The latest State of the Automotive Finance Market Report: Q2 2025 from Experian points to a sharp rise in refinancing activity in the US, underscoring consumer appetite for lower-cost finance as interest rates stabilise.
According to Experian, auto refinance volumes in the US increased nearly 70% year-on-year. Borrowers who refinanced cut their average rate by just over two percentage points, from 10.45% to 8.45%, reducing monthly payments by around $71. By comparison, in Q2 2024 refinancers saved less than one percentage point.
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“Affordability continues to be a topic of conversation in the automotive industry,” said Melinda Zabritski, Experian’s head of automotive financial insights. “With interest rates trending downward, we’re seeing more borrowers taking the opportunity to lower their monthly payments.”
Credit unions leading the US refinancing market
In the US, credit unions dominated refinancing activity in Q2, taking 68.33% of the market, up from 63.22% the previous year. Banks’ share slipped to 21.45%. Consumers refinancing with credit unions saved an average of $87 per month, compared with $46 for those refinancing through banks.
Zabritski stressed that “banks and credit unions remain key players in the auto refinancing space, offering a range of options that may help borrowers secure better terms.”
Shifting US lender landscape
Experian’s figures also highlight structural shifts in the wider US auto finance market. Banks have regained their position as the largest lender overall at 27.5% market share, overtaking captives at 26.63%, with credit unions edging up to 21.04%.
Captives remained dominant in new vehicle finance, albeit down from 60.74% to 52.39%, while banks rose to 25.91% and credit unions to 12.24%. In used car finance, banks extended their lead to 28.59%, with credit unions steady at 27.63% and captives down to 6.40%.
“The shift in lender market share highlights an increasingly competitive landscape,” Zabritski said. “With banks showing a renewed focus in automotive combined with new OEM relationships, we’re seeing a completely different environment.”
US market indicators (Q2 2025)
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Average loan amounts rose to $41,983 (new) and $26,795 (used).
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Average monthly payments climbed to $749 (new) and $529 (used).
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EV share of new sales slipped to 8.34% from 8.76%.
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Delinquencies edged up: 30-day at 2.27%, 60-day at 0.83%.
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New leasing fell to 23.62%, from 26.12% last year.
“US refinance boom highlights shifting dynamics in car finance” was originally created and published by Motor Finance Online, a GlobalData owned brand.
