Caribou Financial Inc.

04/15/2026 | Press release | Distributed by Public on 04/15/2026 07:20

Monthly Car Payments Hit Record Highs in Q1, But Caribou Data Shows Drivers Are Finding a Way Out

Caribou's Q1 2026 Auto Refinance Trends Report reveals EV owners, long-term borrowers, and Millennials are leading the way on savings.

DENVER, CO-April 15, 2026-Faced with mounting financial pressure around car ownership, more American drivers are turning to auto refinancing for relief. New data from auto refinance platform Caribou shows that customers who refinanced to lower their monthly payments in Q1 2026 saved an average of $1621 a month, at a time when car payments have never been higher. The average monthly payment for a new vehicle hit a record $773 in Q1 2026, according to Edmunds, with a growing share of buyers now committing to payments above $1,000 a month.

Caribou's Q1 2026 Auto Refinance Trends Report1-based on data from January through March 2026 of customers who refinanced to lower their monthly payments-reveals several notable trends shaping the current refinance landscape:

  • Longer loans, bigger balances-and now a refinancing reckoning. The average original loan balance climbed to $45,146, up from $44,491 in Q4 2025. To cope with rising vehicle prices in recent years, many Americans stretched into 84-month loans to keep monthly payments manageable. Now, those drivers are refinancing. Caribou saw an 11% quarter-over-quarter increase in customers refinancing original 84-month loans in Q1. Drivers who opted for more financial flexibility upfront are now looking to refinance for a better deal.
  • The wave of EV purchases in the last four years is now paying off for owners who refinance. Across fuel types, EVs saw the biggest jump in refinance activity between Q4 2025 and Q1 2026. EV buyers who purchased in recent years, often at a premium and with rates to match, are now looking to lower their costs. EV customers saved an average of $209 a month after refinancing in Q1, up from $191 in Q4. By comparison, gas vehicle owners saved $156 a month in Q1, largely because EVs tend to carry higher original loan balances.
  • For Millennials already stretched thin by mortgages and family expenses, refinancing is delivering the biggest monthly savings of any generation. Millennials saved an average of $175 a month after refinancing in Q1, up from $170 in Q4 2025. According to Caribou's 2026 Car Loan Sentiment Survey2, if they could save $150 a month on their car loan, 58% of Millennials would use the savings to pay off other debt and 55% would use the savings for everyday expenses.
  • Gen Z is winning on rates, as maturing credit profiles open the door to better loan terms. Gen Z customers reduced their APR by an average of 5.05% in Q1, the steepest drop of any age group and a reflection of how much their credit has improved since their original purchase. This is especially important as 35% of Gen Z consumers in Caribou's 2026 Car Loan Sentiment Survey say they've struggled to make their car payment on time in the past year.
  • The minivan is having a moment, and Millennial dads may stand to benefit most from refinancing. Vans delivered the biggest jump in monthly savings across all vehicle types in Q1. Owners saved an average of $175 a month after refinancing, up from $155 in Q4. Their average post-refinance APR dropped to 6.83% from 7.04% the prior quarter. This timing is notable as minivan sales climbed in 2025, driven in part by a wave of Millennial dads drawn to feature-rich family vehicles. Many of those buyers are now prime candidates for refinancing.

"Car ownership has always been a significant household expense, but the financial pressure around it has felt more acute at the start of 2026," said Simon Goodall, CEO of Caribou. "Between record-level car prices and fuel prices now at a four-year high, our data shows that more drivers are taking action. Refinancing has become one of the most practical ways to find meaningful relief without having to change vehicles or upend their budget."

Caribou customers in Q1 also achieved an average post-refinance APR of 7.08%, the lowest quarterly average since Q2 2023 and a notable reduction from their average original APR of 10.81%.

Caribou's Q1 2026 Auto Refinance Trends Report is available here.

About Caribou

Caribou helps drivers take control of their car loan with real savings, trusted lending partners, and expert help every step of the way. With its advanced technology and friendly loan advisors, Caribou makes the auto refinancing process quick, easy, and transparent. Caribou shares the latest auto refinance trends each quarter, and current refinance rates each day, to provide the most in-depth, real-time insights about the auto refinance market. Customers save up to $162 per month by refinancing through Caribou.* The company is backed by QED Investors, Goldman Sachs, and other leading investors. Learn more at http://www.caribou.com.

1This information is estimated based on consumers whose auto refinance loan funded through Caribou between 1/1/2026 and 3/31/2026, had an existing auto loan on their credit report, and selected a loan offer to reduce their monthly payment.

2Caribou's 2026 Car Loan Sentiment Survey was conducted from March 27 to April 1, 2026 among 2,000 U.S. respondents to learn about how consumers financed their car loans, their attitudes regarding auto refinancing, and how their car payments impact their everyday lives. All respondents currently have a car loan on their primary vehicle.

Media Contact
Cindy Lien
[email protected]

Caribou Financial Inc. published this content on April 15, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 15, 2026 at 13:21 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]