They biggest concern consumers have buying a car on finance is a lack of transparency on fees and charges.
That’s the headline finding of research from Jato Dynamics into consumers in France, Germany, Italy, Spain and the United Kingdom which found that 43% of consumers were concerned over transparency and fees.
Overall, it found that consumers were unable unable to understand and differentiate between the details of finance products.
According to the findings, over four in 10 (43%) don’t understand the details of car finance, such as the impact of APR% on payments, despite growing interest in what car finance has to offer.
Across the countries, the majority of people view car finance as an important way to purchase a vehicle, with almost half (48%) stating that they are more likely to consider a car finance option now than they were 12 months ago.
Citing a new number of key benefits, 56% of people believe that car finance allows them to buy a better car, while over half (51%) state that car finance gives them more options, and 49% agree that without car finance they couldn’t go ahead with their intended car purchase.
When asked their biggest concerns regarding car finance, the highest cause for concern was a lack of transparency in fees and charges at 43%, while a quarter (24%) cited difficulty with understanding the terms and conditions.
Mike Bennett, product manager at JATO Dynamics, said: “There’s no doubt that consumers see the clear benefits of being able to finance their cars, but people are looking for greater clarity where complexity and confusion is all too prevalent.
“Consumers need to easily access and understand the right information in a clear way before they’ll be able to view car finance as a strong route for purchasing their vehicles.”
Despite rising interest in car finance, consumers are also increasingly looking to alternative ownership models when it comes to their vehicles. When asked, which options they would consider as a long-term solution in place of purchasing their next vehicle, car leasing topped the list with 35% agreeing they would look to hire their vehicle with a 12+ month agreement, while 14% would even consider shared ownership.
