The convenience of one-stop shopping continues to keep Canadian consumers offline and in-stores when it comes to purchasing their next vehicle
TORONTO, March 13, 2019 /CNW/ - Highlights of Findings in FICO's 2019 Canadian Consumer Survey of Vehicle Finance Perceptions:
FICO commissioned its second global consumer survey on the automotive finance experience
Nearly 7 in 10 (66%) Canadian consumers applied for automotive financing directly at the dealership when they purchased their vehicle, with 58% planning on using this method next time
Respondents indicated that the convenience of one-stop shopping (46%) and the expectation for promotions and discounts (42%) made dealerships the top choice for financing destinations
Globally, Canadian consumers are the most likely to only consider one lender before making their financing decision (70%)
World-renowned analytic software organization, FICO, today announced the findings of its second annual global survey on consumer perceptions of the automotive finance process. The study looked at how consumers perceive the financing aspect of their auto purchase for new and pre-owned vehicles, as well as if the services and options offered by providers (banks, captive finance providers, credit unions, dealerships, and start-ups) are currently meeting customer expectations.
Key findings from the survey indicate that when it comes to auto financing, Canadians are most comfortable leaving it to the perceived experts. In fact, more Canadians sought financing directly from the dealership than any other participating country (66% versus 56% global average). In addition, Canadians were the least willing to seek financing online (9% versus 16% global average). Regarding future automotive loans, 17% of Canadians would consider using an online application process in comparison with 27% of global participants.
In accordance with the trends seen from last year's survey results, globally, consumers continue to take a proactive approach to financing auto purchases. The survey showed that 73% of Canadian respondents initiated the financing discussion when purchasing a vehicle, with 27% responding to an offer from a company. While still relatively low, the numbers show that comparatively, Canadian consumers are responding to financing offers more than most other countries, only being surpassed by Germany (29%).
Additionally, Canadians were the most likely respondents to report only considering one financial lender before making their decision (70% versus 49% globally).
"In a time where many consumer decisions are being made independently online, when it comes to automotive financing, Canadians still want direction," said Kevin Deveau, vice president and managing director, FICO Canada. "More than any other market, Canadian consumers are trusting dealerships to make them an offer, and in most cases, they don't feel the need to shop around. This means there is an obligation and opportunity for financing providers to streamline their processes to ensure they can provide the right offers to customers, quickly, and without damaging relationships."
Other data points of note for Canada:
There's always wiggle room– Cumulatively, 81% of Canadians negotiated at least a little bit on the terms of their lease or loan.
Monthly payments trump APR – For Canadians, monthly payment amount was a more important factor than APR when deciding on automotive financing (93% and 90% respectively).
Patience is a virtue – 52% of respondents said that it took less than 30 minutes to complete the financing transaction, while 48% took longer than 30 minutes, implying that there is still significant manual work that takes place during the financing process.
Overall, consumers fully understand the terms of the financing and feel they got a good deal– 80% of Canadian respondents fully understand the terms of the financing (up from 76% last year). Further, the clear majority of consumers around the world feel that they are receiving at least a good deal in during their financing experience.
FICO's independent research surveyed 2,000 adult consumers across nine countries including Canada, Australia, Germany, the U.S., Mexico, Chile, New Zealand, Spain, and the UK. The respondents were between the ages of 18-64 and had acquired a loan on a new/used vehicle within the last three 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 190 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.