Critical Shifts:
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Massive Monthly Savings: Drivers who refinanced cut their APR by 4.13 percentage points and saved $162/month on average—double the industry standard.
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Subprime Relief: Credit scores between 580–669 saw the biggest win, slashing rates by 6.18 percentage points.
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EVs & Trucks Lead: EV owners saved the most at $190/month, while coupes and pickup trucks led among vehicle styles ($183+/month).
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84-Month Terms Dominate: Over half (53%) of refinanced loans were 84-month terms as drivers fight rising average balances ($34,378).
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New data from Caribou’s Q2 Auto Refinance Trends Report shows growing interest among Americans to save on their car loan. Customers who refinanced to lower their car payment in Q2 2026 saved an average of $162 a month, twice the industry average reported by Experian. Customers also cut their APR by an average 4.13 percentage points; the most significant rate drop in a year. This comes as monthly car payments for new vehicles reached a record $777 in Q2, according to Edmunds.
Caribou’s Q2 2026 Auto Refinance Trends Report—based on data from April to June 2026 of customers who refinanced to lower their monthly payments—reveals several notable trends shaping the current refinance landscape:
- Subprime borrowers see the deepest rate cuts across credit tiers. This group typically starts with the steepest original rates, and refinancing hands the biggest win to these borrowers who often need relief the most. Customers with credit scores between 580 and 669 slashed their APR by an average of 6.18 percentage points, the largest reduction of any credit tier.
- As 84-month loans become the norm, drivers see extra incentive to refinance—and it’s paying off. Fifty-three percent of customers refinanced 84-month loans in Q2, compared to 52% in Q1 and 51% in Q4 2025, which tracks with the broader shift toward longer loan terms as a way to manage high monthly payments and as more drivers hold on to their cars longer. These borrowers saved an average of $157 a month by refinancing.
- Vehicle styles with higher loan balances see the strongest savings. Coupe and pick-up truck owners posted the strongest monthly savings of any body style in Q2, at $184 and $183 respectively, outperforming SUVs, sedans, hatchbacks, vans, and wagons.
- Bigger price tags and smaller down payments are pushing loan balances to new highs. Car buyers are financing more of their vehicle purchases, and that trend carries straight through to refinancing. The average refinance auto loan balance in Q2 was $34,378, and this figure is expected to stay high as more drivers seek relief on their increasingly large loan balances.
- Amidst high gas prices, the EV advantage extended beyond fuel. EV drivers who refinanced saved an average of $190 a month in Q2 2026, up from $176 a year earlier. EVs delivered greater savings than both gasoline and hybrid vehicles. Refinancing continues to be a meaningful way for EV drivers to lower their car payments after the 2025 expiration of the federal EV tax incentive.
“We estimate that Americans overpay $54 billion on their auto loans every year,” said Simon Goodall, CEO of Caribou. “Our latest data shows more drivers are catching on, and there’s real savings on the table when it comes to auto refinancing. It’s making a difference for drivers across credit profiles and vehicle types, but plenty of people still haven’t checked what rate they’d qualify for today, even if it takes just a few minutes and could save them thousands of dollars a year.”
