IRVINE, Calif. — In part two of a recent survey from CarFinance.com, a website dedicated to providing lending to below-prime consumers and a resource for consumers seeking auto financing information, respondents ranked negotiating the sales price as the worst part of buying a new car (62 percent), while getting the lowest possible interest rate was ranked as the most important part of the auto financing process.
The snapshot survey, which was conducted online among over 2,000 consumers1, also found that arranging/negotiating financing ranked as the second-worst part of buying a new car (57 percent) behind negotiating price, while getting the lowest possible interest rate (37 percent) and lowest monthly payment (30 percent) trumped other important factors such as convenience and privacy… even getting approved.
“Despite a positive lending climate and a surge in new car sales this year, the challenges of getting the best price and interest rate still preoccupy car buyers,” said Jim Landy, CEO of CarFinance.com. “These factors shouldn’t roadblock someone from getting the car they want, however. A little bit of homework can really help expand a consumer’s auto purchase and finance options, especially in this post-recession upswing.”
CarFinance.com Survey Highlights
When asked to rank the facets of their last car buying experience on a scale of 1 – 4 (with 1 being “best” and 4 being “worst”) respondents indicated researching vehicle makes and models and shopping and test driving were the best at 66 percent and 60 percent respectively. Negotiating the car sale/price and arranging/negotiating financing were ranked worst at 62 percent and 57 percent respectively.
The Best and Worst of Buying a Car
|Researching vehicle makes and models||Shopping and test driving||Arranging / negotiating the financing||Negotiating the car sale/price|
When asked what was most important regarding the auto financing process, over two-thirds of respondents said the lowest possible interest rate and lowest monthly payment were most important (37 and 30 percent respectively), above other considerations such as saving time, getting approved or privacy.
The Most Important Part of Car Financing
|37%||Lowest possible interest rate|
|30%||Lowest monthly payment|
|14%||Saving time / a simple, straight forward process|
|6%||Anonymity and Privacy|
New Car Buying and Financing Tips
CarFinance.com offers consumers the following tips to help simplify the new car buying and financing process.
1) Do your vehicle homework.
Build and price your new car online ahead of time and be open to comparing similar makes and models since you may find a comparable vehicle for less money. After your test drive, use the Internet to check local dealer inventory for price and availability and be sure to research any current offers or special rebates for the specific make and model you’re interested in buying.
2) Do your financing homework.
Comparison-shop available finance rates, so you don’t have to rely solely on the dealer’s interest rate (which could end up meaning you lose any ‘great’ deal you have negotiated on the car’s price). Use online calculators to figure out what you can actually afford each month, what the monthly payment would be on a range of loan amounts with varying interest rates. Approach it like a research project, and it will pay off. Online research isn’t just the best psychological weapon, it’s also the best way to ensure that you will make the right vehicle and lender decision and get a good deal.
3) Secure an auto loan ahead of time.
Get approved for an auto loan before you visit the dealership. Negotiations about sales price are usually always easier and more successful if you have cash in hand. Even if you secure a loan through the dealer, get approved ahead of time to eliminate the extra time and work of qualifying there. Direct lender CarFinance.com, which specializes in auto financing services for the below prime consumer, offers a convenient, private, virtually paperless loan application process and timely approvals online.
Landy noted that credit markets have significantly improved for people with below prime credit who now represent almost half (46 percent)2 of the auto loan origination market. In July 2012, below-prime approvals were up 24-plus percent.3
“We understand the concerns expressed by consumers about the financing process which is why we dedicated CarFinance.com to both empowering consumers in the auto financing process and making it easier, more comfortable and hassle-free…all while helping them find that all important low rate,” said Landy. “The rebounding economy means credit opportunities for all borrowers have significantly improved, and consumers who legitimately can be approved for auto loans should not be left out simply because they fear the process.”
1 Survey methodology: Survey of 2,011 U.S. Consumers aged 18+, conducted electronically from June 20-July 19, 2012.
2 Equifax data for 2010-2011, cited March 2012:
3 According to CNW Research cited in an article from F&I and Showroom on July 24, 2012:
CarFinance.com’s (www.carfinance.com) management has helped hundreds of thousands of consumers with less-than-perfect credit purchase a quality, late-model vehicle. Its mission is to empower the growing ranks of below-prime new and used car shoppers by providing a time- and money-saving way to get their car loan pre-approved before they hit the dealership. Through CarFinance.com car shoppers can apply for a new or used car loan, or potentially lower their existing car loan payments through refinancing, from the comfort of home – and because the entire process is completed online directly with the lender, personal information is kept private, safe and secure. CarFinance.com enables car shoppers to walk into the dealership with their financing in place and their heads held high, and secure a better deal by confidently negotiating price as if they were “cash buyers.” The site also provides consumers with easy-to-use finance empowerment tools and content, such as calculators, articles, tips and advice.
CarFinance.com is led by the team that built Triad Financial, one of the largest non-prime U.S. auto finance companies, and is headquartered in Irvine, California.