Survey Shows New Yorkers Want More Information from Auto Financing Industry
NEW YORK, Oct. 30 /PRNewswire-USNewswire/ -- New York consumers are more likely to have conducted research before applying for an auto loan than their national counterparts, according to a recent public opinion survey. Sixty-seven percent of New Yorkers indicated they conducted research before seeking vehicle financing as compared to only 51 percent nationally.
This is the second New York-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 83 percent of consumers in New York 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 of New Yorkers who financed their most recent vehicle purchase has not significantly changed since 2006, it did show that New York consumers conducted more research for that recent purchase than the national average, with 67 percent of New Yorkers having conducted research before applying for an auto loan compared to only 51 percent nationally.
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 52 percent of New York consumers surveyed correctly responded that vehicle finance companies often work to help borrowers who are having trouble making payments. However, 62 percent did know that vehicle finance companies would rather keep customers in their cars than repossess them.
"New York auto shoppers are more informed about vehicle financing than their national counterparts, 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 New York consumers are planning to delay purchasing a new car or truck than they were this time two years ago. In 2006, only 15 percent of New Yorkers said their next vehicle purchase was more than five years away. Today, that number has increased to 21 percent.
Even with consumers delaying car or truck purchases, New Yorkers report a number of positive trends regarding their future auto financing plans including:
-- 90 percent will clarify anything they don't understand in their
contract;
-- 86 percent will carefully read their contract before signing;
-- 82 percent will budget a certain dollar amount for their purchase;
-- 68 percent will negotiate their financing;
-- 65 percent will compare financing rates from multiple sources; and
-- 55 percent will check their credit score.
Other research highlights 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.
-- Negotiating skills key to New Yorkers. Roughly half of consumers (51% in
New York and 47% nationally) said their first or second choice of
information that would benefit them most was about negotiating finance
rates.
-- New Yorkers want to understand their contracts better. More than four in
ten New York residents (43%) and 42% of U.S adults indicated they would
benefit from learning how to read and understand their contract, an
increase of two percentage points in New York and eight percentage
points nationally from 2006.
-- New Yorkers remain very satisfied with recent vehicle financing
purchases. More than nine in ten (91%) of New York consumers who
self-reported they feel informed about vehicle financing were satisfied,
including more than six in ten (64%) who felt very satisfied.
AWARE was formed to build a greater understanding among consumers about how auto financing works. The group's Web site, 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 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 341 New York residents, for a margin of error of plus or minus 5.3 percent.
AWARE's membership includes the following:
American Financial Services Association
National Automobile Dealers Association
National Association of Minority Automobile Dealers
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