Refinancing the Future

Have you ever thought about refinancing your auto loan? With current market trends, technology advancements, and the potential for increased savings, it’s something that more and more consumers are taking advantage of. In this episode of The Yield, Peter Kerr is joined by Chris Speltz for a conversation about how technology is changing the way consumers approach refinancing. Chris serves as Executive Chairman & Chairman of the Board of The Savings Group, the new parent company of RateGenius and AUTOPAY. He has over two decades of experience in the industry and has also held senior finance and managerial positions with Societe Generale and Comerica Bank.

Key Takeaways:

[2:00] The aims of the merger of AUTOPAY and RateGenius.

[4:35] What can consumers expect from The Savings Group?

[8:56] Common reasons consumers fail to seek out better interest rates on their auto loans.

[11:02] How exactly to cash in on increasing equity in used cars.

[15:28] The balance between supply and demand for cars is off due to the demand for unavailable chips.

[18:07] The future of auto loan refinancing in the wake of the financial global crisis.

[20:05] The health of the average consumer has greatly improved over the last 18 months.

[24:33] What role do credit unions play in today’s thriving savings and loan landscape?

[25:46] An overview of current federal rates and their impact on consumer debts.

[31:50] A look at future opportunities that will be offered by The Savings Group.

With the recent merger of former competitors RateGenius and AUTOPAY into the new Savings Group, consumers can expect to see some new and appealing options surfacing for refinancing auto loans. Unlike the more common tendency of consumers to refinance mortgages or transfer balances to a zero-interest credit card, many consumers simply overlook the option of refinancing their auto loan. Chris explains the common reasons for this, as well as the benefits of taking the time to refinance an auto loan and the technologies that are making it easier than ever for consumers to take advantage of low rates.

In the wake of the pandemic and resulting supply chain issues, used cars have become a hotter commodity than we’ve seen in a long time.  Consumers today are experiencing a fairly unprecedented option of cashing in on the equity that is sitting in used cars. With a nearly 10% decrease in used car sales, the value of used cars is increasing, giving car owners the opportunity to trade in a used car for more than they might have originally paid for it. And when you combine the continued chip shortage with changed post-pandemic consumer behavior that leans more heavily on vehicle ownership, this imbalance of supply and demand is not likely to be resolved anytime soon.

Not only is the auto market thriving, but the overall health of today’s average consumer is also as well. As Chris explains, credit scores and savings rates have gone up over the last 18 months, due in part to the trillions of dollars of federal relief that have been extended as a result of the pandemic. But considering the fact that federal rates have hovered around zero for over a decade, how have consumer rates been impacted? Chris walks the listeners through what we might expect in the near future based on loan to deposit ratios, consumer trends, and the competition that drives rates and affects yield.

As the conversation wraps up, Chris offers a look at future opportunities at The Savings Group. With nearly 10 billion auto loan refinance transactions conducted per quarter, there is clearly a place for returns in the auto finance market. And just as we aim to do at Yieldstreet, The Savings Group has found a way to increase the consumer benefit with the technology-enabled platforms that are helping people connect despite prior thick levels of friction.  It’s just one more way that new technologies are enabling people to realize their next level in investing.

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