Capital One survey shows soft buyer confidence in securing financing
Consumers appear to have a notable desire to purchase a vehicle amid the upcoming holiday shopping season. Their sureness that a finance company will underwrite the contract so they can take delivery doesn’t appear to be on the same level.
The latest Capital One Auto Navigator survey reveals only 26% of respondents feel very confident when shopping for a car. While this is a 6% increase over 2018, Capital One found that respondents attribute three reasons for being wary about their vehicle-purchase prospects, including:
— Low confidence to not having finances in order prior to visiting a dealership: 27%
— Not researching nor knowing what vehicle they want: 43%
— Past experience: 28%
In addition, only 24% of Capital One survey participants said they are “a boss” when it comes to negotiating during vehicle buying, a number that also saw a slight increase (8%) over last year (16%).
“Car shopping should be enjoyable instead of stressful, and with a little pre-work, consumers can ensure their decision complements their lifestyle and budget,” Capital One Auto Finance managing vice president Jeffrey Rabinowitz said in a news release.
“We found that 88% of consumers surveyed understand what it means to pre-qualify for financing, but only half are willing to try it,” Rabinowitz continued.
The survey of 1,004 U.S. adults ages 18 and older was conducted on behalf of Capital One Auto Finance using Engine Insight’s Online CARAVAN® omnibus. Of the 1,004, 693 do not work at a car dealership or ad/public relations company, have purchased a vehicle in the past, are planning to get an auto loan or ever had one. The survey was fielded September 5-8.
Additional findings from the survey include:
— Based on survey responses, finance is not only the consumers’ biggest concern during the car-buying process, but also the most time consuming and stressful.
— 75% of respondents put budget in their top three elements to consider when buying a vehicle.
— There is a division among the most important financial factors when purchasing a vehicle. The survey determined 28% of respondents looking for the lowest monthly payment, 27% focused on final sale price of the vehicle and 20% concerned with total cost of ownership.
— The most time-consuming task at the dealership is working with and signing paperwork with the finance department, according to 52% of respondents.
Based on survey responses, shoppers crave improvements to the vehicle-buying experience.
Capital One discovered 57% of respondents are looking for improvements to the vehicle-buying process, particularly transparency in financing options, negotiations and more clarity on dealer incentives and promotions.
To help, Rabinowitz suggested a tool offered by Capital One.
“With Auto Navigator, consumers can pre-qualify for financing with no impact to their credit score, and with our Auto Learning Center, they can research all aspects of car shopping,” he said. “This transparency allows consumers to feel more confident in their car-buying experience.”
Auto Navigator by Capital One provides a digital inventory of nearly four million vehicles from almost 13,000 participating dealerships across the nation. Auto Navigator further supports consumers by allowing them to see if they pre-qualify for financing with no impact to their credit score, saving them time before heading to the dealership.