However, with just one in two saying that they are very satisfied, much more can be done.
Oradell, NJ (PRWEB) April 25, 2007
Although the media is rife with reminders that Americans are living under seemingly increasing burdens of debt, that message hasn't put a dent into the market for automobile loans.
In fact, according to a new study by TechnoMetrica Market Intelligence, the market for auto loans is booming to the tune of about 9 million loans per year. TechnoMetrica reports that the majority of consumers who have purchased a vehicle within the past 2 years have financed it with a loan.
"Relatively easy access to loans is one of the key factors driving automotive sales," says Raghavan Mayur, president of TechnoMetrica and an expert on the automobile market. "Over the past two years, nearly two out of three (60%) vehicle purchases were facilitated through a loan."
Because of this symbiotic relationship, automakers and the loan industry must synergistically work together to more accurately assess their clients' needs. According to Mayur, when that is done, a "win-win situation develops, where the auto and loan industries work together to maximize profits while simultaneously maximizing the satisfaction of consumers."
Knowledge is Power
TechnoMetrica's research also found that Americans believe that they are generally informed about the auto financing process (65%). However, just 31% would completely agree that they are "well informed" about it.
This is important, as consumers tend to view information as the key to getting the best deal and appreciate it when the loan process is open and transparent.
According to Mayur, "savvier consumers mean more confident consumers. Which, in the long run, will make for better customers. The loan industry can tap into more customers simply by providing them with meaningful, clear and useful loan information."
In fact, the study found that the incidence of automobile loans (as opposed to the use of cash or leasing when acquiring a new vehicle) shot up nearly 68% when consumers' felt that they were well informed about the auto financing process (when compared to those who are not well informed).
"Simply put, information is key in this space," says Mayur.
Keeping Customers Happy
TechnoMetrica's study also looked at consumers' satisfaction with their most recent auto financing experience. The results: most (69%) were -- to some extent -- satisfied with their financing experiences, although just half (51%) were "very" satisfied.
"For the most part, Americans are satisfied with what the loan industry is doing," says Mayur. "However, with just one in two saying that they are very satisfied, much more can be done."
According to the study, Americans are least satisfied with promotional and sales material and most satisfied with ease of loan approval.
About the Study
This study is the first installment in a quarterly series of reports entitled "Automotive Financing" and is part of TechnoMetrica's AutoView series of reports. Based on a random, nationally representative telephone survey of 964 adult American drivers, this study explores recent and future (planned) vehicle purchasing activities and the incidence of auto loans, leasing and paying by cash. The study also examines the motivators and stumbling blocks that either promote or mitigate consumers' propensity to purchase a vehicle via loan, cash or lease, and explores ways in which to make financing and leasing more attractive to consumers. Satisfaction with the auto financing process is also a major component of this series, as is the role of information as an enabler for both consumers and the loan and auto industries, consumers' existing level of knowledge concerning the financing process and informational needs. The study also includes a section that provides insights into how consumers prepare for the financing process.