BuyaCar.co.uk has analysed buyer behaviour when using online car finance calculators and their findings show that buyers would rather pay lower deposits, even if it means raising the cost of their monthly payments.
They found that 54% of buyers chose to reduce the size of the down payment pushing their monthly payments higher when they were ordering a car – and 14% opted to pay no deposit at all. Less than a quarter of buyers decided that lowering their monthly outgoings by increasing the up-front payment was best for them. Just under 10% were happy to stick with the initial deposit payment suggested to them.
Austin Collins, Managing Director of BuyaCar.co.uk says ‘’Without the guidance of professional advisors, the instinct of a majority of car buyers is to push as much of their financial outlay as possible into the future – even if that means higher payments over time.’’
With this in mind, a dealer could potentially increase sales by offering a better balance between deposit and monthly payments, as long as they are upfront about the overall costs. With some buyers not wishing to pay any deposit at all, dealers need to work with a number of finance providers to ensure the customer is getting a competitive quote that is manageable for them.