CarGurus Study Reveals Desire for More Car Financing Information Earlier in Shopping Journey
The study found:
- 93% of car shoppers agree that pre-qualification for a loan before visiting the dealership would be useful.
- Despite this overwhelming trend, only two in three shoppers were aware that it was a possible option; and of those who recently financed a vehicle, 50% pre-qualified for financing before doing so.
- Pre-qualifying for auto financing gives shoppers more confidence, with 68% of shoppers believing that doing so would help them feel more confident and prepared to talk to dealers about financing, and 66% found value in pre-qualification because they wanted to complete more of the shopping process before visiting the dealership.
- However, 46% of shoppers are concerned that their pre-qualification rates would not be final, and 41% are concerned that they would have to repeat the financing process at the dealership.
- When it comes to financing a vehicle, 42% of shoppers wished they could see their monthly payment estimates while shopping for a car online before visiting a dealership.
“Our research found that consumers are eager to purchase a vehicle in a similar fashion to buying a home, and they want know more about financing for this major purchase in advance instead of treating it as an afterthought,” said
In addition to asking car shoppers about pre-qualification in advance of visiting the dealership, the study also aimed to learn more about their overall automotive financing knowledge. The study also found:
- Shoppers believe that a vehicle’s price drives the most profit for dealerships (45%), while 30% think that auto loans do.
- When considering a loan for a vehicle, the monthly payment and interest rate equally mattered most to car shoppers (37% each), followed by total price paid over loan life (18%) and the length of the loan (7%).
- When presented with an imaginary car shopping scenario involving a 5-year loan with 5% APR for a
$25,000vehicle and $5,000down payment, shoppers believed the following would have the greatest impact on monthly payments:
- 46% - whether the interest rate increased from 5% to 8%
- 29% - if the length of the loan increased from 5 to 6 years
- 24% - if there were no down payment
In addition, the study delved into a wide array of similar automotive finance topics, some of which regards ways to improve shoppers’ experiences when purchasing a vehicle. This study’s full findings can be found here, and an accompanying blog post to educate dealerships can be found on CarGurus’
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Source: CarGurus, Inc.