Scope of this break-even tool
The calculator subtracts the quoted new monthly payment from the current payment and asks how long those monthly cash-flow savings take to recover entered refinance costs. It also shows the net cash-flow difference over the period you expect to keep the new loan.
It does not compare total interest, loan balances, payoff dates, term extensions, optional products, or prepayment costs. A lower payment can result from a longer term and still increase total borrowing cost.
Break-even method
Monthly cash-flow savings equal current payment minus new payment. When refinance costs are positive, break-even months equal costs divided by monthly savings and are rounded up to the first whole month that recovers the cost. When costs are zero and the new payment is lower, break-even is immediate.
The new payment must be lower for this particular cash-flow calculation. Equal or higher payments require a broader total-cost comparison instead of a fictional zero-month break-even.
Loaded example
With $500 in refinance costs, a $650 current payment, a $560 quoted payment, and a 48-month planning period, monthly cash-flow savings are $90. Break-even occurs during month six, and the entered-period net cash-flow difference is $3,820.
Decision checks beyond payment
Obtain the current payoff amount and compare it with the new amount financed. Review the new annual interest rate, APR, finance charge, term, total of payments, fees, payment timing, and any prepayment penalty. Confirm that the quote remains valid on the date used.
Treat the result as one cash-flow row in that comparison, not as a recommendation to refinance.
Consumer guidance
The CFPB's guidance on comparing auto-loan offers beyond monthly payment and the auto-loan disclosure identifies information needed for a fuller comparison.
Use Auto Loan Payoff to model the current balance separately.