Car finance affordability concerns raised by consumers.
【Summary】A survey commissioned by ALPHERA Financial Services reveals that 50% of UK consumers who have financed a vehicle purchase in the past year are concerned about the affordability of their monthly payments. Younger car buyers are more worried about affordability compared to older buyers. Additionally, 43% of respondents said that dealers did not encourage them to consider future economic circumstances before taking out a new finance agreement.
According to a recent nationwide survey conducted by ALPHERA Financial Services, half of UK consumers who have financed a vehicle purchase in the past year are now worried about the affordability of their monthly payments. Out of those surveyed, 10% expressed being 'very concerned' while 40% said they were 'somewhat concerned' about their payment obligations.
The survey also revealed that younger car buyers are more likely to feel uneasy about affordability, with 55% stating they were 'somewhat concerned' compared to only 16% of those aged 65 and over.
Interestingly, 43% of respondents mentioned that dealers did not encourage them to consider potential economic challenges in the future before agreeing to a new finance agreement.
Consumers have different expectations of dealers when it comes to discussing finance agreements. 66% believe dealers should discuss repayment obligations, 58% expect them to explain terms and conditions and any additional charges, and 31% think dealers should disclose whether the salesperson is qualified or accredited to sell car finance packages.
Kirk Franks, head of national sales at ALPHERA Financial Services, commented on the findings, stating that the cost-of-living crisis is still impacting many car buyers due to inflation, rising interest rates, and higher fuel costs. Franks also emphasized the importance of dealers ensuring fair value and transparency in line with the new Consumer Duty.
When determining the affordability of a new vehicle finance agreement, consumers cited the cost of monthly payments as the most important consideration (86%), followed by the size of the deposit (63%), and any potential additional finance charges such as excess mileage or vehicle damage (42%).
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