It can be tough to refinance a car because most lenders will lend something like 110% of the value of the car at the time of purchase (to allow for rolling taxes and fees related to the purchase in to the loan) while refinance lenders will only issue up to something like 80% of the value of the car. Your ability to refinance will depend entirely on how heavy your downpayment was and the rate of depreciation of the car since you bought it. If your car is still upside down (you owe more than it's worth) you'd be out of luck without making a large payment to bring the amount due below the current appraisal value of the car.
Additionally, when you buy a car you might not be as shrewd of a negotiator as the refinance bank will be. When you buy the car, you personally agree to a price. The refinancing bank will use some system like KBB or Edmunds to very unemotionally come to a number it determines to be the fair market value of which it will lend X% against.
To expand on your edits, it's probably worth illustrating how interest is paid in normally amortized loans.
Assuming your loan was for $21,500 at 6% for 72 months and you're 24 months in, you've paid $2,223 in interest so far. Your first interest payment was $107, your 24th interest payment was $77.
Mo Principle Remaining Mon. Interest Mon. Payment
1 $21,500 $107.50 $356.32
12 $18,693 $ 93.46 $356.32
24 $15,451 $ 77.26 $356.32
36 $12,008 $ 60.04 $356.32
48 $ 8,354 $ 41.77 $356.32
60 $ 4,473 $ 22.37 $356.32
72 $ 354 $ 1.77 $356.32
Over time as your principle remaining reduces so does your monthly interest charge. Considering this, in your first 24 months you've paid $2,223 in interest but in the remaining 48 months you'll pay just $1,931 more.
At this point considering say a refinanced interest rate of 3%. You have this decision for the remaining balance on the car of $15,172 (based on my loan above)
Opt: Pmts Remaining Mon. Payment Total Interest Saving from Current
1 Do Nothing 48 $356.32 $1,931.13 $ 0.00
2 Refi 72@3% 72 $230.52 $1,425.33 $ 505.80
3 Refi 60@3% 60 $272.62 $1,186.26 $ 745.87
4 Refi 48@3% 48 $335.82 $ 947.46 $ 983.67
5 Refi 36@3% 36 $441.22 $ 711.92 $1,219.21
- Option 1: Leave Everything alone
- Option 2: Refinance to new 72 months loan at 3%
- Option 3: Refinance to new 60 months loan at 3%
- Option 4: Refinance to new 48 months loan at 3%
- Option 5: Refinance to new 36 months loan at 3%
Just remember that the savings is over the remaining life of the loan and doesn't take in to account any fees your bank may charge for processing the loan. For instance, refinancing to option 3 yields an interest savings of $12.43 per month ($745.87/60). Realistically the new refinance loan durations probably wouldn't all be available at the same interest rate. This is really to illustrate that the bulk of the interest on your current loan has been paid already and you're dealing with relatively much smaller numbers and a refinance charge of even $100 could significantly impact your real interest savings. This also doesn't address that your car will likely be upside down for a time if you entertain another 72 month loan which will hinder your ability to sell or refinance it again.