Opinion By Art Agrawal, Co-Founder and CEO of Jerry
Car ownership is the second largest household expense for most Americans. The financial burden on car owners continues to break records and drivers’ appetite to cut costs is quickly escalating.
Certain car ownership expenses, such as gasoline, do not have a near-term tech-based solution for improvement. Others, such as auto loans, with antiquated layers of process and hoops for borrowers to jump through are ripe for disruption.
This unusual time in history presents ample opportunity to the fintech leaders who can quickly identify changes in consumer demand and behavior. And, right now, the auto loan refinancing market shows some of the highest growth potential.
A Largely Overlooked Savings Sector — Auto Refinance
While most people shop for cars, few shop for financing. As a result, many consumers have settled for unfavorable terms and high APRs. They look for financial relief opportunities in other areas of their lives because the experience of financing a car has proven complex and time consuming.
According to a December 2021 report by Transunion, 26 million of 73 million consumers “are in a position to be highly motivated to refinance their loans.” With average auto loans hovering around $20,000 and likely to rise with car prices, the total addressable market opportunity is as large as $520 billion. Yet, only about $40 billion in auto loans are refinanced each year.
Drivers looking to cut expenses can likely find untapped savings opportunities when they refinance their auto loan. And the companies making it as easy and convenient as possible to do so will earn their business.
This is where fintech will win. Applying what our industry has learned about consumer behavior in response to savings and convenience can add exponential value to the auto loan customer relationship.
At Jerry, we’ve integrated the same AI and machine learning features that have made our car insurance compare-and-buy service successful into our auto refinancing service. Doing so, we’ve been able to cut the need for long forms, phone calls, and time wasted waiting out of the auto refinancing process.
As a result, we’ve shrunk the auto refinancing application time to 10 minutes and reduced the complete application to funding timeline from 19 days to as little as 48 hours.Those who refinance through our app can put an average of $118 a month back into their pockets.
Simplicity. Simplicity. Simplicity.
As fintech leaders, we must look at all financial transactions people experience and develop a better way. It is simply unacceptable for it to take an average of 19 days to complete a transaction in a society where nearly anything can be delivered to your doorstep in two. The auto industry – while speeding ahead with EVs and autonomous vehicles – still creates too many of these financial headaches that are solvable problems.
Listening to the needs of the everyday consumer and creating smarter ways of doing things will speed meaningful change at a time when drivers could use it most. The solutions that reduce friction and embrace AI, machine learning, and automation will witness the highest adoption rates, as they will be the ones to have successfully identified and addressed car owners’ overarching need: simplicity.
About Art Agrawal: Art Agrawal is the Co-Founder and CEO of Jerry. A car ownership super app, Jerry was born of Art’s desire to eliminate the hassle from his own frustrating, expensive and time-consuming experiences with car insurance, financing, repair, maintenance, warranties and parking. As a serial entrepreneur, Art previously founded and led the on-demand car repair services provider YourMechanic, the 2012 winner of TechCrunch Disrupt. As CEO, he grew YourMechanic from an idea to the largest company in its industry, with more than 2,000 mechanics making housecalls in all 50 states. Art attended Drexel University and started his first company at the age of 22.