same time, it would put strain on the axle and make it difficult for your car to stay on the ground.

When everything’s functioning properly, you turn the wheels of your car, and the wheels on the inside of the turn rotate at a different rate than the wheels on the outside. This is because of the rear differential. Having wheels that spin at different rates helps you negotiate turns and bumpy terrain.

The rear differential is located between the two rear wheels on your vehicle.

What Is the Average Cost of a Rear Differential Replacement?

Replacing a rear differential can cost, on average, $2,500 to $6,000 at the mechanic as of early 2025. If you’re mechanically inclined and have the proper tools, you may be able to save money by replacing the component yourself. But the task is time-consuming and labor-intensive, so you may want to leave it to the professionals.

Recommended: Smarter Ways to Get a Car Loan

What’s Included in a Rear Differential Replacement?

Removing and replacing a rear differential involves removing the brake lines, the axle and hub, the driveshaft, and your old rear differential. When replacing a rear differential, a good mechanic will also take a look at nearby components, including the driveshaft, rear axle, transmission, and wheels for damage or signs of wear. The mechanic will make sure the related components are in good shape and that the differential is installed properly.

What’s the Labor Cost to Replace a Rear Differential?

Replacing a rear differential is a relatively large job and can take your auto mechanic several hours to complete. It will also likely involve more than one person in order to hold heavy components in place while they are installed. The labor cost to replace a rear differential can run anywhere from $1,300 to $2,500.

Labor costs can vary by location and the complexity of the job.

What’s the Cost of Parts?

The cost of parts to replace a rear differential can run from $1,200 to $3,800. Part costs will depend on the make and model of your car and the quality of the part. Used parts, as you might expect, can be more affordable than, say, specialty parts for an imported sports car.

Recommended: 31 Ways to Save Money on Car Maintenance

Signs You Need to Replace Your Rear Differential

Be on the lookout for the following signs that your rear differential needs to be replaced:

Leaking Fluid

Differential fluid, or gear oil, is the oil that lubricates the moving parts of your rear differential. If you notice fluid under your car, it could be a sign that this fluid is leaking and that you may need your rear differential fixed or replaced.

Grinding Noises

Your rear differential is made up in part by a set of gears. As it wears out, these gears can start to grind. You may hear grinding noises or humming noises that get louder as you accelerate. If you catch this early enough, a fluid change may fix the problem.

Vibration While Accelerating

When the rear differential wears out, you may start to feel vibrations coming from the direction of the driveshaft. The vibrations should increase as you accelerate. Vibrations may signal a differential fluid leak or that you need your rear differential replaced.

Tire Wear and Tear

The rear differential allows your wheels to turn at different speeds. If it’s not working correctly and your wheels are turning closer to the same speed, your tires will start to wear out because they’re rotating too fast.

A differential that is locked will cause your tires to grip and slip intermittently. This could translate into chirping or squealing sounds, as well as vibrations.

Difficulty Handling While Turning

If you notice that your car has poor handling or feels unstable, especially while turning, it could be a sign that your rear differential is no longer allowing your wheels to turn at different speeds.

Any case of poor handling should be checked out immediately to head off a situation in which you lose control of your vehicle.

Recommended: Finance a High-Mileage Used Car

What Happens If You Don’t Get a Rear Differential Replacement?

A faulty rear differential can mean that your wheels aren’t spinning at the speed they’re supposed to, even when you’re driving straight. That can cause your car to pull to one side, or otherwise cause you to lose control. If the rear differential completely breaks, your wheels may stop turning and your car will no longer be able to move. Obviously, that’s a hazardous situation to be avoided.

A damaged rear differential can also cause damage to the components around it. Replacing it as soon as possible helps keep you safe while driving and protects the other components of your car.

Recommended: 11 Tips for Buying a High Mileage Car

How Often Should You Get a Rear Differential Replacement?

Your rear differential should last up to 200,000 miles or the life of a car, provided you take the proper maintenance steps. Your owner’s manual may have information about the ideal time to replace it. You may have to replace yours more often, though, if you drive on rough roads or bumpy terrain frequently.

Recommended: Airbag Replacement Costs

The Takeaway

A properly functioning rear differential is critical to a smooth and safe ride. If yours is faulty, it’s important to have it replaced as soon as possible, which typically costs between $2,500 and $6,000. If you don’t have the cash on hand to cover the cost of replacement, you might consider financing with a personal loan or a cash-out auto loan refinance.

