Car buyers in some of Europe’s wealthiest nations remain confused by the small print when it comes to car finance packages, according to new research by JATO Dynamics.
While across France, Germany, Italy, Spain and the United Kingdom, the majority of people view car finance as an important way to purchase a vehicle with almost half (48%) stating that they are more likely to consider a car finance option now than they were 12 months ago, according to the findings, over four in 10 (43%) don’t understand the details of car finance, such as the impact of APR% on payments.
Citing a new number of key benefits, 56% of people believe that car finance allows them to buy a better car, while over half (51%) state that car finance gives them more options, and 49% agree that without car finance they couldn’t go ahead with their intended car purchase.
Despite this appreciation, the widespread lack of awareness when it comes to car finance is linked to a number of additional worries. When asked their biggest concerns regarding car finance, the highest cause for concern was a lack of transparency in fees and charges at 43%, while a quarter (24%) cited difficulty with understanding the terms and conditions.
To hear more about the impact of agency models on franchised dealers, make sure you come along to Automotive Management Live on November 9.
Mike Bennett, product manager at JATO Dynamics, commented: “There’s no doubt that consumers see the clear benefits of being able to finance their cars, but people are looking for greater clarity where complexity and confusion is all too prevalent. Consumers need to easily access and understand the right information in a clear way before they’ll be able to view car finance as a strong route for purchasing their vehicles.”
Despite rising interest in car finance, consumers are also increasingly looking to alternative ownership models when it comes to their vehicles. When asked, which options they would consider as a long-term solution in place of purchasing their next vehicle, car leasing topped the list with 35% agreeing they would look to hire their vehicle with a 12+ month agreement, while 14% would even consider shared ownership.
With demand for car finance still on the rise, JATO Dynamics said OEMs and dealers need to ensure that the right information is communicated as clearly as possible, or risk greater numbers of consumers becoming unwilling to commit to these packages and turning to alternative solutions.