New market research shows that convenience and confidence are key to today’s car-buying journey. Phillip Williams, the founder and chief commercial director of Oodle Car Finance reflects on what the findings mean for dealers.
It’s been a turbulent few years for the world of car-buying. The pandemic, the introduction of Consumer Duty and the ongoing cost-of-living crisis – have brought challenges for customers, dealers and finance companies alike.
As a company focused on ease of offering in the car-buying journey, we’re keen to understand the impact of these changes on consumer attitudes and behaviours.
So, for the second year running, we have commissioned market research into what drives consumer decision-making when it comes to buying and financing a used car. (This formed a study by The Nursery, commissioned by Oodle, to segment the consumer market of used car buyers on finance, November 2022.)
Not surprisingly, the research showed that consumers are feeling the pinch as a result of the cost-of-living crisis. Indeed, almost half (49%) said they expected to feel the impact of the UK’s economic challenges even more over the next 12 months.
Respondents said they were most worried about how they would afford to pay their energy bills (67%), while 60% said they were worried about how they would afford everyday purchases such as groceries. Similar numbers (58%) said they were hesitant to use credit or take out a loan in case they couldn’t afford to pay it back further down the line.
When it comes to arranging used car finance, our research showed that convenience is key to the modern-day buyer with consumers wanting a smooth, straightforward and hassle-free process.
For example, when asked why they chose finance to buy a used car, the top reasons given by buyers were that it was the easiest option, they can spread the cost and it made it easier to budget.
Many particularly value the convenience of a one-stop shop, with 44% of all respondents saying it was important to them to be able to use the same company for both car finance and car purchase.
The findings also make it clear how much buyers value the expertise of trusted dealers in helping them make the right choice, both with their car and their finance.
When asked what was most important to their decision-making, 38% of potential buyers said that buying a used car from a trusted network of dealerships was important to them.
Buyers also want to have a conversation about their options – well over a third (42%) said they wanted to discuss their finance and car choices with a professional.
The desire by consumers to feel confident in their car-buying journey is further confirmed by the finding that 81% of potential buyers would prefer to complete their car purchase at a local dealership with the option to test drive the car.
So, what do dealers need to put in place to make sure they are offering the convenience and confidence that the modern car buyer is looking for? Clear information appears to be key.
Clearly, buyers have differing levels of knowledge and understanding about both cars and finance. Some will be very savvy while others will want more help and advice. But however well or poorly informed they are, all will have questions and want answers fast.
Trusted dealers can offer real value here, using their wealth of knowledge to take stress and anxiety out of the process, walk buyers through the options, and help them make informed choices.
Speed is also critical. Once a customer has chosen their car, they want their finance to be sorted as soon as possible, ideally at the dealership.
This means dealers need to have strong relationships with car finance partners who can answer queries and accept applications 24/7, taking customers off the market as soon as possible. Many customers are eager to lock in their budget and enjoy the confidence of knowing how much they can spend.
Collaboration: dealers and finance partners
Clearly, in a fast-changing world, there are many imperatives that are outside dealers’ control. They can’t solve the cost-of-living crisis to make car-buying more affordable for hard-pressed consumers.
But they can choose their finance partners wisely and build strong collaborative relationships that give customers a streamlined, end-to-end journey. As economic conditions ease such dealers will be well placed to turn enquiries into sales and drive profit.