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As Auto Shopping Season Heats Up, it’s Clear that Some Consumers Refinance Their Loans within Days of Purchase

Insights from TransUnion suggest some consumers may save approximately $50 on their monthly payment through refinance

Late summer usually means big business for auto dealerships. In fact, TransUnion (NYSE: TRU) found that auto loan originations between 2015 and 2017 spiked 5.5% in the third quarter compared to the yearly quarterly average. A new analysis by the TransUnion auto business found that many consumers actually refinance their initial auto loans just a few days after securing them, often resulting in a lower monthly payment.

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“The end of summer is generally a key time for the auto industry, as better weather means more consumers are shopping for vehicles. It’s also a time of year when some consumers can find a deal before automakers roll out new models in the fall. This year, the prospect of rising automotive tariffs has also made it a hot time to buy,” said Brian Landau, senior vice president and automotive business leader at TransUnion. “TransUnion found that a number of consumers are taking advantage of the opportunity to refinance their new purchases, despite the rising interest rate environment. Consumers who might be paying a somewhat higher interest rate on the loans they obtained through the dealership may find that refinancing can lower those interest rates or extend the loan term – in other words, help those same consumers manage their monthly cash flows.”

Late Summer = Jump in Auto Originations


Avg. Quarterly Originations

Q3 Originations (July-August-September)

Percent Difference













(2015-2017 Average)




According to the recent TransUnion study of 1.5 million refinanced auto loans originated in 2013 and 2014, there is a spike in refinance activity within a few days of purchase. “We found that some consumers, especially those interested in taking advantage of loyalty programs and bundled options, will refinance their loans a day or two after the original purchase,” added Landau.

The study indicated that the cash flow benefits from refinancing can be compelling. The average decrease in auto loan debt service–for those specifically seeking a payment reduction–was $52 per month. The average refinancing consumer achieved an APR reduction of 2.4%.

“In an increasingly competitive auto finance market, there is a lot of potential for auto lenders to tap into refinancing as a way to grow their business. But market education is key. Nearly two-thirds of auto finance companies offer refinancing, but according to a recent Harris poll, less than half of consumers are aware they may use this option as part of their overall financing strategy. Broader recognition of this option can benefit both consumers and lenders seeking new business,” concluded Landau.

About TransUnion (NYSE:TRU)

TransUnion is a leading global risk and information solutions provider to businesses and consumers. The company provides consumer reports, risk scores, analytical services and decisioning capabilities to businesses. Businesses embed its solutions into their process workflows to acquire new customers, assess consumer ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud. Consumers use its solutions to view their credit profiles and access analytical tools that help them understand and manage their personal information and take precautions against identity theft.

We call this Information for GoodSM.