866-997-4948(US-Canada Toll Free)

AUTO FINANCING - CANADA - AUGUST 2018

Published By :

Mintel

Published Date : Aug 2018

Category :

Banking

No. of Pages : N/A

Dealerships have a clear point-of-sale advantage in the financing process and satisfaction levels are high, solidifying their place as a convenient one-stop shopping experience.

Table of contents
OVERVIEW
Regional classifications
Income
Scope
EXECUTIVE SUMMARY
The issues
Most Canadians own at least one vehicle
Figure 1: Number of vehicles in the household, May 2018
Cash and dealership financing are the most popular payment methods
Figure 2: Payment methods used for last purchase, May 2018
Low monthly payments and recommendations are the top influencers
Figure 3: Decision factors influencing financing, May 2018
Overall satisfaction with dealership financing is high
Figure 4: Satisfaction with dealership financing, May 2018
Affordability factors are most important
Figure 5: Interest in financing incentives, May 2018
The opportunities
Younger consumers more reliant on recommendations
Figure 6: Decision factors influencing financing, May 2018
Familiarity is a key influencer for older consumers
Zero and low monthly payments are of more interest to women
Figure 7: Interest in financing incentives (select), by gender, May 2018
Newcomers and overwhelmed consumers represent a clear opportunity for dealerships to offer expert advice
Figure 8: “Automobile financing options are too complicated to understand” (% agree), by gender, May 2018
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Aging population is not great news for auto financing
A growing population and diversity will boost demand
Improved perceptions of financial health positive for car purchase
Canadian vehicle sales hit the two million mark for first time in 2017
Bank of Canada raises interest rates amidst trade tensions
Impact of the sharing economy on car financing
MARKET FACTORS
Canada’s population is aging
Figure 9: Population aged 0-14 and 65+, as of July 1, 1995-2035*
Aging population is not great news for auto financing
Figure 10: Canadian population, by age, 2016
A growing population and diversity will boost demand for car finance
Improved perceptions of financial health positive for car purchase
Canadian vehicle sales hit the two million mark for first time in 2017
Canadian household debt ratio declines
Bank of Canada raises interest rates amidst trade tensions
Impact on auto financing
Peer to peer lending
Impact of the sharing economy on car financing
Self-driving cars and car financing
KEY PLAYERS – WHAT YOU NEED TO KNOW
AutoGravity and AutoFi take car financing into the digital age
TD Auto Finance partners with AutoGravity
LendingArch’s new rate comparison technology
Axis Auto Finance completes the acquisition of cars on Credit Financial
Fair
INNOVATIONS & INDUSTRY DEVELOPMENTS
LendingArch’s new rate comparison technology
Axis Auto Finance completes the acquisition of Cars on Credit Financial
Credit Karma rolls out a hub to check out the details of your car
Fair
WHAT’S NEW?
AutoGravity and AutoFi take car financing into the digital age
TD Auto Finance partners with AutoGravity
AutoFi partners with Ford Credit and Chase
Tricor partners with AutoFi
Other Fintech Disruptors
MARKETING CAMPAIGNS
Canada Drives: a Fintech solution for car financing
Figure 11: Canada Drives mobile advertisement, July 2018
Mogo offers quick loans
Figure 12: Mogo direct mail campaign, May 2018
RBC unsecured line of credit offer
Figure 13: Royal Credit Line pre-approval email offer, July 2018
Carvana: “The New Way to Buy a Car”
Figure 14: Carvana direct mail campaign, June 2018
THE CONSUMER – WHAT YOU NEED TO KNOW
Most Canadians own at least one vehicle
Cash and dealership financing are the most popular payment methods
Low monthly payments and recommendations are the top influencers
Overall satisfaction with dealership financing is high
Affordability factors are most important
CAR OWNERSHIP AND PURCHASE INTENTION
Most Canadians own at least one vehicle
Figure 15: Number of vehicles in the household, May 2018
Around half of consumers plan to buy a car in the next three years
Figure 16: Car purchase intention, May 2018
Younger consumers have a higher short-term purchase intention
Figure 17: Purchase intention, 18-45s vs over-45s, May 2018
Asian Canadians have a higher purchase intention
Figure 18: Purchase intention, Asian Canadians vs overall, May 2018
PAYMENT METHODS USED
Cash and dealership financing are the most popular payment methods
Figure 19: Payment methods used for last purchase, May 2018
Women more likely to opt for dealership financing though bank/finance company
Figure 20: Payment methods used for last purchase (select), by gender, May 2018
Older consumers more likely to pay cash
Figure 21: Payment methods used for last purchase (select), 18-44s vs over-45s, May 2018
Parents with young children more likely to finance
Figure 22: Payment methods used for last purchase (select), by parental status, May 2018
Limited interest in using line of credit
Figure 23: Attitudes related to financing preferences (% agree), May 2018
DECISION FACTORS
Low monthly payments and recommendations are the top influencers
Figure 24: Decision factors influencing financing, May 2018
Younger consumers more reliant on recommendations
Figure 25: Decision factors influencing financing (select), 18-44s vs over-45s, May 2018
Familiarity is a key influencer for older consumers
Around a quarter of car owners would like flexibility in payments
Figure 26: Preference for financing that allows a flexible payment schedule (% agree), by age, May 2018
SATISFACTION WITH DEALERSHIP FINANCING
Overall satisfaction with dealership financing is high
Figure 27: Satisfaction with dealership financing, May 2018
Older consumers are more satisfied
Figure 28: Satisfaction with dealership financing (% satisfied), 18-44s vs over-45s, May 2018
Older consumers more inclined to believe that dealerships offer the best deals
Key driver analysis
Methodology
Terms of the financing offer is a key driver of satisfaction
Figure 29: Key drivers of satisfaction with dealer financing, May 2018
Clarity of terms and time spent by staff are among attributes that dealerships need to focus on in order to drive satisfaction
INTEREST IN FINANCING INCENTIVES
Affordability factors are most important
Figure 30: Interest in financing incentives, May 2018
Zero and low monthly payments are of more interest to women
Figure 31: Interest in financing incentives (select), by gender, May 2018
Older consumers more interested in zero interest and extended warranty
Figure 32: Interest in financing incentives (select), by age, May 2018
Low monthly, zero down-payment and vehicle return appeal more to lower income earners
Figure 33: Interest in financing incentives (select), by household income, May 2018
Financial incentives impact choice of car for around a fifth of consumers
Figure 34: Attitudes related to financing, May 2018
Newcomers and overwhelmed consumers represent a clear opportunity for dealerships to offer expert advice
Figure 35: “Automobile financing options are too complicated to understand” (% agree), by age, May 2018
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Abbreviations and terms
APPENDIX – KEY DRIVER ANALYSIS
Interpretation of results
Figure 36: Level of satisfaction with dealer financing – Key driver output, May 2018

Make an enquiry before buying this Report

Please fill the enquiry form below.

  • Full Name *
  • Your Email *
  • Job Title
  • Company
  • Phone No. * (Pls. Affix Country Code)
  • Message
  • Security Code *