If you’re seeking auto loan refinancing, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your car in minutes.

FAQ

Can I drive my car without a rear differential?

A car may be able to run without a properly functioning rear differential, but it is not safe to drive and can cause damage to nearby parts.

How do I maintain my rear differential to prevent future issues?

Keep up on regular maintenance, such as differential fluid replacement, to help ensure your rear differential operates as long as possible.

Will my insurance cover the cost of replacing a rear differential?

Your car insurance may only cover damage done in an accident that your vehicle is involved in. It will not cover normal wear and tear on a vehicle.

Photo credit: iStock/lechatnoir

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOALR-Q225-022

Refinancing your auto loan can be a smart financial move, but it may also affect your existing gap insurance coverage. If you’ve paid off your original loan or switched lenders, you might be eligible for a refund on the unused portion of your gap insurance.

Understanding how and when to request that refund can help you recover money you might otherwise leave behind. Here’s what you need to know about getting a gap insurance refund after refinancing.

What Is Gap Insurance and How Does It Work?

Gap insurance is a type of supplemental auto insurance. It can kick in if the vehicle you own is stolen or totaled before your car loan is paid off. The insurance then covers the difference between what your auto insurance policy pays out and the amount that you still owe on the vehicle. Thus, this policy is specific to the covered vehicle and to the loan you took out to buy that vehicle. Typically, you pay for it in one lump sum upfront, but in some cases, you may make monthly payments.

Reasons why an auto loan borrower may consider gap insurance include:

•   Getting a vehicle that depreciates quickly. When you bought your car, truck, or SUV, your lender may have required you to purchase gap insurance, especially if you purchased a vehicle that depreciates faster than average.

•   Making little to no down payment. You may have purchased gap insurance if you didn’t pay a down payment (or paid just a small one) and chose a long loan term. In this situation, there’s probably going to be a period of time when you could owe more on the vehicle than it’s currently worth.

In both these scenarios, gap insurance can provide coverage for the difference between what the car is actually worth and what your regular car insurance would pay out on it.

Note that, although you can buy gap insurance at the dealership as guaranteed asset protection or GAP waiver coverage, you can also talk to insurance agents to see what it would cost through them. When you add it to your current car insurance policy, rates are typically lower.

Recommended: Auto Refinance Calculator

An Example of How Gap Insurance Works

As a high-level example of how gap insurance could work, let’s say:

•   You’re buying a car for $30,000.

•   You put 5% ($1,500) down and borrow $28,500.

•   At a 4% interest rate for a six-year term, your monthly payment is about $445.

•   After a year, your outstanding balance would be about $24,200.

•   With a depreciation rate of 20%, the value of the car at that time would be about $19,200.

If the vehicle is totaled and you have collision insurance that will cover the current value of your car, you now have no car, and you still owe about $5,000 ($24,200-$19,200) on the vehicle loan.

Gap insurance is intended to cover that difference, so you won’t have an outstanding balance on the loan from a previous vehicle when you need to shop for a new one.

Gap Insurance Refunds

Under certain circumstances, you can receive a refund on a gap insurance policy that was paid in full upfront. These circumstances include when you’re:

•   Paying off, trading in, or selling the car that has the policy.

•   Refinancing your car loan for a lower interest rate or lower monthly payment, because auto refinancing pays off your old loan with a new one.

•   Carrying a loan balance that is less than the insurance coverage you have on the vehicle, ideally by at least a couple of thousand dollars.

If you’re in any of these situations, or if other circumstances make you wonder whether you’re entitled to a refund, contact your insurance agency.

You’ll need to provide your policy number and verification of the situation that may entitle you to a refund—for example, that you’ve sold your car. In that case, you can provide your insurer with paperwork that demonstrates proof of sale. Requirements for cancellation can vary by state, insurance company, and insurance policy, so find out what else is needed so you can provide that, too.

Again, note that these situations apply when you’ve paid for your entire gap insurance policy upfront, not when you pay a monthly gap insurance premium.

Recommended: What Is a Finance Charge on a Car Loan?

What Happens to Gap Insurance When You Refinance an Auto Loan?

When you refinance a car loan on a vehicle that has gap insurance coverage, you’re refinancing the loan on the vehicle, not the gap insurance. That’s because the gap policy taken out was connected to the original loan and, when that loan is paid off, the gap insurance policy is no longer in effect.

