ILending Industry Insights – State of Auto/Car Loan Refinance

16 August 2022

iLending, a national leader in automotive refinancing, is pleased to announce our inaugural report on the State of the Car Loan Refinance Industry.  This new offering will be published quarterly and will be based on our internal data coupled with industry and consumer information.  The intent of the publication is to provide meaningful insight for those interested in the auto loan refinance market, as well as for consumers that may be considering refinancing their existing auto. 

The first auto loan was originated in 1919, and much has changed related to automotive financing in the past 102 years.  According to a 2022 Experian report focused on Q1 automotive financing: the average new car loan amount was $39,540, the average new car payment was $648 per month, and the average new car loan term was approximately 70 months (almost six years).

While these are purely averages, a recent story in the Wall Street Journal reported that nearly 13% of new car buyers take on a monthly payment of at least $1,000.  That is nearly double from just a year ago when approximately 7% of new auto loans had payments that large.  Additionally, many of these loans carry extended terms, often upwards of seven years! For many people, these long-term payments can be crippling.

Rising interest rates have also been in the news in 2022.  However, those increases have little effect on an auto loan refinance compared to a home mortgage.   Car loans are much shorter-term loans, typically 5-7 years versus 30 years. In addition, the total amount paid on car loans is much lower than on a home mortgage since cars cost significantly less than a home. Therefore, the additional interest accrued over the life of your refinanced car loan will be much less than the additional interest incurred on a mortgage.

Average retail used car prices ended 2021 at record highs and those high values continue into 2022.  This increase drives an improved Loan to Value ratio (LTV) for many consumers, increasing not only the odds of being approved for a refinance, but also improving the potential for a new lower interest rate.  Per the Manheim Used Vehicle Value Index call earlier this year, Cox Automotive reported average used car prices skyrocketed over the past six to twelve months and ended 2021 at a record high.

Add in inflation, chip shortages, lower than average inventory of used cars, and rising gas prices, and there is clearly a lot to digest when looking at auto loan refinancing. 

“Because iLending has been in the auto refinance industry for more than a decade, we offer a unique perspective during these times of great change and turmoil in the financial sector,” said iLending’s CEO, Tom Holgate. “In times of great change there is also great opportunity for savvy consumers to save money and improve their financial standing – we look forward to helping thousands more do that in 2022 and beyond.”

To that end, iLending has identified several key aspects to consider whether evaluating the health of the market or debating if now is a good time to refinance an auto loan.

Interest Rates

Even with the most recent 75 basis point increase, iLending’s ability to refinance car loans remains strong.  On average, iLending can secure a new auto loan that is more than 7% less than a consumer’s current rate. 

Lender Capacity & Appetite

The number of lenders that are looking to add auto loans to their balance sheet remains strong.  While there have been several lenders cutting back on financing auto purchases, that is not the case for lenders in the auto refinance space.

New Car Prices

As mentioned above new car prices are at all time highs and given the difficulty created by the shortage in computer chips and labor, there is no sign that this will be easing any time soon.  Some manufacturers are delivering cars to dealers with discounts due to missing chips (and missing functionality), and some dealers are charging prices well above MSRP.  All things considered, given the state of new car availability, refinancing an existing car loan may be a savvy move.

Used Car Prices

According to the Manheim Used Car Index, prices on used cars remain significantly elevated.  In some instances, used cars can cost more than a new model, even with a similar or better trim level.  Given the already low inventory and the increasing costs of new cars, it is likely the inflated values of used cars will persist for the foreseeable future. 


Consumers continue to spend more but are getting far less for their money.  With inflation sitting at 40-year highs, the ability to put food on the table is more challenging than it has been in decades.  The gap caused by inflation between what consumers spend and what they get for those dollars has increased over the past few months.


Based on the factors above, iLending believes the opportunity for consumers to qualify for and save money by refinancing their existing auto loans is: Healthy & Strong.

Additionally, the ability to save an average of $145/month is needed now more than ever due to rising costs of housing, groceries, fuel, and household goods.  Despite the rising rate environment, iLending remains able to help Americans save money on their monthly payment and increase their cash flow at a critical time.  Solely focused on car loan refinance, iLending has the easiest, quickest, and safest process available.

About iLending

iLending has helped nearly 125,000 families save more than $190 million in payments on their vehicles to date. In addition, iLending averages over 7% in interest rate reduction for their clients, saving millions of dollars in unnecessary interest charges.

Founded in 2006, iLending is the national leader in car refinancing, saving consumers an average of $145 per month in car payments. Through a best-in-class process and strategic partnerships with lenders nationwide, iLending offers terms that consumers cannot find on their own. iLending exists to empower better financial lives by reducing burdens and improving peace of mind. We are a BBB Accredited Business and maintain an A+ rating.