- Automotive refinancing platform company MotoRefi announced it raised $8.6 million in Series A funding
MotoRefi, a financial technology company that has developed an automotive refinancing platform, announced it has raised $8.6 million in Series A funding, according to TechCrunch. This round of funding was co-led by Accomplice and Link Ventures. Motley Fool Ventures, CMFG Ventures, and Gaingels also participated in the round.
Essentially MotoRefi addresses the problem where Americans have accumulated $1.2 trillion in auto loans. Even though the debt can be refinanced, many people avoid doing it out of fear around how complicated it can be. MotoRefi handles finding the best rates, pays off the old lender, and sets up the new title for the vehicle.
Along with announcing the new funding round, MotoRefi also revealed it has two new board members: Rob Chaplinsky, managing director of Link Ventures and Rachel Holt, former Uber executive and co-founder of Construct Capital.
MotoRefi CEO Kevin Bennett told TechCrunch that auto loan debt is about the same as student loan debt in the U.S. However, the majority of car owners do not know that refinancing their auto loan is an option. According to a 2017 Harris Poll, 47% of Americans were aware they are able to refinance their auto loan.
“People shop their home loans, while most just get their auto loans from the dealership where they bought their car, so their rates are artificially high,” explained Bennett via TechCrunch. “Meanwhile, credit unions can be great for auto loans but they might not have the tools to reach consumers.”
The MotoRefi platform can save customers an average of about $100 per month on their car payments. And Holt acknowledged that she saw firsthand how much debt auto loan drivers were carrying while working at Uber. Holt pointed out that dealerships were making a lot more money on financing cars rather than the margins involved in selling the cars.
With the new round of funding, the company plans to hire more employees and invest in its tech platform. Earlier this year, MotoRefi set up separate pilot programs with Progressive and Chime. Progressive and Chime will directly offer refinance options for customers along with setting up affiliate programs.