If you’ve paid your gap insurance in full already, you’ll likely get a prorated refund. If you were paying your gap insurance in installments, you probably won’t get a refund.

However, you may want to buy a new gap insurance policy that will fit your new loan. To determine whether you need it, consider the following:

•   First, does your new lender require gap insurance on your loan?

•   Next, if it’s not required, ask your car insurance company what it would pay out if your car was totaled.

•   Compare that amount to what you owe. If you owe less than the car’s value or the numbers are fairly close together, decide whether it makes sense to get a new gap insurance policy. If you owe more than the vehicle’s value, is this a number that you could afford to pay in addition to costs associated with getting a new vehicle?

Refinancing an Auto Loan Pros and Cons

There are several pros and cons of car refinancing, including the following:

Pros

Pros of auto loan refinancing:

•   Lower your interest rate and/or your monthly payments.

•   Get a different loan term.

•   Free up money to pay down other debt.

•   Switch lenders if you aren’t happy with your current one.

Cons

Cons of auto loan refinancing:

•   Need to pay a prepayment penalty if you refinance a car loan that features a prepayment penalty clause.

•   Need to pay fees for the new loan.

•   Experience a temporary dip in your credit score if the refi lender conducts a hard pull inquiry into your credit report.

•   Struggle to find a lender who will refinance a high-mileage car, a car older than 10 years, or an auto loan balance of less than $7,500 or more than $100,000.

Other Points to Consider When It Comes to Refinancing

•   The best time to refinance auto loans will differ for everyone.

•   Each person’s individual needs will determine how long to wait before refinancing.

•   If you can get a lower interest rate, then it often makes sense to refinance.

•   If you’re struggling with high payments, a lower interest rate or longer loan term can help.

•   Refinancing for a longer term can give you a lower monthly payment, but you may pay more in interest over the life of the loan.

•   It may be possible to have someone take over your car loan.

There is no “right time” to refinance. Mostly, it depends on your personal financial situation. Having said that, some banks may require that you keep your old loan for a period of time, perhaps six months, before it will refinance the vehicle. If you still want to refinance, in that scenario, you’d need to seek out a new lender.

Whatever you’re wondering, don’t be afraid to ask questions when refinancing. Lenders can explain the auto loan refi process and disclose any fees that might be involved.

Recommended: Which Credit Score Is Used?

The Takeaway

Gap insurance policies help to pay the difference between what you owe on a vehicle and its value if your car is totaled or stolen. There are times when you can get a refund on the policy if you’ve paid for the policy in full upfront, including if you choose to refinance the vehicle. And when refinancing to a new loan, if the lender doesn’t require gap insurance, you can decide whether or not to get a new gap policy on the new loan.

If you’re seeking auto loan refinancing, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your car in minutes.

FAQ

Does gap insurance stay even if you refinance?

No, gap insurance ends when your loan is paid off, including when you refinance. Gap insurance is tied to both your vehicle and your loan, so by refinancing, you’re essentially paying off the old loan with the new one and therefore ending your gap insurance coverage.

How big will my refund be?

Your gap insurance refund is determined by how long you have left on the policy. If you have 10 months remaining on the policy, for example, you’d get a refund for those 10 months. Keep in mind refunds are only given to those who have paid their policy in full. If you’re making monthly payments on your gap insurance coverage, you would not be entitled to a refund.

Do I have to request a refund or is it automatic?

You’ll most likely have to contact your policyholder to request the refund. While it may be automatic, it’s always best to touch base to make sure there’s nothing additional you need to do on your end to receive the refund.

Photo credit: iStock/bankrx

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOALR-Q225-006

Refinancing a commercial auto loan can be a smart financial move for business owners looking to reduce costs or improve cash flow. Whether you’re aiming to secure a lower interest rate, extend your loan term, or adjust your monthly payments, refinancing offers the flexibility to better align your financing with your current business needs.

Keep reading to learn the steps to refinance a commercial car loan, key considerations to keep in mind, and how to determine if it’s the right time for your business to make the switch.

How Does Refinancing Commercial Auto Loans Work?

First, it’s a good idea to check to see what the principal balance is on your current car loan. That’s because when you refinance a commercial auto loan, you pay off your old loan with a new loan. Ideally, the new loan will have a lower interest rate or more manageable terms.

