Half of buyers are hesitant with regards to using dealer provided car finance following last year’s Court of Appeal ruling on undisclosed commission payments, says Motors. In response to findings of this survey, which polled 2,000 motorists, Motors urges dealers to be upfront on commission payment issues.
Fifty-three per cent of the buyers p were aware of the issue surrounding car finance sales. This number rose to 59% for men and 63% of over 55s. Awareness was higher for those planning to buy new cars (63%) than used cars (50%).
Lucy Tugby, marketing director of Motors, said: “Car finance sales are in the spotlight and the ongoing legal process, coupled with some high profile campaigning around compensation, has understandably placed doubt in the minds of some buyers.
“Our research shows how awareness of the issue varies widely depending on factors such as demographics and whether customers are buying new or used.
“We advise that dealers are open about the action they have taken to improve their processes to build trust with car buyers. This provides an opportunity to improve transparency earlier in the sale process, as per the Financial Conduct Authority’s guidance on understanding the role of commissions and finance.”
Nearly half (46%) of those who were aware of the issue said they would think twice about using dealer provided finance or refuse it.
Motorists are moving away from outright purchase to monthly payments.
The number of owners purchasing their car outright will drop to 53% from 61% in the next buying cycle.
Tugby said: “Consumer appetite is there for moving to monthly payments for convenience and affordability. On the back of this, dealers could grow finance penetration by creating attractive offers in a transparent and compliant manner.”
