Budgets Are Tight, Yet Most Car Owners Are Overpaying On Their Loan

A new survey reveals 70% of car owners haven't even checked to see if they could save money with a better loan.

For most Americans, a car isn't a luxury. It represents the infrastructure of daily life. It's how people get to work, pick up their kids, and make it to the doctor. But affording that car has never been harder. New vehicle prices have hit record highs, inflation is squeezing household budgets, and millions of borrowers are carrying auto loans at rates they've never had a chance to revisit. To better understand how Americans are managing their car loans, Caribou surveyed 2,000 current auto loan holders about their finances, their experiences with the lending process, and what they know-and don't know-about refinancing.¹

Sticker shock doesn't end at the dealership.

For many borrowers, the problems started before they ever drove off the lot. Buying and financing a car can be an opaque, high-pressure experience, and the data shows consumers feel it. Nearly half (44%) of respondents said they felt moderately or very pressured during the financing process when purchasing their current vehicle. And 1 in 4 borrowers say they didn't get the best financing deal available to them when they purchased their vehicle.

That unease has only compounded since the purchase. The broader economy is adding pressure from every angle. Inflation in the U.S. jumped to 3.3% in March 2026, making it the fastest climb in nearly two years. On top of that, recent Consumer Price Index data also shows prices rose 0.9%, triple the 0.3% pace seen in February 2026.

The financial strain is showing up when it comes time to make car payments. Nearly one in three borrowers (30%) struggled to make their car payment on time in the last 12 months. Among Gen Z borrowers, that share climbs to roughly 35%. Another 22% of all respondents say their monthly payment is currently difficult to afford. These are not the experiences of people on the financial margins. They represent a broad cross-section of Americans for whom car ownership has become a burden.

The new car market isn't offering any relief either. Edmunds reports that vehicle prices reached a new high in Q1 2026, and consumers are feeling it. Nearly two-thirds of survey respondents (65%) say they've noticed car prices rise over the past year. Of those, 41% say they plan to hold onto their current vehicle longer rather than buy new. That decision makes the terms of an existing loan more consequential, and refinancing more relevant, than ever.

For the millions of borrowers who feel they started on the wrong foot-and are now being squeezed by rising everyday costs-a course correction exists. But as the survey reveals, most haven't taken it.

Millions of Americans can save on their car loan. Why most don't check.

Despite a financing process that leaves nearly half of borrowers feeling pressured, most people simply accept the rate they were given at purchase and never look back. The survey reveals a striking gap between awareness and action. Consumers are aware of the benefits of refinancing-they just haven't acted.

Most borrowers recognize what refinancing offers: 71% of borrowers cite lower monthly payments as a benefit of refinancing, 68% name lower interest rates, and 52% point to less total interest paid over the life of the loan.

Yet, only 29% of auto loan holders have ever checked to see if they qualify for a lower rate, and only 25% say they've refinanced in the past.

The gap is especially striking along gender lines. Men are nearly twice as likely to have checked their eligibility (39% vs. 20% of women), a disparity that likely reflects differences in self-reported financial literacy rather than financial need. Women in the survey are actually more likely to report payment difficulty-making the confidence gap a costly one.

So what's stopping borrowers? Among those who haven't refinanced, the most common deterrents are fees or penalties (47%), too much hassle (46%), and concern about credit score impact (33%). Each of these reasons is real, but also surmountable. The refinancing process is simpler than most borrowers expect, fees are often outweighed by savings, and checking rates through a marketplace like Caribou uses a soft credit pull, meaning it won't affect a borrower's credit score at all. A hard inquiry only happens if they choose to move forward. The reward for clearing these hurdles is substantial. Borrowers say that a median of $100 in monthly savings would make refinancing worth the effort, a threshold many drivers could realistically clear.

$150 a month isn't a nice-to-have. It's groceries, debt relief, and peace of mind.

Rising vehicle prices have left many borrowers locked into loans that made sense in the moment but cost more over time. Refinancing offers a way to revisit those terms. And when the survey asked what would actually motivate people to act, the answer was consistent: show me the monthly savings.

Thirty-nine percent of borrowers say a lower monthly payment is their single strongest reason to refinance, followed by 24% who point to a lower interest rate. The gap is even wider among older borrowers. Among those 45 and up, nearly half prioritize the monthly payment above everything else.

In an environment where tariffs and inflation are pushing up prices on everyday goods and household budgets are stretched thin, this is a story about cash flow-not financial optimization. An overwhelming 85% of borrowers say saving $150 a month on their car loan would "make life significantly easier."

And when borrowers imagine what they'd actually do with that money, the answer isn't a vacation or a splurge. Most choose survival and stability: 60% would use the savings to pay down other debt, 56% would build emergency savings, and 56% would cover everyday expenses like groceries and gas.

What borrowers plan to do with those savings also shifts by income. For households earning under $50,000, the top priority is meeting immediate needs. For households earning over $150,000, the savings tilt more toward investment and long-term goals. The message lands differently depending on who's hearing it, but the underlying appeal is consistent across income levels: more money back each month matters.

A $3.8 billion opportunity: a second chance for a better deal pushes more Americans to refinance.

The convergence of financial pressure, record-high vehicle prices, and growing awareness has created real momentum. More than half of borrowers (55%) say they are somewhat or very likely to consider refinancing their car loan in the next 12 months. Among those who have struggled to make payments in the past year, that intent jumps even higher, with 71% saying they're likely to explore refinancing.

The market is already moving. Experian estimated that auto refinance volume reached $3.8 billion at the end of 2025, a 40% increase year-over-year and a reflection of a growing wave of borrowers who have decided they don't have to keep the rate they were given. For those ready to find out where they stand, Caribou's calculator can show a personalized savings estimate in minutes.

¹Caribou'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.