By lengthening the term of your loan with an auto refinance, you could lower the amount of your monthly payments. However, because you’ll be repaying the loan longer, you’ll end up paying more in total interest, which increases the cost of the loan. By shortening your loan term, you can pay off your loan faster. In that case, your monthly payments will increase, but you’ll ultimately pay less interest.

You can refinance your car loan almost immediately after taking out your initial loan. You may want to consider a business auto loan refinance when interest rates drop or your financial situation improves, potentially qualifying you for a loan with lower interest. Reducing your interest rate will lower the overall cost of your loan.

Commercial Auto Loans Without a Personal Guarantee

A personal guarantee may be required for a regular business loan because the loan is unsecured and doesn’t require collateral. There’s nothing the lender can do to recoup their losses if you fail to repay the loan, so they may ask you to sign a personal guarantee that promises you’ll pay off the debt personally, with your own money, if your business fails.

But a personal guarantee may not be required for commercial auto loans when you’re using a car for business. A commercial auto loan is secured, and your vehicle is the collateral. If you fail to make payments, the lender can repossess the vehicle. Because of that, commercial auto loan lenders may not ask you to sign a personal guarantee.

Commercial Auto Loan Interest Rates

The interest rate on your commercial auto loan is the amount a lender charges you for borrowing money. The interest rate you’re offered is typically based on the financial health of your business and your business’s credit history. The lowest interest rates typically go to businesses with a strong history of paying back loans on time.

If your business does not have a long credit history, your lender may ask to look at your personal credit history and credit score to help determine the interest rate on the loan.

One way to potentially get a lower interest rate is to make a larger down payment on the car loan. That reduces the risk the lender is taking on, so they might offer you a lower rate.

Recommended: Does Financing a Car Build Credit?

Commercial Auto Loan Terms

Commercial auto loan terms can vary widely depending on the lender, the creditworthiness of the business, and the type of vehicle being financed. Typically, loan terms range from 24 to 72 months.

Some lenders may offer flexible repayment schedules, while others require fixed monthly payments. Understanding the specific terms — such as interest rates, fees, and prepayment penalties — can help you choose a loan structure that supports your business’s financial goals and cash flow needs.

When you refinance your commercial auto loan, you have the opportunity to change your loan term.

Typical Cost to Refinance a Commercial Auto Loan

So, how much does it cost to refinance a car? With commercial auto loan refinance, you may face a number of fees, including:

Prepayment Penalty

Some lenders charge a prepayment penalty for paying off loans early. Check your loan terms to see if you’ll be penalized when you refinance your loan.

Application Fee

In addition, lenders often charge transaction fees, such as processing or application fees for your new loan. Negotiate with your lender to reduce these fees or have them waived entirely.

Title Transfer Fees

When you refinance your car, you may need to pay a title transfer or lien recording fee, depending on your state’s requirements. This fee covers updating the vehicle title to reflect the new lender as the lienholder. It’s usually a small administrative cost — often between $5 and $50.

Refinance a Commercial Auto Loan vs Personal Auto Loan

The procedure to refinance commercial car loan is similar to refinancing a personal auto loan. However, when you apply for refinancing, lenders may want to see information about your business, including your business plan, annual net profit, annual gross sales, outstanding obligations, tax ID, and a recent business tax return.

Alternatives to Refinancing Commercial Auto Loans

If you’re looking for ways to pay off your loan sooner, and you’d rather not refinance your commercial auto loan, there are other options to consider.

Paying Off the Auto Loan in Full

You could repay the entire loan early as an alternative to refinancing. Be sure to look into whether you will owe any prepayment penalties, and if so, whether these penalties will make early repayment too expensive.

Refinance a Commercial Auto Loan to a Personal Auto Loan

Another option is to refinance your business auto loan to a personal auto loan. When refinancing an existing auto loan, in addition to looking at your personal information, including your income, credit score, and credit history, lenders may want to see information about your business, such as annual net profit and gross sales, and outstanding debt obligations.

One of the questions to ask when refinancing a car loan is what documentation and information you need to provide when you apply for the loan.

With refinancing, you may be able to get a lower interest rate or more favorable terms, so explore your options.

Recommended: Calculate APR of Car Loan

The Takeaway

Refinancing a commercial auto loan can be a strategic move to improve your business’s financial flexibility, lower monthly payments, or secure a better interest rate. By understanding your current loan terms, evaluating your financial health, and comparing offers from multiple lenders, you can find a refinancing solution that better suits your business needs.

If you’re seeking auto loan refinancing, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your car in minutes.

