Do you drive one of the most popular vehicles for auto loan refinancing?
2021 was quite the year…for auto loan refinancing. Because that’s what you expected us to say, right?
While the COVID-19 pandemic continued to complicate life and personal finances everywhere, many borrowers took advantage of historically low interest rates and refinanced their auto loans. In many cases, people were able to cut their rates in half. According to the 2022 RateGenius State of Auto Refinance report, borrowers reduce their interest rates by 7% on average when they refinanced.
Since you’re here, chances are you’re curious about auto loan refinancing — and you may want to join the savings bandwagon. So, before we dive into the top 10 most refinanced vehicles in 2021, let’s make sure everyone understands the auto loan refinancing process.
Auto loan refinancing is not as technical or complicated as it might sound. Essentially, it’s the process of replacing your current car loan with a new one. Why go through the lending process all over again? Ideally, your new loan would come with better terms, like a lower interest rate and monthly payment.
For instance, maybe market rates have gone down since you bought your car. Or perhaps you didn’t have the best credit when you first applied. If you’ve improved your credit score or even gotten a raise, you might qualify for some serious savings. Last year, roughly one in five borrowers who refinanced managed to cut their monthly payments by more than $150.
Your actual savings depend on various factors, as well as external forces like lending market competition and the health of the economy (both locally and nationally). But contrary to popular belief, you don’t need a spotless credit profile to qualify for this level of savings.
When people think about qualifying for a loan, their minds typically jump to their credit scores. While this is an important factor, it’s not the only factor. Here’s what you can expect lenders to consider when you apply for auto loan refinancing:
Your vehicle (e.g., condition, mileage, age, etc.)
Your existing loan balance
Your location
With so many factors at play, there’s no hard-set rule for qualifying. To give you an idea though, the average credit score of borrowers who refinanced last year was 670. Moreover, the average LTV was 93.1%, and lenders typically prefer applicants with DTIs below 50%. Last but not least, the newer your car the better your odds (usually).
What Were the Top 10 Most Refinanced Vehicles in 2021?
Similar to 2020, there was an obvious trend in terms of what vehicle class saved the most money by refinancing last year: pickup trucks.
And it wasn’t particularly close. Refinancing helped truck owners save $131 per month on average. Meanwhile, SUVs finished the year in second place with average monthly savings of $113. Coupes and sports cars came in third (averaging $103 per month).
Now, without further adieu, let’s get to the list.
10. Toyota Camry
Average annual savings: $1,032
MSRP: $25,395 for the 2022 base model
Models sold in 2021: 313,795
Trivia question: Which do you think has more standard horsepower — the Toyota Camry LE or the Audi A4?
Answer: You may be surprised to hear the base Camry just edges out the base A4 by a couple of HP (203 to 201).
9. Chevrolet Equinox
Average annual savings: $1,308
MSRP: $25,800 for the 2022 base model
Models sold in 2021: 165,325
Trivia question: In what year did Chevrolet sell the most Equinoxes in the US? Hint: It wasn’t this decade.
Answer: 2019, when Chevy managed to sell 346,049 units.
8. Jeep Cherokee
Average annual savings: $1,116
MSRP: $28,135 for the 2021 base model
Models sold in 2021: 89,126
Trivia question: The Jeep Cherokee was the first winner of what award in 1974?
Answer: In its first year of production, the Jeep Cherokee became the inaugural winner of Four Wheeler magazine’s Achievement Award (which is now known as the Four Wheeler of the Year award).
7. Honda Accord
Average annual savings: $900
MSRP: $26,120 for the 2022 base model
Models sold in 2021: 202,676
Trivia question: What was the MSRP of the inaugural 1976 Honda Accord?
Answer: Prices aren’t what they used to be (thanks, inflation). The first ever Honda Accord went for $3,995
6. Nissan Rogue
Average annual savings: $1,560 (the highest on this list, by the way)
MSRP: $26,700 for the 2022 base model
Models sold in 2021: 285,601
Trivia question: What percentage of Nissan’s total model sales does the Rogue account for?
Answer: In 2021, Nissan sold 919,090 model units — Rogues represented almost a third (more than 31%) of that figure.
Trivia question: What’s the towing capacity of a 2022 Dodge Ram 1500?
Answer: The newest Ram 1500 has a max towing capacity of 12,750 —which is roughly four and a half Honda Civics!
Not in the Top 10? You Can Still Save
If your vehicle made the 2021 Top 10 Most Refinanced Vehicles list, congrats! You may be chomping at the bit to see if you can secure savings. However, if your vehicle didn’t make the cut — don’t fret. Borrowers saved $1,156 per year on average by refinancing last year, regardless of vehicle model.
Considering the Federal Reserve has contemplated three or four interest rate hikes this year, now wouldn’t be a bad time to apply. Going forward, it’s reasonable to expect auto loan rates to rise in conjunction with the Fed’s rate movements.
Carter Kilmann is a personal finance writer and editor for hire, covering topics like credit cards, mortgages, budgeting, banking, and investing. He's written for The Points Guy, Investing.com, Thrive Global, Day to Day Finance, Money Mini Blog, and more.
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