All four generations fare well when it comes to refinancing their auto loans — the average savings per age group was over $900 per year. Gen X borrowers save the most with an average refinance savings of $1,001 per year while Baby Boomers save the least, $879.
Other report findings include:
Gen Z
- Saves an average of $77 per month and $904 per year after refinancing their car loan.
- Saves the most as a percentage, decreasing their monthly car loan payment by 18%.
- Has the lowest debt-to-income ratio of all four generations at just under 29% — likely because Gen Z hasn’t started to assume debt from mortgages or student loans.
Millennials
- Save an average of $85 per month and $994 per year after refinancing, just behind Gen X.
- Have the highest debt-to-income ratio: 30.5% on average. This is because in their late twenties and thirties, Millennials are still climbing toward their peak earning years.
- Reduce interest rate by 5 points, on average, by refinancing.
Gen X
- Saves the most when refinancing their car loans: $86 per month and $1,001 per year.
- Have cars with the highest retail and trade value at $23,501 and $20,632, respectively.
- Have the largest loan amounts for their vehicle — an average of $27,239 among approved borrowers. Not surprisingly, they have the largest payments at close to $504 a month.
Baby Boomers
- Save an average of $77 per month and $879 per year after refinancing.
- Have the lowest interest rate on their loans at 8.9%, prior to refinancing, a reflection of their good credit and long history.
- Have the most time left to pay on their car loans — nearly 46 months — at the time of refinancing.
The study notes that “when you multiply these savings across the remaining term of the borrower’s loan, you can see the compounding results of loan refinancing. That $80-90 per month saved on car loans translates into thousands of dollars that borrowers can redirect toward paying down other debts like student loans or credit cards or toward other financial goals like building an emergency fund or saving for a down payment.”
Chris Speltz, CEO of RateGenius, said the company has more studies that it will share in the coming months. “Such studies are tremendously valuable to our customers and the company,” said Speltz. “They help us to better inform consumers of auto refinancing benefits and refine our services and solutions to meet the needs of our customers.”
About RateGenius
RateGenius is a technology company, which has created a proprietary, web-based platform that has assisted hundreds of thousands of consumers nationwide in refinancing auto loans to more favorable terms. By utilizing its network of more than 150 lenders, RateGenius has successfully facilitated more than 375,000 loans worth more than $8 billion. The company’s proprietary LOS (loan origination system), educational content, and customer-experience-focused business approach have been instrumental in its success. RateGenius’ online application is quick, simple, and available from the comfort of your home at apply.rategenius.com.
SOURCE RateGenius
