FICO Survey: Majority of Canadian Consumers Don't Shop Around for Automotive Financing Options
TORONTO, April 12, 2018 /CNW/ --
Highlights:
- FICO commissioned first global consumer survey on automotive finance experience
- Nearly 8 in 10 (78%) of Canadian consumers shopped for a vehicle first, before inquiring about financing
- 70% of Canadian consumers obtain their loans at the dealership and are among the least likely to seek financing online (4%)
- Canadians are the most likely consumers globally, to only consider one financial offer before making their decision (60%)
Silicon Valley analytic software firm FICO today announced the findings of its first global survey on consumer perceptions of the automotive finance process. The research looked at how consumers view the financing aspect of their auto purchase for new and used vehicles, as well as how the ecosystem of providers (banks, captive finance providers, credit unions, dealerships, and startups) are currently meeting customer expectations.
"FICO's research provides valuable insight into the auto finance experience for consumers. As a customer-centric organization, GM Financial puts our customers at the center of everything we do. The results of the research are a great validation that lenders and their dealers must be relationship-focused throughout the customer journey," said Bob Beatty, executive vice president for North America Customer Experience, GM Financial.
Among the key findings is a sizable gap between a consumer's interest in online auto loans (33%) vs current global market adoption (10%). In Canada, there is a 19-point difference; only 4% of Canadian consumers applied for their auto-loans online while 23% plan to do so for their next loan. In Canada, the dealership is still the main channel for consumers with, 70% financing their auto purchase at the dealership.
Canadian consumers appreciate immediacy in their loan process. The survey showed that 35% of Canadian respondents would accept or at least consider an instant loan offer for financing a vehicle if that meant they could avoid dealing with a bank or doing extra paperwork. Further, Canadian respondents (60%) were the most likely to report only considering one financing offer in their auto-lending process, compared to the global average of 44.4%.
"Canadian consumers want to speed up and streamline the auto-lending process," said Kevin Deveau, vice president and managing director, FICO Canada. "This haste could mean that there is a lack of understanding of available options which ultimately may result in Canadians taking financing offers that aren't right for them. Lenders have an opportunity to be proactive, to educate their customers, and to humanize the experience."
Other data points of note for Canada:
- A good offer can sway consumers – 32% of Canadians didn't initiate the auto-financing process; rather, a company had reached out to them with an offer.
- There are generational differences in auto financing - Baby boomers strongly prefer going to a dealership and Millennials prefer going to a bank. In general, younger consumers are more likely to seek digital financing, however, is not the first choice for the majority of any age group.
- Obtaining an auto loan is perceived as simple – Canadian respondents were the most likely globally to rate their auto-loan process as easy.
- Overall, consumers are fairly satisfied with their experience - 89% of Canadian respondents feel they got a good or excellent deal. Further, the clear majority of consumers around the world feel that they are receiving at least a fair deal in during their financing experience.
FICO's independent research surveyed 2,200 adult consumers across nine countries including Canada, the US, Mexico, Chile, Australia, New Zealand, Germany, 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.
More information on the survey results can be found at: http://www.fico.com/en/2018-consumer-survey-of-automotive-finance-perceptions-canada
About FICO
FICO (NYSE: FICO) powers decisions that help consumers and auto finance lenders come together. 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 and customer facing decisions. FICO holds more than 185 US and foreign patents on technologies that increase profitability, customer satisfaction and growth in many industries including lending. Using FICO credit risk lifecycle solutions and advanced analytics, auto lenders can accelerate their marketing, acquisition, customer management, financial crime prevention and analytics strategies to add value to their bottom line.
Learn more at http://www.fico.com
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SOURCE FICO
Erin Griffin, Kaiser Lachance Communications, 647-725-2520 ex. 221, [email protected], http://www.fico.com
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