Car refinancing boom showcases evolving trends in automotive loan restructuring within the US market
In the second quarter of 2025, the automotive finance market witnessed several notable shifts. According to the State of the Automotive Finance Market Report: Q2 2025 from Experian, the market experienced a 70% year-on-year increase in auto refinance volumes in the United States.
One of the most significant changes was the rise in credit unions' market share. They now account for 68.33% of the US refinancing market, up from 63.22% the previous year. Banks, on the other hand, have regained their position as the largest overall lender in the US auto finance market, with a market share of 27.5%. Captives, however, have seen a decrease in their market share, falling to 26.63%.
In terms of new vehicle finance, banks have risen to 25.91% market share, while captives have dropped to 52.39%. Consumers refinancing with credit unions saved an average of $87 per month, compared with $46 for those refinancing through banks.
The average loan amounts for new vehicles in Q2 2025 were $41,983, while for used vehicles they were $26,795. Interestingly, the rate of new leasing fell to 23.62% in Q2 2025, down from 26.12% the previous year. This decrease could be attributed to more borrowers taking advantage of lower interest rates to lower their monthly payments.
Borrowers who refinanced in Q2 2025 reduced their average rate by approximately 2 percentage points, from 10.45% to 8.45%. This move resulted in significant savings for refinancers, with those in Q2 2025 saving around $71 per month compared to Q2 2024, where the savings were less than one percentage point.
The share of electric vehicles (EV) in new sales dropped to 8.34% in Q2 2025. The major OEMs with a significant share in the US auto loan market in Q2 2025 included General Motors, Ford, and Stellantis. General Motors increased its market share compared to previous years, while Ford and Stellantis maintained relatively stable positions.
Banks have shown a renewed focus in the automotive industry, leading to new OEM relationships. Melinda Zabritski, Experian's head of automotive financial insights, stated that affordability is a significant topic in the automotive industry.
In used car finance, banks have extended their lead to 28.59%, with credit unions remaining steady at 27.63% and captives decreasing to 6.40%. Delinquencies for 30-day and 60-day periods in Q2 2025 were 2.27% and 0.83% respectively, indicating a stable market.
These findings offer valuable insights into the current state of the automotive finance market and provide a basis for future predictions and strategies.
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