Car refinance customers save an average of $97 per month. These savings reached an all-time high rate in 2021. They saved $1,158 on average per year, which is 16% higher than the previous year. About 56% of the borrowers made savings of between $50 and $149 on their auto loans per month.
Moreover, the number of borrowers who make savings of more than $100 each month has been steadily increasing since 2018. Last year, more than 41% of borrowers were among those who made savings of more than $100. And about 19% of borrowers got to enjoy payment reductions by $150 or more.
So how did these borrowers save more than the previous years, and how can you make savings on your auto loan? Read on to find out!
How Did Borrowers’ Savings Reach an All-Time High?
There are three main reasons why borrowers made exponential savings on their auto loans in 2021:
1. Improved Loan-to-Value Ratios
The average retail LTV in 2021 was the lowest since 2013, at 93.1%. This was due to an increase in the values of used cars. It was also possibly due to more people borrowing auto loans and refinancing those that hold a better value.
2. Increased Pre-Refinance Rates
The average interest rate in 2021 was 13.9% before refinancing, which was 3.1% higher than that in 2020. This rate was reduced by 7.1% after refinancing.
3. Costlier Refinanced Vehicles
Another reason behind record-high savings was because there was an increase in the number of expensive cars being refinanced. Trucks and SUVs made up more than half of the refinanced loans.
So What Are You Waiting for?
With the current market conditions, you are bound to make more savings on your auto loan refinance than ever. You can save anywhere from $50 all the way up to $149 on your auto loan. Refinancing your auto loan is the perfect opportunity to get lower interest rates and make savings on your auto loan.
If your credit score has improved in the recent past or if the interest rates in your country have gone down ever since you took out the original loan, you should definitely get your auto loan refinanced. Get in touch with a number of local banks and get their rates to find the best deal. Remember, if they do it right, car refinance customers save an average of $97 per month. You can do the same. Good luck!