UK car buyers ready for digital financing but adoption is slow, says report

Time 9:14 am, June 1, 2018

A GLOBAL survey on car financing has revealed that while 63 per cent of UK consumers got their most recent loan at a dealership, just 15 per cent got a loan online.

Announcing its findings, Silicon Valley analytics software firm Fico said consumers were planning to move to digital lending – 48 per cent of the UK respondents said they would prefer to apply online next time, which was the highest figure among the nine countries surveyed.

The independent research polled 2,200 adult consumers across the UK, USA, Canada, Mexico, Chile, Australia, New Zealand, Germany and Spain. The respondents were between 18 and 64 years old and had secured a loan on a new or used vehicle within the past three years.

Looking at how they viewed the financing aspect of their purchase of new and used vehicles, it showed that convenience and immediacy were important motivators. The sample size for the UK was 264, and even though UK consumers experienced the shortest loan application wait time globally, with 63 per cent of buyers waiting less than 30 minutes, 86 per cent said they would accept or consider an instant loan offer to avoid dealing with a bank or completing additional paperwork.

Consumers in the UK were also less likely to consider multiple lenders than those in Spain and Germany: 67 per cent of Spanish and 54 per cent of German consumers considered two or more loan offers before making a final decision while in the UK 50 per cent of borrowers considered just one lender.

Steve Hadaway, general manager for Europe, the Middle East and Africa at Fico, said: ‘The survey results underscore that consumers expect more transparency, personalisation and speed.

‘There is tremendous opportunity for the industry to move beyond transactional relationships into a long-term, customer-centric relationship by providing personalised experiences that gives customers more control over the auto buying process.’

In addition, the survey found that UK consumers were satisfied with their lending experience – 91 per cent felt they got a good or excellent deal, which was four percentage points higher than the global result.

Financing had a meaningful impact on the effectiveness of marketing to car shoppers as well, with 70 per cent of UK consumers saying the level of financing they qualified for had some or a great deal of impact on their selection of a vehicle, make, model or dealership.

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