The automotive finance sector is witnessing a significant shift as consumers increasingly turn to refinancing to manage vehicle loan costs, according to an update from Experian, which is also focused on strengthening its fraud prevention capabilities through a strategic partnership.
According to Experian’s State of the Automotive Finance Market Report: Q2 2025, automotive refinancing has surged by nearly 70% compared to the previous year, reflecting changing economic conditions and consumer behavior.
Concurrently, Experian has announced a collaboration with Incode Technologies, Inc., integrating advanced identity verification tools into its Ascend Platform to combat fraud across industries, including automotive financing.
The rise in automotive refinancing highlights a growing trend among consumers seeking to capitalize on stabilizing interest rates.
Experian’s report reveals that in Q2 2025, borrowers who refinanced their vehicle loans achieved an average interest rate reduction of just over 2%, dropping from 10.45% to 8.45%.
This reduction translated into an average monthly payment decrease of $71, offering significant relief to borrowers navigating affordability challenges in the automotive market.
By comparison, in Q2 2024, the average rate reduction was only 0.93%, with rates falling from 10.54% to 9.60%. “With interest rates trending downward, we’re seeing more borrowers taking the opportunity to lower their monthly payments,” said Melinda Zabritski, Experian’s head of automotive financial insights.
This shift underscores how consumers are proactively seeking better financing terms to ease financial pressures amid ongoing discussions about vehicle affordability.
The competitive landscape of automotive financing is also evolving.
In Q2 2025, banks reclaimed the lead as the largest lender for total automotive financing, capturing a 27.50% market share, up from 24.50% the previous year.
Captive lenders, typically tied to automakers, saw their share decline from 30.17% to 26.63%, while credit unions experienced modest growth, rising from 20.35% to 21.04%.
For new vehicle financing, captives retained dominance with a 52.39% share, though this was down from 60.74% in 2024.
Banks and credit unions gained ground in this segment, with shares increasing to 25.91% and 12.24%, respectively.
In the used vehicle market, banks led with a 28.59% share, followed closely by credit unions at 27.63%, while captives dropped to 6.40%.
Zabritski noted:
“The shift in lender market share highlights an increasingly competitive landscape for automotive financing.”
This is signaling a dynamic market where lenders are adapting to consumer demand and economic trends.
Parallel to these financing trends, Experian is enhancing its fraud prevention capabilities through a partnership with Incode Technologies.
This collaboration integrates Incode’s AI-driven identity verification technology into Experian’s Ascend Platform, enabling secure and efficient identity validation for over 1,800 global clients across sectors like financial services, automotive, healthcare, and digital marketing.
Incode’s technology, which includes government-issued ID verification, facial recognition, liveness checks, and real-time metadata analysis, strengthens Experian’s CrossCore Document Verification suite.
Ricardo Amper, Incode’s Founder and CEO, emphasized the importance of advanced protections in an era of evolving AI-driven fraud, stating,
“Together, we’re addressing the most prevalent fraud vectors with unmatched speed, security, and accuracy.”
As automotive refinancing continues to rise, driven by favorable interest rate trends, Experian’s partnership with Incode positions the company to safeguard financial transactions in an increasingly digital environment.
These developments highlight Experian’s role in fostering financial opportunities while addressing critical challenges like fraud, ensuring both consumers and lenders can navigate the automotive market with confidence.