EV financing startup Tenet is streamlining its refinancing program to speed approvals in anticipation of rising demand.
Tenet introduced EV refinancing in 2022 to help consumers reduce their monthly payments. Refi application volume at Tenet grew 900% year over year in October, driven by growing interest in cutting monthly costs and rising EV adoption in the U.S., Chief Executive and co-founder Alex Liegl told Auto Finance News. He did not provide volume specifics.
“It’s meant to help people take advantage of the better rates now versus a year ago,” Liegl said. “Now that rates are lower, they can take advantage of saving more. Residual values are more predictable, which makes it easier to underwrite the collateral for refinancing, and we want to make it simple and quick because most of the time, especially for refinance, it’s a purely financial decision.”
Tenet redesigned its refinancing process, leaning into digital applications, Liegl said. Updates include a fully online interface, faster processing times, and simplified data entry. The platform prioritizes key details such as the vehicle identification number, enabling Tenet to quickly evaluate the vehicle’s value and expedite funding, he said.
The revamped program allows Tenet customers to secure a refinancing agreement in as little as 24 hours, Liegl said.
“There’s a spike in interest, and we want to match that with the best experience,” he said. “We expect [EV refi] volumes to ramp up over the coming months.”
Refi demand increasing
Refinancing has become more popular for consumers who got into loans when rates were high. Recent interest rate cuts by the Federal Reserve are expected to lower rates, making refinancing attractive for some.
A September TransUnion survey of 1,002 auto loan borrowers revealed that 65% “agreed or strongly agreed” that their car payments were a significant financial burden, and in the same survey, 63% said they were “likely or very likely” to refinance their auto loan to save money, with 53% willing to refinance if it reduced their monthly payment by $50 to $149.
Refinancing an EV loan is similar to refinancing an internal combustion engine (ICE) vehicle loan, but higher monthly payments on EVs often drive owners to seek lower costs, when possible, John Possumato, CEO of mobility platform DriveItAway, told AFN. He added that many EV owners are affluent, which likely increases their awareness of refinancing opportunities.
In Q3, the average monthly payment for a new EV was $788, compared to $747 for new ICE vehicles, according to TransUnion’s Credit Industry Insights Report released on Nov. 12.
Tenet expecting significant growth in 2025
Meanwhile, Tenet is expecting a three-to-five-fold increase in origination volume in 2025 as the company looks to add two to three lending partners by the end of Q1 2025, and may end up adding as many as three to five lenders by the end of 2025, Liegl said, without adding origination specifics.
Additional lenders will allow Tenet to broaden its offerings, such as near prime financing on used EVs, he said.
