More consumers are refinancing their auto loans, with the number of borrowers choosing the option nearly doubling in the first quarter of 2026 compared with two years ago.
The details: In Q1, about 111,000 vehicle owners refinanced their auto loans as refinancing rates fell below those for new vehicle purchases after lenders lowered rates following the Federal Reserve's interest-rate cuts in 2024, according to The Wall Street Journal.
Refinancing reduced borrowers' interest rates by an average of 2.24 percentage points in Q1, compared with just 0.47 percentage points two years earlier.
Consumers with higher monthly payments lowered their costs by an average of $81 per month through refinancing.
What they’re saying: “Being able to refi and save almost $100, that’s pretty considerable,” said Melinda Zabritski, head of automotive financial insights at Experian, per WSJ.
Why it matters: The growing appeal of auto refinancing highlights the financial strain many consumers continue to face while demonstrating that lower borrowing costs can meaningfully improve affordability. For dealers, it reinforces the importance of offering financing solutions that help customers manage long-term ownership costs.
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Between the lines: Falling refinancing rates come as consumers grapple with rising costs in other areas of life, prompting lenders to expand refinancing options for borrowers struggling with monthly payments.
JPMorgan Chase relaunched its consumer auto-refinancing program in May 2025 after discontinuing it in 2020.
Michael Douglas, who heads dealer services at Chase Auto, said the bank recognized it could offer rates below the average existing auto loan of about 10%, according to WSJ.
Many consumers are only now discovering auto refinancing through credit apps, as refinancing has traditionally been associated more with mortgages than vehicle loans.
Bottom line: As refinancing becomes more accessible, dealers have an opportunity to strengthen customer relationships by educating buyers about financing options that improve affordability and long-term ownership costs, even after the initial vehicle purchase.
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