Automotive Refinancing Grows Nearly 70% From a Year Ago, According to a New Report From Experian Automotive

August 28, 2025 at 09:30 AM EDT

Consumers saved just over 2% on their interest rates after refinancing their vehicle in Q2 2025

With interest rates leveling out, consumers are looking for ways to secure more favorable vehicle financing terms. According to Experian’s (LSE: EXPN) State of the Automotive Finance Market Report: Q2 2025, the volume of automotive refinances increased nearly 70% from a year ago.

A closer analysis revealed consumers saved just over 2% on their interest rates after refinancing their vehicle in Q2 2025, with the average interest rate dropping from 10.45% to 8.45%. This reduced the average monthly payment by $71 for borrowers who refinanced during the quarter. By comparison, consumers saved an average of 0.93% in Q2 2024, with average rates decreasing from 10.54% to 9.60% after refinancing.

“Although affordability continues to be a topic of conversation in the automotive industry, with interest rates trending downward, we’re seeing more borrowers taking the opportunity to lower their monthly payments,” said Melinda Zabritski, Experian’s head of automotive financial insights. “Banks and credit unions remain key players in the auto refinancing space, offering a range of options that may help borrowers secure better terms.”

In Q2 2025, credit unions made up the overwhelming majority of automotive refinancing, increasing their share of the market from 63.22% in Q2 2024 to 68.33%. Meanwhile, banks comprised 21.45%, down from 22.71% last year. Additionally, the average monthly payment after refinancing with a credit union dropped $87, while those who refinanced with banks saved $46.

Shifts in market share reflect evolving lender behavior

Banks continue to make headway in market share, returning as the largest lender for total automotive financing at 27.50% in Q2 2025, up from 24.50% the previous year. Captives fell behind at 26.63%, down from 30.17% and credit unions grew slightly from 20.35% to 21.04% over the same period.

While banks maintained the lion’s share of total vehicle financing, captives remained the top lender in market share for new vehicle financing at 52.39% in Q2 2025, though down from 60.74% last year. Banks increased from 21.12% to 25.91% and credit unions went from 9.99% to 12.24% during the same period.

Notably, banks narrowly extended their lead in market share for used vehicle financing, coming in at 28.59% this quarter, up from 26.80% last year. Credit unions saw a slight uptick from 27.59% to 27.63% and captives declined from 7.83% to 6.40%.

“The shift in lender market share highlights an increasingly competitive landscape for automotive financing,” Zabritski continued. “With banks showing a renewed focus in automotive combined with new OEM relationships, we’re seeing a completely different environment. In an ever-evolving industry, leveraging the most current data can help automotive professionals identify emerging patterns and adapt to changing dynamics.”

Additional findings for Q2 2025:

The average loan amount for a new vehicle increased $1,017 to $41,983 in Q2 2025, and the average loan amount for a used vehicle increased $481 to $26,795 over the same period.
The average monthly payment for a new vehicle increased from $735 to $749 year-over-year, while the average monthly payment for a used vehicle went from $527 to $529.
The electric vehicle share of new vehicle purchases declined from 8.76% last year to 8.34% this quarter.
Thirty-day delinquencies rose to 2.27% in Q2 2025, from 2.24% in Q2 2024, while 60-day delinquencies increased from 0.78% to 0.83% over the same time frame.
New leasing declined to 23.62% this quarter, from 26.12% last year.

To learn more, watch the entire State of the Automotive Finance Market Report: Q2 2025 presentation on demand.

About Experian

Experian is a global data and technology company, powering opportunities for people and businesses around the world. We help to redefine lending practices, uncover and prevent fraud, simplify healthcare, deliver digital marketing solutions, and gain deeper insights into the automotive market, all using our unique combination of data, analytics and software. We also assist millions of people to realize their financial goals and help them to save time and money.

We operate across a range of markets, from financial services to healthcare, automotive, agrifinance, insurance, and many more industry segments.

We invest in talented people and new advanced technologies to unlock the power of data and innovate. As a FTSE 100 Index company listed on the London Stock Exchange (EXPN), we have a team of 25,200 people across 32 countries. Our corporate headquarters are in Dublin, Ireland. Learn more at experianplc.com.