FAQ

Can I refinance a commercial auto loan?

Yes, it’s possible to refinance a commercial auto loan. Doing so could be beneficial if you can qualify for a lower interest rate or you need to adjust your loan term.

Why would a business refinance a commercial auto loan?

Businesses refinance to save money on interest, lower monthly payments, or adjust the loan term. It can also be a strategic move to consolidate debt or remove a cosigner from the original loan.

How much does it cost to refinance a commercial auto loan?

The cost of refinancing a commercial auto loan will depend on the fees charged by your lenders. You may owe a prepayment penalty for paying off your old loan, or transaction fees for your new loan. You might also need to pay fees to transfer the car’s title or re-register the vehicle, depending on where you live.

Photo credit: iStock/LPETTET

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOALR-Q225-014

Your cylinder head acts as the roof of your combustion engine, sitting above the cylinders and housing the intake and exhaust valves, spark plugs, and overhead camshafts.

The cylinder head is a critical component of the system, and when it fails, it can cause your engine to stop working properly.

Unfortunately, replacing your cylinder head can cost several thousand dollars. This guide to cylinder head repair cost provides information on how to know your cylinder head is failing, how much it may cost to fix it, and ways to pay for cylinder head replacement.

How Much Does a Cylinder Head Replacement Cost?

How much to replace a cylinder in a car? The cost of replacing a cylinder head will depend on the make and model of your vehicle and the cost of parts and labor. You can expect the average cost to be between $4,100 and $4,900 if you have the job done at an auto shop. If you are adept at fixing cars, you may save yourself some money by doing the job yourself.

What Impacts the Cost to Replace a Cylinder Head?

There are a variety of factors that affect the cost of replacing your cylinder head, including:

Parts Costs

On average, a new cylinder head will cost between $250 and $1,000, but some can cost as much as $6,000. Cost will depend on the brand and type of engine that you have, and whether you buy the part used or new. For rare and high-performance vehicles, the cost of a new cylinder head could run into the thousands of dollars.

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Labor Costs

Unfortunately, replacing a cylinder head isn’t an easy fix and usually requires disassembling your engine. You can expect it to take six to 15 hours for your mechanic to complete the task, which will likely happen throughout at least a couple of days.

Number of Cylinder Heads

If you have an inline engine, you’ll only have one cylinder. Many vehicles have “V” engines, though, which have two cylinder heads. If both of these need to be replaced, the cost of parts and labor will increase.

Repairing Other Impacted Parts

A damaged cylinder head may be the result of other issues inside your engine, such as bad bearings or piston rods. These problems will also need to be addressed when you replace the cylinder head to prevent further damage.

What’s more, a bad cylinder head could cause the engine to overheat. This can cause engine failure and result in needing to replace your engine.

Difference Between a New and Remanufactured Cylinder Head

A remanufactured cylinder head has been rebuilt with parts that are still functioning and serviceable. Every part of the cylinder head will be replaced, and the process can involve recasting, installing new parts, machining, and cleaning. Finally, the remanufactured cylinder head is tested to ensure it can withstand the stress and pressure it will be under once back inside your engine.

Can a Cracked Cylinder Head Be Repaired?

In some cases, a cracked cylinder head can be repaired instead of replaced. This involves welding the cracks, putting the cylinder back together, and stress testing it. This option costs less than remanufactured cylinder heads and replacing the part entirely.

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How Are Cylinder Heads Replaced?

Replacing the cylinder head requires draining the coolant and oil from the engine and removing the intake and exhaust manifolds. If the engine has one or more timing belts or chains, these must be removed, as well. You may need to remove other parts, such as the battery, the alternator, the valves, and the engine cover. With these out of the way, the cylinder head itself can be replaced.

How Long Does a Cylinder Head Replacement Take?

A cylinder head replacement can take up to 15 hours of labor, depending on the vehicle’s make, model, and engine complexity. Factors such as the availability of parts, the condition of surrounding engine components, and whether the head needs machining can extend the time.

For some vehicles, the job may take longer, especially if additional repairs are required once the head is removed. Mechanics often need a full day or more to complete the work accurately and test the engine afterward.

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Signs of a Bad Cylinder Head

To know if your cylinder head is failing, watch out for these signs:

Leaking Oil

Oil leaking from the cylinder could mean that there’s a crack or a failing gasket. If you see white smoke coming from your exhaust, that could be another sign that oil could be leaking through a crack in your cylinder head.

