Though only 29% of buyers applied for financing online for their most recent vehicle purchase, 96% of those surveyed are willing to do so, according to a new study published by Cox Automotive.
The Cox Automotive Car Buyer Financing Journey Study revealed buyers who completed key financing steps online saved time and were more satisfied with their time at the dealership than buyers who completed the same steps in person.
Cox Automotive has been researching the car-buying process for 12 years and, with the release of this new study, is diving into the financing aspect of the car buying process for the first time.
Financing is an integral part of the car buying process, with 85% of new vehicles and 39% of used vehicles financed in 2021, according to Experian data. The new Cox Automotive Car Buyer Financing Journey Study explores the steps of the financing journey and measures consumers’ satisfaction with the overall vehicle financing process.
The Cox Automotive Car Buyer Financing Journey Study is based on an online survey of 3,050 consumers who financed the purchase or lease of a new (2,116) or used (934) vehicle in the past 12 months. To qualify, the respondents had to be at least 18 years old and had to use the internet during their shopping process. The survey was conducted from Oct. 7 to Nov. 16, 2021.
This extensive study measured buyers’ satisfaction with the vehicle financing steps taken, including the lender selection process and resources used to obtain vehicle financing. In addition, the research uncovered what financing steps consumers take online versus in person and their comfort level and concerns with financing online.
Here are five takeaways from the inaugural study:
1. Car buyers spend significant time on vehicle financing. Nearly all (87%) car buyers explored their financing options before visiting a dealership. More than a third of the time spent in the car-shopping process is dedicated to financing activities. Of the 12 hours and 19 minutes spent car shopping, four hours and 23 minutes are spent on researching financing options, securing financing and signing the contract.
2. Strong relationships matter. The study showed 70% of car buyers considered two or more lenders before choosing one and many had an established relationship with the lender they considered first. Buyers who were mostly digital, meaning they completed more than 51% of their car-buying journey steps completely online, have stronger loyalty to their lenders, resulting in…