Majority of New-Car Shoppers Plan to Research Financing Options Online

IRVINE, CA--March 17, 2011: According to the latest Kelley Blue Book Market Intelligence survey concerning car financing, the majority of new-car shoppers (64 percent) who plan to finance some or all of their next vehicle say they will research their financing options online.  Accordingly, Kelley Blue Book today announces two new collaborations with Bank of America and Autobytel Inc.'s Car.com that will provide car shoppers on kbb.com with new options to finance their next vehicle purchase.

The latest Kelley Blue Book Market Intelligence survey also yielded more interesting car-shopper insights related to vehicle financing options.  The study revealed that 66 percent of new-car shoppers indicate they plan to finance some or all of the cost of their next vehicle purchase, while 34 percent say they plan to pay the entire cost of their next vehicle in cash.  Among new-car shoppers intending to finance some or all of their next vehicle purchase, 35 percent say they would choose a 60-month loan, 23 percent say they would choose a 48-month loan, 23 percent say they would choose a 36-month loan, 10 percent say they would choose a 72-month loan, and 9 percent say they would choose a 24-month loan.

Moreover, of those new-car intenders planning to finance their next vehicle, 48 percent plan to use money from a trade-in as a down payment and finance the rest, 46 percent intend to use cash as a down payment and finance the rest, and 6 percent plan to finance the entire cost of their next new vehicle.

In addition, of those new-car intenders planning to finance their next vehicle, 44 percent plan to obtain vehicle financing pre-approval through a bank/credit union branch, 43 percent plan to secure financing at the dealership at the time of purchase, and 6 percent plan to apply for pre-approval through an online vehicle financing company.  Of those new-car shoppers who plan to obtain pre-approval for a loan before proceeding to a dealership, 50 percent say they do it for the low interest rate, 28 percent indicate they do so for control in negotiations, 13 percent do it for convenience, 7 percent are motivated to reduce time spent at the dealership, and 3 percent get pre-approval because they have bad credit.

"In these tough economic times, we're finding that the majority of new-car buyers plan to finance at least some of their next vehicle purchase.  Because of relatively lower monthly payments, five years is the most appealing loan term," said Jack R. Nerad, executive editorial director and executive market analyst for Kelley Blue Book's kbb.com.  "Car shoppers who do their research online on sites like Kelley Blue Book's kbb.com before heading to the dealership are more likely not only to understand what their current vehicle is worth and what they should expect to pay for their next new vehicle, but also what loans and interest rates are available so they can make the most informed purchase decisions."

The latest Kelley Blue Book Market Intelligence survey about vehicle financing was fielded to 324 in-market new- and used-car shoppers on Kelley Blue Book's kbb.com from February 22, 2011 to March 4, 2011.