Auto Refi Savings Surge

Consumers saved an average of $162 a month in the second quarter when refinancing their auto loans, according to a new report.

The latest data from auto loan refinancing provider Caribou indicates the average refinance loan amount reached $34,378, and it expects refinancing to stay elevated as consumers seek relief from high prices.

Those with longer loan terms had the highest monthly payment savings. Eighty-four-month loan terms averaged $183 a month in savings, 72-month loans $157 and 60-month loans $141.

Credit scores were another determining factor, subprime borrowers seeing the deepest rate cuts, slashing their annual percentage rates by an average of 6%. Despite the lower rates, their monthly savings varied more than other credit tiers.

“We estimate that Americans overpay $54 billion on their auto loans every year,” said Caribou CEO Simon Goodall CEO.

“Our latest data shows more drivers are catching on, and there’s real savings on the table when it comes to auto refinancing. It’s making a difference for drivers across credit profiles and vehicle types.”

Vehicles with typically higher loan balances saw the strongest savings, coupe and pickup truck debtors saving $184 and $183, respectively.

Savings varied by powertrain, diesel borrowers saving the most at $233 a month, driven by higher loan balances. Electric-vehicle owners saved an average of $190 a month, up from $176 a year earlier. According to Caribou, refinancing continues to be a “meaningful way for EV drivers to lower their car payments.”