Borrowers Saved $1,158 on Average in 2021 By Refinancing Auto Loans, Finds RateGenius' State of Auto Refinance Report
Report reveals auto refinancing proved to be a powerful financial tool in 2021, saving vehicle owners 16% more than in 2020 and provides insights for those looking to refinance in 2022.
Feb 01, 2022, 09:00 ET
AUSTIN, Texas, Feb. 1, 2022 /PRNewswire/ -- RateGenius, an auto financing and refinancing platform, today released its second annual report, the State of Auto Refinance: 2022 Report. The findings reveal the average borrower saved $1,158 annually, cut their interest rates in half and had a bigger savings impact on consumers with average to lower credit scores. RateGenius' data and takeaways suggest that auto refinancing is a powerful tool for reducing monthly expenses and achieving long-term financial goals.
This year, the State of Auto Refinance report relies on anonymous data of applicants who completed the refinancing process from RateGenius and AUTOPAY, which merged in 2021 under the umbrella of The Savings Group. Several findings stand out:
Significant savings were the norm in 2021
In 2021, customers saved an average of $1,158 per year after refinancing their auto loans. This is a 16% increase compared to 2020 and the highest amount since records began in 2013. The savings didn't stop there:
- One in five (19%) borrowers who refinanced reduced their annual payment by $1,800 or more.
- Over half of all borrowers (56%) saved between $50 and $149 on their monthly car loan payments.
- On average, borrowers who refinanced cut their interest rate in half.
Higher credit scores don't guarantee higher savings
Borrowers with the highest credit scores saved the least amount after refinancing, contrary to popular belief. A variety of factors, such as credit score movement, interest rates and loan balances, all help lenders determine savings. The report found:
- Borrowers with scores between 601 and 660 (nonprime) saved $99 per month after refinancing, only one dollar less than people with scores between 661 to 780 (prime), who saved $100.
- Borrowers with credit scores between 501 and 600 (subprime) saved $91 per month on average, more than borrowers with scores between 781 and 850 (super-prime), who saved $85.
Tesla owners save the most, but pay the most each month
The electric vehicle brand continues to make waves not only in clean technology, but also in refinancing. Those who refinanced their Tesla payments were found to reap the most fiscal benefits compared to other manufacturers:
- Tesla owners who refinanced saved $153 per month on average, the most savings of any brand.
- Even so, Tesla owners have the highest monthly payment before and after refinancing ($873 v. $720) followed by Audi owners ($743 v. $641).
Pickup truck owners stay on top
Just like in 2020, truck drivers saved the most compared to other vehicle models when auto refinancing due to high initial cost and low depreciation over time:
- Owners of pickup trucks and SUVs saved $131 per month and $113 per month, respectively, the most of any vehicle class. Owners of minivans and station wagons saw the least savings at $75.
"With automobiles holding their value and interest rates low, auto refinancing has become a very effective tool for reducing monthly expenses and achieving long-term financial goals," said Jeff Hutcheson, co-CEO of RateGenius. "The takeaway is that people should think of auto refinancing alongside home refinancing and credit card consolidation when strategizing how to pay down debt, save money and plan for the future."
RateGenius is a technology company which has created a proprietary, web-based platform that has assisted hundreds of thousands of consumers nationwide in refinancing auto loans to more favorable terms. By utilizing its network of more than 150 lenders, RateGenius has successfully facilitated more than 375,000 loans worth more than $8 billion. The company's proprietary LOS (loan origination system), educational content, and customer-experience-focused business approach have been instrumental in its success. RateGenius' online application is quick, simple and available from the comfort of your home at apply.rategenius.com.
AUTOPAY offers a mobile-friendly auto loan finance platform that utilizes API plugins and easily embeddable white-label user experiences to deliver consumers from online sources, direct marketing campaigns, channel partners, and proprietary distribution channels. Our solution is a full-service technology and service platform providing finance solutions from pre-qualification to title perfection to loan servicing. Learn more at autopay.com.
About The Savings Group
The Savings Group, parent company of RateGenius and AUTOPAY, is the most diversified consumer marketplace for automotive finance, refinance and protection plans. Through a network of more than 180 lenders across all 50 states, The Savings Group provides consumers with even more choices for their origination and refinanced auto loans, while also delivering loan volume growth to its lender network and partners through a proprietary, web-based platform. The combined company facilitated over $2 billion in automobile financing transactions in 2021, with more than 550 employees between its Austin and Denver office hubs.
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