This blog shares some valuable insights into the shifting sands of the vehicle finance purchasing landscape. The data is taken from our Automotive Finance Insights Report. The research provides vehicle manufacturers, dealerships and finance lenders with rich data and observations into the purchase process and the buyer behaviour.
The Purchase Journey
The market research details the specific stages a buyer goes through when choosing which vehicle to purchase and how they go about financing the vehicle. The stages include insights from the initial search for a vehicle and generation of a ‘shopping list’ of potential vehicles, through to the final choice of which vehicle was purchased.
The study shows that, on average, the process of buying a vehicle takes almost 12 weeks, though for just a third of individuals (36%) it takes less than 2 months.
Activities undertaken prior to vehicle purchase, such as sourcing finance lenders was also established and are listed below.
Vehicle Purchase Behaviour
Typically, the first four weeks of the process are dedicated to finding and comparing vehicle offers. This initial period is clearly an important time for manufacturers to ensure that their brand is on the shopping list. Vehicle dealerships and manufacturer websites are two of the four main sources of information during this initial phase, so this is a critical point of influence point in the purchase process. Do a poor job here and you can get left out of the buyer decision making process entirely. As the number of vehicles is shortlisted, consumers turn their attention to the decision regarding how they will finance their purchase.
On average, consumers will test drive vehicles approximately 4-5 weeks prior to purchasing. Almost half of consumers (45%) make a decision in the final week of the process, and therefore move relatively quickly to completing the sale. Engaging with potential owners in the wake of a test drive experience is therefore critical to converting interest in a vehicle to a sale.
Vehicle Finance Purchase Behaviour
The market research shows that vehicle finance options aren't usually considered until after the shopping list of vehicles is established. Considering financial options usually begins at the same time as individuals begin culling the vehicle shopping list - around halfway through the 3 month process. Understandably, it seems the search for a finance provider doesn't take place until the individual has a clear idea about which vehicle they may purchase.
The vehicle financing process lasts around 3 weeks from the consideration of the need for finance, and ending with the selection of a lender.
While many decide on their financing approach a month prior to purchase, a large portion of consumers (39%) make their final purchase decisions for finance lenders within the final week. Finance lenders must make sure they are prepared to market themselves heavily at this point.
Information Sources for Vehicle Search
The market research also demonstrates the overwhelming usage of websites in the search for a new vehicle. Of the top four sources, three are online, although it should be noted that the salesperson at the dealership is still the second most important influencer. Brochures from dealerships and word of mouth represent the next tier of influence.
The rising importance of online mediums shows that vehicle manufacturers need to allocate reasonable portions of their marketing budget to online channels.
To download our FREE EBOOK on Automotive Finance Insights please click here.
ACA Research conducted a total of 802 surveys with consumers who financed the purchase of a vehicle worth at least $7,500. The research was conducted in June 2011.