– By Caroline Falls –
Car buyers are more savvy than ever, doing their research online and turning up in car showrooms ready to buy, according to the latest Automotive Finance Insight, a report by Sydney-based market research group ACA Research.
The 2016 survey shows one in five vehicles buyers is taking only one week. Overall, vehicle customers are taking less time to decide and purchase a vehicle.
“The length of time from developing a shopping list of vehicles through to making the final choice (is) down to a median of just four weeks,” ACA Research said in a statement about the report. “It is clear that the effort required to compile and refine a shortlist of desirable brands and models has decreased as the depth of information that is accessible online increases,” ACA said.
The 140-page report will appeal to anyone selling vehicle finance. “It’s very much about the ordinary person buying finance,” said James Organ, managing director of ACA Research.
Meanwhile, new vehicle sales in Australia are headed for a record in 2016, overtaking the record set in 2015. That’s a boon for providers of vehicle finance.
“With interest rates at historically low levels, car ownership is more affordable than ever before and total automotive lending commitments in the 2015-2016 financial year reached more than $15.5 billion,” ACA said.
ACA’s research indicated almost one-third of car buyers looked at websites of online finance brokers before buying a vehicle. And, some 16 percent used a broker to secure their finance.
“ANZ and Macquarie Bank (including Esanda) are currently the greatest beneficiaries of the broker channel,” ACA said. “The growth of the broker channel, particularly online brokers, will place more pressure on the current OEM (original equipment makers) finance model as disruption continues through companies such as Society One.”
In summary, the ACA Research Automotive Finance Insights report demonstrates that in a competitive automotive finance market, traditional lenders will have to evolve their distribution, technology and marketing strategies to ensure they remain relevant in a sector rife with disruption.
Organ said he didn’t envisage any dramatic turnaround in the trend for car ownership any time soon. The car sharing economy is leading others to speculate the peak of vehicle ownership is imminent, and may arrive as early as 2020.
“There’s going to be some shift,” Organ said, adding he didn’t anticipate a deterioration in car ownership in Australia until at least 2025. “People still want to own cars.”
The report is based on a nationally representative sample of 1983 consumers who bought a vehicle costing at least $7,500. Of these 797 respondents used finance to purchase their vehicle.
It is the group’s fifth edition of a survey of the finance journey undertaken by new and used car buyers in Australia.
The full report provides detailed insights about how consumers finance the purchase of vehicles, their purchasing behaviours and decisions, trends and attitudes regarding automotive finance products and market penetration of the leading finance providers.
Click here to go to ACA Research website for more information about the report.
