Motor Trader The award-winning and longest running UK magazine for car retailing professionals. Your first stop for News, Jobs and Reports for the motor industry.
Over three-quarters of car buyers (76%) will consider dealer finance even though only half are comfortable with the process, according to MOTORS.
The research polled the views of over 2,000 in-market car buyers. 63% of those who bought their last car outright say they will consider dealer finance next time while 94% of owners paying for their car on monthly instalments will consider dealer finance options next time.
Lucy Tugby, marketing director of MOTORS, said: “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.”
MOTORS also identified buyers thinking about payment options before they start searching (46%), during the initial search stage (32%), during the shortlisting stage (11%) and during the final decision stage (11%).
Only one in two (51%) of those considering dealer finance say they are comfortable with the process and over a third (34%) are neither comfortable nor uncomfortable.
15% are uncomfortable, with the highest levels of discomfort experienced by used car buyers, women and 18-24 year-olds.
The biggest concerns raised by were hidden fees (43%) and higher interest rates (43%), and pressure to sign (24%).