A third of consumers on average, globally, would prefer to apply for their next automotive loan online, according to FICO’s 2018 Consumer Survey of Automotive Finance Perceptions report.
The data analytics company has revealed key consumer finance trends with a report on nine global markets after interviewing 2,200 consumers from the US, Australia, Canada, Chile, Germany, Mexico, New Zealand, Spain and the UK. The report looks at regional and other differences in how consumers view the financing portion of the car buying experience.
The UK was actually the most responsive market when it came to applying online for finance at 48%, ahead of markets like the US, which was below the average level at 29%.
The data showed that loans at the dealership still lead the way for how consumers most recently funded their vehicle with almost three-quarters (73%) of consumers in the US, followed by Canada at 70%, the UK at 63% and New Zealand at 62%.
All other markets show how over 50% of consumers in the other markets still use other methods other than finance to fund their vehicle purchases.
The survey showed that 67.8% of respondents identify their vehicle online or at the dealership before looking at finance, although again, the UK was below average at 65%, which suggests more consumers could be looking at affordability through finance before starting their search.
Only about 29% of consumers first learn what level of financing they qualify for before shopping for their vehicle.
The research shows that consumers are very open to instant, pre-qualified offers to improve expediency.
Only 13% of individuals would not accept such an offer and may prefer instead to work through a traditional, full loan application process and credit check or to pay in cash.
This option was particularly popular in Mexico, Chile, Germany, the UK and Australia, which all posted results above the average (40.8%).
The overall results also show that the average time to apply, get an offer and finalise a deal, was between 39 minutes to one hour, with 28.7% getting this down to between 15-30 minutes and some (3.5%) able to get this process down to under five minutes.
There were still over 10% of consumers spending more than a few hours to get their car loan finalised.
The good news for finance regulation, at least from a consumer perspective, shows that 61.1% are happy with the deal they were offered and 75.7% understood the terms of the financing.
The full report can be downloaded for free on FICO’s website.
