It’s often said that knowledge is power and the Internet has made car buyers increasingly more powerful. In previous decades, the car buying process often left the buyer at a distinct disadvantage when compared to the dealer in all aspects of the negotiation. Luckily, the Internet has levelled the playing field for car buyers. Before a car buyer steps foot onto a dealer’s showroom floor, he or she can use the Internet to research information that will help in negotiations. Car buyers no longer have to rely on a dealer’s word that they are getting a great deal. As the Internet continues to play a larger role in the car buying process, buyers also want the Internet to play more of a factor when it comes to financing their vehicles.
A major reason car buyers want a shakeup in the way they finance their vehicles is the gradual and stunning rise in both new and used car prices. The average new car is too expensive for the average American household, and used cars do not offer a very affordable alternative. Americans are borrowing and paying more for their vehicles. According to Yahoo News, “The amount of money borrowed to pay for new and used vehicles climbed to an all-time high of $968 billion in the third quarter (of 2015), according to new data from Experian, which tracks auto loans.”
As a result of rising prices, car buyers want to have more information and options when it comes to paying for their vehicles. According to Santander, “During a traditional car purchase, customers will select a vehicle and only afterward go to the F&I office to learn about their financing options. But a recent survey from leasing marketplace Swapalease suggests most buyers would like to reverse that process. Two out of three American car buyers would like to see all their financing options online before visiting a dealership, according to the recent survey, which polled 2,500 drivers.” Car buyers, equipped with smart phones and laptops, want as much information as possible before purchasing their vehicles.
Car buyers have made it clear they are ready for some serious changes to the current car buying process. An Autotrader study “shows that only 17 out of 4002 people prefer the current car buying process, and the rest want significant changes, particularly in the test drive, deal structuring, financing paperwork and service phases.” Car buyers have signaled that they are ready for changes to the status quo, and these changes should include alternative financing opportunities. Though the auto industry has been hesitant to fundamentally change the car buying process, they can help offset rising car prices by getting creative with their financing options.
The Internet has had an increasingly larger influence on the car buying process. Buyers today are more educated and have more information at their disposal than past generations, but they want more, especially when it comes to financing. Additionally, with rising car prices, automakers should get creative and offer new, sensible financing options. Car buyers are ready to shake up the car buying process, and it is time for automakers to provide substantial change.