Auto Loan Refinancing Could Save Millions of Borrowers Substantial Money

According to a TransUnion analysis, nearly 18 million auto loan borrowers can save substantially by refinancing their loans, with the potential for savings ranging from $50 to $149 per month. This number is expected to increase if the Federal Reserve lowers interest rates. The study found that more than half of the "in-the-money" borrowers have an estimated APR of greater than 10% on their existing auto loan. Refinancing auto loans has also been shown to outperform purchase loans across all credit tiers.

According to a recent analysis by TransUnion, nearly 18 million auto loan borrowers in the U.S. could save substantially by refinancing their loans. The study found that these "in-the-money" borrowers currently have rates above prevailing market APRs, with over half having estimated APRs exceeding 10% [1].

While the average monthly savings from auto refinancing decreased from $107 in 2021 to $90 in 2024, the potential for savings remains significant for many consumers. More than half of the 18 million refinance-ready borrowers have current APRs exceeding 10%, representing a low-hanging fruit for lenders [1].

The Federal Reserve's recent decision to hold interest rates steady may impact the number of eligible borrowers. Even a modest 25-basis point rate cut could add nearly 2 million additional borrowers to the refinance-eligible pool, while a full percentage point drop could expand the pool by an additional 6.5 million borrowers [1].

Refinanced auto loans have consistently outperformed original purchase loans across all credit tiers. At the 12-month mark, refinance borrowers demonstrated 170 basis points lower delinquency rates, with near-prime borrowers showing a 320 basis points advantage [1].

TransUnion's analysis highlights a substantial opportunity for lenders in the auto loan market, while also offering meaningful financial relief to consumers struggling with elevated inflation. The study underscores the potential of auto loan refinancing as a pathway to savings and improved financial performance.

References:
[1] https://www.stocktitan.net/news/TRU/new-trans-union-analysis-finds-18-million-auto-loan-borrowers-could-fqlj1xrf63f6.html
[2] https://www.cnbc.com/2025/07/30/fed-holds-interest-rates-steady-what-that-means-for-your-money.html