New TransUnion Analysis Finds 18 Million Auto Loan Borrowers Could Save Substantial Money by Refinancing Their Loans
CHICAGO, July 31, 2025 (GLOBE NEWSWIRE) -- As inflation remains persistent and interest rates stay elevated, many consumers continue to face pressure on their household budgets—prompting a growing search for ways to improve monthly cash flow. New research from TransUnion (NYSE:TRU) reveals that auto loan refinancing may offer a meaningful path to savings for millions of consumers, while also presenting a valuable opportunity for lenders.
Of the nearly 80 million open auto loans in the U.S., approximately 18 million are considered "in-the-money" for refinancing. This term refers to borrowers whose current loan rates exceed the prevailing average APR, making them strong candidates to benefit financially from a refinance.
TransUnion's analysis found that while rising interest rates have reduced the average monthly savings from auto loan refinancing—from $1071 in 2021 to $90 in 2024—these savings remain meaningful for many consumers. More than half of consumers surveyed indicated they would be motivated to refinance if they could save between $50 and $149 per month.
"At a time when we are still feeling the effects of inflation on budgets and spending, consumers are exploring every opportunity to save money," said Jason Laky, executive vice president and head of financial services at TransUnion. "Refinancing an auto loan can reduce monthly payments substantially and bring much needed financial relief to millions of Americans."
The number of consumers who are "in-the-money" for an auto loan refinance is poised to grow substantially if the Federal Reserve lowers interest rates. Currently, approximately 18 million consumers meet the criteria and can lower their APR. However, even a modest 25-basis point rate cut would increase that number to nearly 20 million. A whole percentage point (100 basis points) reduction could expand the pool by an additional 6.5 million borrowers.
More than half of the 18 million consumers "in-the-money" for a refinance have an estimated APR of greater than 10% on their existing auto loan
| Estimated APR on outstanding auto loan | < 7.0% | 7.0-7.99% | 8.0-8.99% | 9.0-9.99% | 10.0-13.99% | 14.0-19.99% | >=20.0% | |||||||
| Percent of consumers | 7 | % | 15 | % | 16 | % | 10 | % | 17 | % | 20 | % | 15 | % |
Source: TransUnion U.S. Consumer Credit Database
Refinanced Auto Loans Continue to Outperform Purchase Loans Across Credit Tiers
A consistent trend has emerged: auto refinance loans are demonstrating stronger performance compared to original purchase loans originated during the same period. This pattern holds true across all credit tiers, with particularly notable results among near prime borrowers.
An analysis of Q4 2023 vintage loans reveals that consumers who refinanced their auto loans were significantly less likely to be 60 or more days past due (DPD) at the 12-month mark—by a margin of 170 basis points. The performance gap was even more pronounced within the near prime segment, where refinance borrowers outperformed purchase loan borrowers by 320 basis points.
"Many auto loan borrowers may not realize that refinancing is an option," said Satyan Merchant, senior vice president and auto and mortgage business leader at TransUnion. "As a result, those who do refinance tend to be more financially savvy and proactive about managing their credit. At a time when other segments of the auto loan market are facing performance challenges, lenders should consider targeting qualified borrowers for refinance opportunities, which have historically shown stronger repayment behavior."
In addition to using traditional credit for prescreening purposes, lenders should employ tools to ensure that offers are made in accordance with their current underwriting strategies. For example, leveraging TransUnion TruVision LTV prescreens as part of the prescreen process would help find consumers who are in a specific equity position for a refinance offer. TruAudience Consumer Insights can help refine marketing content for prescreen campaigns or identify new audiences and channels for invitation-to-apply campaigns.
1 Adjusted for inflation to 2024 dollars.
About TransUnion (NYSE:TRU)
TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world. http://www.transunion.com/business
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