FICO Survey: New Zealanders Would Like To Go Online To Finance Their Next Car

AUCKLAND — July 10, 2018

Highlights:

• 40 percent of consumers in New Zealand and 42 percent of consumers in Australia indicated they would like to apply for their next automotive loan online
• 66 percent of respondents believe that convenience was the main reason for choosing an online channel for automotive loan applications; 52 percent say it allows them to easily compare shop across lenders
• 44 percent of consumers in New Zealand currently spend 30 minutes or more completing the loan financing process

More information: http://www.fico.com/en/latest-thinking/ebook/2018-consumer-survey-of-automotive-finance-perceptions-new-zealand

Silicon Valley analytic software firm FICO, today announced the results of its first global survey on consumers’ automotive finance experience and found a growing inclination for vehicle shoppers in New Zealand to apply for auto loans online. 40 percent of respondents said they would likely go online to obtain their next loan, the third highest figure among the nine countries surveyed. In Australia, it was 42 percent, and in the UK, 48 percent.

These results indicate a significant shift in channel preference for loans with the majority of consumers. 62 percent in New Zealand and 45 percent in Australia have applied for their most recent auto loans at dealerships.

“Unlike the US, where seven in ten respondents would rather apply for their next loan at a dealership or through a visit to the bank or lending institution, New Zealand consumers are more open to the idea of digital financing,” said Vaile Mexted, country manager for New Zealand at FICO. “Convenience, speed and ability to comparison shop across lenders were the top reasons given by consumers. Unlike other markets, auto dealerships and banks were not seen as having a pricing, security or convenience advantage in the New Zealand market.”

When it came to time spent on the transaction, 44 percent of consumers in Australia currently spend 30 minutes or more completing the auto loan financing process.

While this pales in comparison to countries like Mexico (65%), USA (62%) and Chile (60%), there is much room for improvement in terms of speed and efficiency.

Consumers are very open to instant, pre-qualified offers to improve expediency. Only 15 percent of New Zealand consumers would not accept such an offer and may prefer instead to work through a traditional, full loan application process and credit check.

“Predictive scoring analytics can help to ensure creditworthiness accuracy and reduce the manual underwriting that’s still takes place to complete a loan today. Optimisation of deal structures can ensure an appealing offer is made to the consumer while ensuring profitability for the lender. Instant and accurate lending decisions will deliver a positive customer experience and grow the loan books of lenders,” added Mexted.

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 were surveyed. Respondents were between the ages of 18-64 who acquired a loan on a new/used vehicle within the last 3 years.

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