High Engine Temperature

If your cylinder head is cracked or warped, coolant won’t be able to run freely over the part, which could cause your engine to overheat. Overheating can cause further damage to the cylinder head or other parts of your engine.

Poor Engine Performance

A cylinder head that’s warped or cracked won’t allow your engine to combust fuel as efficiently. You may notice an uptick in the amount of fuel you use and a decrease in performance.

Warped or Dented Cylinder Heads

Check your cylinder head for visible signs of cracks, dents, and warping. If you see anything unusual, have your mechanic take a look. They can help you determine the cause of the damage and what needs to be done to rectify the situation.

Can You Replace a Cylinder Head Yourself?

Replacing a cylinder head yourself is possible if you have advanced mechanical skills, the right tools, and a repair manual for your specific vehicle. The process involves disconnecting many engine components, precisely torquing bolts, and ensuring proper alignment and sealing. Mistakes can lead to serious engine damage, so unless you’re highly experienced with engine work, it’s often safer and more cost-effective to have a professional handle the job.

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Can You Drive With a Damaged Cylinder Head?

Driving with a damaged cylinder head is not recommended, as it can lead to severe engine damage and potentially complete engine failure. A cracked or warped cylinder head can cause coolant leaks, oil contamination, loss of compression, and engine overheating. Continuing to drive under these conditions can escalate repair costs significantly and may leave you stranded if the engine fails entirely. If you suspect a cylinder head issue, it’s best to have your vehicle inspected and repaired as soon as possible.

How to Pay for Cylinder Head Replacement

Replacing a cylinder head can be an expensive repair, often costing several thousand dollars, depending on the make and model of your vehicle. Fortunately, there are several ways to cover the cost, whether you’re looking to pay upfront or finance the repair over time.

Cash

If you have savings set aside for car maintenance or emergency expenses, paying in cash can be the simplest and most cost-effective option. You won’t have to worry about interest or loan approvals, and you’ll maintain full ownership of your vehicle without any added debt. This option works best if the repair won’t deplete your savings entirely, leaving you with a financial cushion for other emergencies.

Personal Loan

For those without sufficient savings, a personal loan can offer a quick solution. Many banks, credit unions, and online lenders provide unsecured personal loans with fixed interest rates and monthly payments. If your credit is good, you might qualify for favorable terms. Personal loans give you the flexibility to pay for the repair upfront and then repay it over time, often with terms ranging from 12 to 60 months.

Auto Loan Refinance

If you currently have an auto loan, an auto loan refinance could be a strategic way to free up cash for repairs. Refinancing at a lower interest rate or extending your loan term may reduce your monthly payment, allowing you to redirect the savings toward the cylinder head replacement. Some lenders even offer cash-out auto refinancing, which lets you borrow more than what you owe and use the extra funds for repairs.

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The Takeaway

Your cylinder head is a crucial component of your engine, so it’s important to get it repaired or replaced when it’s damaged. The cost of replacement can be significant, running upward of $3,000.

Ways to pay for a cylinder head replacement include cash savings, taking out a personal loan, or refinancing your vehicle.

If you’re seeking auto loan refinancing, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your car in minutes.

FAQ

Can I replace just one cylinder head?

Yes, you can replace just one cylinder head if only one side is damaged, especially in V-type engines with separate heads for each cylinder bank. However, it’s important to ensure the other head is in good condition to avoid future issues and maintain balanced engine performance.

Can I prevent cylinder head damage?

Yes, you can prevent cylinder head damage by maintaining proper engine cooling, regularly checking coolant levels, avoiding engine overheating, and changing oil on schedule. Promptly addressing warning signs like overheating or loss of coolant can also help. Routine maintenance is key to preventing costly cylinder head issues.

What are the common causes of cylinder head failure?

Common causes of cylinder head failure include engine overheating, poor cooling system maintenance, lack of proper lubrication, and manufacturing defects. Warped or cracked heads can also result from rapid temperature changes, excessive engine stress, or prolonged neglect of warning signs like coolant leaks or engine misfires. Regular maintenance helps prevent failure.

How long does a cylinder head last?

A cylinder head can last over 100,000 miles or the lifetime of the engine with proper care. Its longevity depends on factors like engine maintenance, driving habits, and coolant system health. Regular oil changes and preventing overheating are key to extending the life of a cylinder head and avoiding costly repairs.

Photo credit: iStock/PixelsEffect

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