Today we have released the findings from our first ever global consumer survey on automotive finance perceptions.
FICO’s independent research surveyed 2,200 adult consumers across nine countries including the US, Canada, Mexico, Chile, Australia, New Zealand, Germany, Spain, and the UK. The respondents were between the ages of 18-64 who acquired a loan on a new/used vehicle within the last 3 years.
The findings cover the financing aspect of both new and used vehicles from the beginning of the journey where customers start to research, the middle where negotiation, ‘shopping around’ and the loan origination begins, and the end where the deal is formalized and the consumer walks away with their vehicle.
5 Surprising Findings in Automotive Finance
(1) Americans love speed, right? The country that invented McDonalds should have the shortest wait times for auto finance. Wrong. It turns that the US is ahead of only Mexico in terms of wait time length to complete an auto finance transaction!
(2) Americans and Canadians prefer going online, right? Not so much. These two countries reported the lowest desire to complete their next transaction online out of the nine countries where we collected data. That said, there is a 23-point gap in terms of current digital use vs desired future use in the US, so clearly there is a consumer desire to make the shift to digital.
(3) You might think that Millennials would pick digital first, but it turns out not to be the case. Their first choice of channel for their next purchase is to go to the bank! This makes a little more sense though if you remember that Millennials often don’t have a lengthy credit history so may feel that going to someone they know will give them a better deal.
(4) Are women less likely to negotiate? We did not find a significant difference in terms of being likely to negotiate for an auto loan across men and women. Interestingly we found men are somewhat more likely to go online for their next loan and women somewhat more likely to go to a dealership.
(5) Want a great deal on your auto loan? Go to Germany. Germans were mostly likely to report they got a good or excellent deal on their transaction. They also reported short wait times and led the way in terms of current adoption of digital.
There were also a few findings that weren’t surprising. Customers want more transparency and speed during the process. They dislike lengthy paperwork. They want to be treated as individuals and they want to complete the transaction on the channel that works best for them. Some folks prefer the convenience of going online, some appreciate the one-stop shopping they can get at a dealership, and others like and trust their bank and prefer to go there. The one thing all consumers have in common? Financing a car isn’t just a one-time transaction but a moment of truth where financing companies can start or seamlessly continue a longer term, mutually beneficial relationship.
Want more insights? I’ll be presenting these and other findings alongside observations from GM Financial and Ally at our FICO World session next week in Miami entitled,"Consumer and Dealer Perceptions in Automotive Finance." For more info about the session, please check out the FICO World website. You can download the US report and the other eight country reports here.