As consumers continue searching for flexible and affordable financing options, credit unions remain a strong entity in a dynamic automotive finance landscape. Their rising influence is especially evident in the refinance space, where they are emerging as a beacon of monthly payment savings for consumers.
Experian’s State of the Automotive Finance Market Report: Q2 2025 took a deep dive into data insights across new and used vehicle originations, risk segmentation and lender market share to deliver a comprehensive analysis of the evolving automotive environment.
Data in the second quarter of 2025 found that the volume of automotive refinancing increased nearly 70% from the previous year. Notably, credit unions accounted for the majority of refinancing, coming in at 68.33% this quarter, from 63.22% in Q2 2024, and consumers who opted to refinance with a credit union saved an average of $87 on their monthly payments. Meanwhile, banks went from 22.71% to 21.45% year-over-year, and those who refinanced with them reduced their monthly payments by an average of $46 in Q2 2025.
Credit unions are making a measurable impact in the automotive refinance space as they steadily gain market share. With average loan amounts and monthly payments continuing to rise across the board, their consistent growth in this segment reflects a positive alignment with consumer needs to better manage their payments.
Key Trends Shaping the Current Finance Landscape
In Q2 2025, data found the average loan amount for a new vehicle increased $1,017 from last year, reaching $41,983. Furthermore, the average monthly payment grew from $735 to $749 year-over-year, and the average interest rate slightly declined from 6.85% to 6.80% in the same time frame.
Looking at used vehicles, the average loan amount was up $481 from Q2 2024, coming in at $26,795 this quarter. Additionally, the average monthly payment went from $527 last year to $529 this quarter, and the average interest rate decreased from 12.12% to 11.54%.
Despite the rise in average loan amounts and monthly payments, the decline in average rates creates a favorable environment for refinancing and gives credit unions the opportunity to capitalize on this trend to deliver more feasible payment offers to consumers.
In addition to the refinance space, credit unions continue to play a vital role in the overall automotive finance ecosystem, as they steadily grow their presence in vehicle market share. Digging into the share of total financing, credit unions grew from 20.35% in Q2 2024 to 21.04% in Q2 2025. Meanwhile, captives declined from 30.17% to 26.63% and banks went from 24.50% to 27.50% during the same period.
Interestingly, credit unions also gained share in the new vehicle finance market, coming in at 12.24% this quarter, from 9.99% last year. Banks saw growth from 21.12% to 25.91% and captives decreased from 60.74% to 52.39% year-over-year.
While new vehicle loans have historically been dominated by captives and banks, credit unions’ growing presence in this space signals a strategic shift that suggests they’re offering competitive rates and catering to consumer demand in areas typically outside of their stronghold.
On the used side, credit unions incrementally reduced the gap between themselves and banks, coming in at 27.63% in Q2 2025, from 27.59% in Q2 2024, and banks went from 26.80% to 28.59% year-over-year. Meanwhile, captives were at 6.40% this quarter, from 7.83% last year.
The proximity between credit unions and banks in the used vehicle market share underscores the growing influence and ability credit unions have to offer flexible deals as they continue to serve a wide range of consumers.
This report helps paint a more holistic picture of the dynamic automotive finance market, where the continuation of rising loan amounts and monthly payments is reshaping consumer behavior. Amid these shifts, declining interest rates allow lenders to provide more appealing refinancing options, particularly through credit unions, which delivered the highest rate reduction in Q2 2025.
As affordability remains a key topic in the automotive industry, credit unions are believed to be essential players in helping consumers navigate the evolving landscape.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.