Survey finds Canadians most comfortable getting auto financing from dealerships
Canadians know that comparing online is the best way to find a good deal. Although not when it comes to car loans, apparently.
A new survey from data science company FICO found that nearly seven in 10 Canadian consumers applied for auto financing right at the dealership when they bought their car.
Not only that, Canadians were the least willing out of all the countries surveyed to get their financing online — only 9% did, versus 16% globally.
Now, this is a major issue. The best deals are found when you’re able to compare the market. When travelling, you wouldn’t book the first hotel you find. You’d compare the other hotels in the area, using sites like Expedia, for example.
For whatever reason, Canadians seem afraid of using comparison sites to their advantage. A study from LowestRates.ca in 2017 found that while 72% of Canadians compare hotels when booking a vacation, less than half compare financial products online.
When buying a car, it’s important to understand your financing options. You can get quotes online and see what rates a company is willing to offer you before you ever set foot in a dealership. That way, you aren’t pressured to make a decision on the spot.
Most Canadians only consider one lender
A look at the FICO study reveals that 70% of Canadians only consider one car loan lender before they purchase their vehicle. That compares to 49% of respondents globally. It’s clear that comparison culture is alive and well in other parts of the world, but absent in Canada.
Perhaps part of the issue is that Canadians are apprehensive about using online resources. FICO found that only 17% of Canadians would consider using an online application process when getting an auto loan, compared to the 27% global average.
“More than any other market, Canadian consumers are trusting dealerships to make them an offer, and in most cases, they don't feel the need to shop around,” said Kevin Deveau, vice president and managing director, FICO Canada.
The FICO survey asked 2,000 adult consumers in nine countries about their auto financing habits. The countries included Canada, Australia, Germany, the U.S., Mexico, Chile, New Zealand, Spain and the UK. Respondents were between the ages of 18-64.
For us, this data suggests one thing: Canadians aren’t getting the best deals on their car loans — and they’re likely paying more interest and fees than they have to. Our recommendation? When getting a car loan, compare the market.