AUSTIN, Texas, June 22, 2021 (GLOBE NEWSWIRE) -- RateGenius, one of the largest providers of auto refinance loans in America with more than 150 lender partners nationwide, today released a new report examining the impact of increasing used car prices on approvals for auto loan refinancing within RateGenius’ customer base. The report concluded that approval odds for borrowers across the U.S. are more favorable today than they’ve ever been – a 66% increase since May 2020 – making a strong case for consumers to secure a refinance loan while circumstances are in their favor.
“Consumers should take advantage of this market sooner rather than later and refinance their auto loan while conditions are still so favorable,” said Christopher Speltz, CEO of RateGenius. “It’s difficult to predict how long the current semiconductor chip shortage and low new vehicle supply will last, so we encourage consumers to maximize this opportunity to refinance and optimize savings on their auto loan.”
RateGenius attributes the increase in refinance loan approval odds to soaring used car prices, which is caused by a combination of:
- The Semiconductor Chip Shortage: As a result of the COVID-19 pandemic, automakers canceled semiconductor microchip orders not anticipating new car demand, but the opposite scenario has played out leaving a major shortage of microchips, in particular with American companies Ford and General Motors.
- Used Car Inventory is Low: With fewer new cars available for purchase, used vehicles have become harder to come by, leading to a nationwide inventory shortage.
The report looks at several factors impacting an auto refinance loan, with the increase in used car values playing a major factor. Because used car values have increased, loan-to-value ratios, or LTV, have decreased, meaning that consumer’s vehicles are likely worth more than the value on their loans. This has resulted in a perfect storm for consumers to refinance their auto loan.
This is great news for consumers who may not have been able to get approved for auto loan refinancing just a few months ago. It also means that consumers with strong applications (great credit, stable income, low debt, etc.) may get even better loan terms. This trend played out in a big way In May 2021, seeing auto refinance loan approvals increase 37% versus January 2020, 14% compared to January 2021, and 66% compared to May 2020.
Below are some key findings from the report:
Used Car Values
- Among popular vehicle make and models refinanced in the RateGenius network, the 2017 Ford F-150 pickup increased in value by $10,475 (+40%) from May 2020 to May 2021.
- The next greatest percentage increase was the 2017 Nissan Rogue. The SUV’s value increased by $3,775 (+30%).
- The 2017 Honda Civic sedan value increased by $3,800 (+28%), followed by the 2017 Jeep Wrangler which had the second-highest average gain in value, $6,325, but the smallest overall increase (+25%).
Loan-to-Value Ratios
- The average retail loan-to-value ratio across all auto refinance applications in May 2021 was 102%, the lowest on record.
- Last month, the average retail LTV was 26% lower than January 2020, 18% lower than January 2021, and 27% lower than May 2020.
About RateGenius
RateGenius is a technology company that 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's online application is quick, simple, and available from the comfort of your home at apply.rategenius.com.
Media Contact
Corbin Mihelic
CSG
316-209-9794
cmihelic@wearecsg.com
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