Over three-quarters of car buyers (76%) will consider the finance options offered by dealers, even though only half admit to being comfortable with the process, according to MOTORS’ Consumer Insight Panel research.
The findings reveal a strong appetite among buyers to source their finance through dealers with nearly two-thirds (63%) of those who bought their last car outright, saying they will consider dealer finance next time around. While 94% of owners currently paying for their car on monthly instalments will consider dealer finance options when purchasing again.
The research, which polled the views of over 2,000 in-market car buyers, also identified when consumers first start looking at how to finance their purchases. Almost half (46%) first think about payment options before they start searching, 32% during the initial search stage, dropping down to 11% during the shortlisting stage and 11% during the final decision stage.
However, amongst those considering dealer finance only one in two (51%) say they are comfortable with the process. Over a third (34%) are neither comfortable nor uncomfortable, while 15% are uncomfortable. The highest levels of discomfort are experienced by used car buyers, women and 18-24 year-olds.
Overall the biggest concerns raised by buyers were hidden fees (43%) and higher interest rates (43%), followed by pressure to sign on the dotted line (24%).
“Our research shows how dealers are the go-to option for finance for most car buyers, although the level of discomfort many feel should be factored in by all retailers,” said Lucy Tugby, Marketing Director of MOTORS.
“The convenience of discussing and arranging finance at the point of sale is clearly a major selling point for most buyers but anything that can be done to put customers at ease with greater transparency could make a big impact on conversion.
“The findings also identify just how important it is for dealers to actively promote their finance options online as over three-quarters of buyers first start to think about payment options in the early stages of their search journeys.
“There is also an opportunity for dealers to grow their finance penetration by opening conversations with buyers who traditionally choose to purchase outright. Our research shows how the cost of living crisis is prompting many buyers to hold onto their savings and consider funded monthly payments instead,” said Tugby.
