The insurance industry is all about convincing customers to bundle their policies putting all their coverage in the hands of one carrier. Now MotoRefi is shaking up that long-standing practice by offering a new option—bundling insurance with auto loan refinancing.
The Washington D.C.-based startup announced the move Monday at the Money 20/20 fintech conference in Las Vegas. When a consumer comes to the MotoRefi website to seek a better deal on their car loan, they’ll also have the opportunity to be connected with an insurance carrier that may also offer lower coverage costs.
“Tens of thousands of people come to our site every month and come with the intent of refinancing their car and saving money, we’re just offering them another chance to save money. A two for one,” MotoRefi CEO Kevin Bennett said in an interview.
Bennett describes the insurance industry’s method of bundling as “horizontal” providing convenience for the customer while boosting a carrier’s profits.
MotoRefi, he says, is rotating that concept 90 degrees.
“We’re really launching vertical bundling, the idea you can bundle auto insurance with the refinancing of your car,” Bennett said.
Just how much money can be saved on auto insurance depends on the vehicle, driver and coverage level. But Bennett says his company is using the same model he says is saving those who refinance their car loans through the site about $100 a month.
“We’re leveraging our existing tech stack, borrower profiles and relationships with both our refi customers and major players in the auto finance and insurance industry to secure amazing rates that we pass on directly to our customers,” Bennett said.
So far MotoRefi is working with what Bennett described as a “large national carrier” but said the company will be “adding more in the near future.”
Right now on the MotoRefi website there’s an auto insurance page inviting visitors to “learn more,” which they may do if they’re pursuing a loan refinance.
“We are actually reaching out to a customer for whom we think we can provide a compelling offer and asking about their interest level. If so, we are connecting them with that carrier,” explained Bennett.
The idea to bundle insurance with loan refinancing came from customer feedback Bennett explained.
“We started talking to our customers about how else we can help them…and they told us we’d love you to help us get a better deal on auto insurance as well,” he said.
That request may be rooted in the feeling by many owners that their vehicle has become a liability rather than an asset, Bennett surmised. He pointed to a 2020 study by the Triple A revealing annual cost of vehicle ownership can be as high as $10,000.
This latest offering for MotoRefi comes during a two-year period of fast growth for the company. When it announced a $45 million round of Series B funding last May, MotoRefi reported between the first quarter of 2020 and Q1 2021 its revenue grew seven-fold, loan volume grew five-fold and its team grew by 2.5 times.
That latest cash infusion followed a $10 million investment by Moderne Ventures in January.
Bennett says MotoRefi’s newest gambit combining auto loan refinancing with an insurance matchmaking service is not only a good business move, but an innovative combination of two technologies declaring, “This is really bringing fintech (financial technology) and insurtech (insureance technology) together in auto to help the consumer using cutting edge technology.”