Survey Shows Arizonans Want More Information from Auto Financing Industry
PHOENIX, Oct. 30 /PRNewswire-USNewswire/ -- Arizona consumers are more informed about the vehicle financing process than their national counterparts, according to a recent public opinion survey. Sixty-two percent of Arizonans consider themselves informed about the vehicle financing process, and 44 percent consider themselves very informed, as compared to 57 percent and 37 percent nationally.
This is the second Arizona-based survey by AWARE (Americans Well-informed on Automobile Retailing Economics), a nonprofit auto financing education group, that measured consumers' auto financing behaviors and perceptions. While the questions in the 2006 and 2008 surveys were very similar, the recent economic downturn provides insight into how consumers' perceptions and behaviors with auto financing have changed or remained the same in the past two years.
This year's survey revealed that nine of out of 10 consumers in Arizona believe that the current economic environment has made it more important for borrowers to educate themselves about vehicle financing. And while the 2008 survey revealed that the percentage (55 percent) of Arizonans who financed their most recent vehicle purchase has not changed since 2006, it did show that Arizona consumers were more informed for that purchase this year than they were in 2006, with 62 percent saying they were informed in 2008, as opposed to only 57 percent in the previous survey.
Despite increased consumer knowledge and the auto industry's own vehicle financing education efforts through AWARE, as well as individual company programs, the recent survey demonstrates more robust education efforts need to be put forth for consumers facing economic hardship.
Only 41 percent of Arizona consumers surveyed correctly responded that vehicle finance companies often work to help borrowers who are having trouble making payments. However, more than 6 in 10 respondents did know that vehicle finance companies would rather keep customers in their cars than repossess them.
"Arizona auto shoppers are more informed about vehicle financing than two years ago," said Eric Hoffman, spokesperson for AWARE. "Even so, the current credit crisis makes it more important than ever to help consumers understand how to work with their auto finance company if they are falling behind on payments."
This year's survey revealed that more Arizona consumers are planning to delay purchasing a new car or truck than they were this time two years ago. In 2006, 55 percent of Arizonans said they planned to purchase a new automobile within the next three years. Today only 43 percent of Arizona consumers planned a car or truck purchase in the near future.
Even with consumers delaying car or truck purchases, Arizonans report a number of positive trends regarding their future auto financing plans including:
-- 76 percent will budget a certain dollar amount before purchasing their
next car or truck;
-- 75 percent will check consumer studies for best makes and models
(compared with 69 percent nationally);
-- 66 percent will negotiate their financing; and
-- 86 percent will clarify anything they don't understand in their
contract.
Other highlights of the research include:
-- Consumers nationwide want more education in a tightening economy.
Eighty-six percent of respondents said the current economy means it is
even more important for them to be knowledgeable about their financing
options.
-- Consumers want flexibility in lending options. Six in ten consumers in
Arizona (61 percent) would rather reduce their monthly payments knowing
that it will increase the amount of time the vehicle is worth less than
the amount owed on the loan.
-- People want to understand their contracts better. While overall
education levels remained similar to two years ago, more consumers
reported they were interested in digging into the details. In fact, 50
percent of consumers in Arizona said they were interested in learning to
read and understand their contract, as compared to just 38 percent in
2006.
-- Negotiating finance rates key to consumers. Nearly half of Arizona
residents (45%) and 47% of U.S. adults said their first or second choice
of information that would benefit them most was about negotiating
finance rates.
AWARE was formed to build a greater understanding among consumers about how auto financing works. The group's Web site, http://www.autofinancing101.org/, aims to ensure that potential buyers of new and used autos have the tools and resources they need to successfully navigate the auto financing process. AWARE has materials in English and Spanish and focuses exclusively on educating consumers on vehicle financing in a web environment free of advertising or lead generation sales tactics.
Conducted for AWARE between June 13 and 24, 2008, KRC Research held 3,911 interviews as part of the comprehensive survey to better understand consumers' approach to auto financing. The survey included 324 Arizona residents, for a margin of error of plus or minus 5.4 percent.
AWARE's membership includes the following:
American International Automobile Dealers Association
American Honda Finance Corporation
American Suzuki Financial Services
AutoNation
Ford Motor Credit Company
GMAC
Group 1 Automotive, Inc.
Jaguar Credit
Land Rover Capital Group
Lithia Motors
Mazda American Credit
National Auto Finance Company
Nissan Motor Acceptance Corporation
Nuvell Financial Services
Saab Financial Services Corp.
Sixth Gear Solutions Corp.
Sonic Automotive, Inc.
Toyota Financial Services
United Auto Group, Inc.
Volvo Car Finance North America
Wells Fargo Auto Finance