Transparency, personalisation and speed are three key criteria that will drive growth of online auto loans, according to new research.
There is huge potential demand among consumers, with 48% in the UK saying they plan to apply for their next auto loan online, but adoption rates remain low.
According to analytic software company FICO’s first global survey on automotive financing, 63% of UK consumers acquired their most recent automotive loan at a dealership, while 15% went online.
Globally, the average online loan rate is around 10%.
The research, which looked at how consumers view the financing aspect of their auto purchase for new and used vehicles, showed that convenience and immediacy are important motivators in the loan process.
Even though UK consumers experienced the shortest loan application wait time globally, with 63% of buyers waiting less than 30 minutes, 86% said they would accept or consider an instant loan offer to avoid dealing with a bank or completing additional paperwork.
FICO’s research surveyed 2,200 adult consumers across nine countries, covering the US, Canada, Mexico, Chile, Australia, New Zealand, Germany, Spain, and the UK. The respondents were between the ages of 18-64 and had acquired a loan on a new or used vehicle within the past three years.
Steve Hadaway, general manager for Europe, the Middle East and Africa at FICO, said: “The survey results underscore that consumers expect more transparency, personalisation and speed.
“There is tremendous opportunity for the industry to move beyond transactional relationships into a long-term, customer-centric relationship by providing personalised experiences that give customers more control over the auto buying process.”
Other findings included high satisfaction ratings for auto finance, with 91% feeling they got a good or excellent deal in the UK, four percentage points higher than the global result and nine percentage points higher than Spain.
The majority of respondents also said that the level of financing they qualified for had some or a great deal of impact on their selection of a vehicle, make, model or dealership.