The downsides to auto loan refinancing can include paying lender fees and additional interest if you extend the loan term or cash out auto equity. You could also end up owing more than your car is worth.
Does refinancing hurt your credit?
Whenever you refinance a loan, your credit score will decline temporarily, not only because of the hard inquiry on your credit report, but also because you are taking on a new loan and haven't yet proven your ability to repay it.
Does refinancing a car mean starting over?
Refinancing does start your auto loan over. When you refinance a car loan, you choose a new loan that has a different rate and possibly a different term. The new loan replaces your current loan. Refinance terms offered by lenders most commonly are from two to seven years.