Three out of four motorists buying a new car on finance are not convinced they are getting the best deal; almost all of them admit that they don’t fully understand the small print, and two-thirds end the experience dissatisfied.
These and other results from a survey by online car finance broker FairSquare echo the message that The Car Expert has been spreading for years – that car buyers do not understand car finance and they do not trust car dealers to give them a fair deal.
Buyers financing cars with no idea of how finance works
Last year, more than three-quarters of all cars bought in the UK were purchased with finance products. However, 89% of buyers did not fully understand the ‘small print’ of their car finance deal – such as what happens if the stipulated mileage is exceeded – and 60% admitted signing up without knowing what the consequences may be.
Some 32% were not aware that multiple applications for credit can adversely affect personal credit scores; 73% of buyers felt unsure as to whether they were being offered fair deals or not; 66% were dissatisfied after completing a car purchase and 37% said they would consider buying their next car online – up from 25% in 2016.
Asked to rate the stress of buying a car most people put it above experiences such as a visit to the dentist, a visit to the doctor, Christmas shopping, using public transport during commuter peak times, visiting in-laws and watching a horror movie.
The least favourite elements of car buying were:
- visiting dealerships and forecourts
- filling out lengthy requests for personal information, and having to repeat the process with each different provider
- comparing prices of the same vehicle and finance offers from different retailers
- feeling pressurised into a sale without time to properly consider
- feeling that the finance offered may not be the best but one that pays the supplier the greatest commission
- inspecting used vehicles
Paul Bartley, CEO of FairSquare, says: “These results paint a pretty disappointing and unsatisfactory picture of the car buying and financing landscape in the UK.
“Even if consumers feel they are paying the right price for the car, there is clearly a lack of understanding of the finance products available to them, together with the benefits and risks associated with those products. Access to like-for-like comparisons is very challenging and time-consuming.”