SYDNEY — July 10, 2018
- 42 percent of consumers in Australia and 40 percent of consumers in New Zealand 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
- 57 percent of consumers in Australia currently spend 30 minutes or more completing the loan financing process
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 Australia to apply for auto loans online. 42 percent of respondents said they would likely go online to obtain their next loan, the second highest figure among the nine countries surveyed. In New Zealand, it was 40 percent. Only the UK had more respondents who indicated preference for online at 48 percent.
These results indicate a significant shift in channel preference for loans with the majority of consumers. 45 percent of respondents in Australia and 62 percent in New Zealand 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, Australian consumers are more open to the idea of digital financing,” said Paul Swyny, automotive lead in Australia for 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 Australian market.”
When it came to time spent on the transaction, 57 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 17 percent of Australian 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 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 Swyny.
A total of 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.
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 185 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, manufacturing, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.
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