Sophus3 Whitepaper | The Digitalisation of Automotive Finance – Part 4
The Digitalisation of Automotive Finance
Part 4: Finance pages survey - are they 'fit for purpose'?
So far in this whitepaper we have examined how the finance offer around a car has become an important, if not the central factor, in guiding a consumer’s purchase decision. We have also reiterated some familiar facts about the use of online within the consumer’s journey. Generally, that journey can be characterised as short, unsentimental, almost brutal.
In this section we want to review in more detail how finance information is presented on car brand websites given its new found importance. Is finance information given prominence, can it be easily understood, is it accessible at any point along the customer journey? Can the site visitor interact with the brand to more fully understand their options, can they personalise their choices according to their own budgets and preferences?
To find out, sophus3 conducted an audit of 40 car brand websites across the ‘Big 5’ European markets: Germany, the UK, France, Italy and Spain. We chose a selection of budget, volume and premium brands to review and rate the experience of someone visiting with the purpose of buying and financing a car. The review was carried out in September 2017. The survey was conducted on each site by a member of the eDataXchange team, who could be classified as an ‘experienced’ online visitor. Through their work in the automotive sector, they are familiar with the content and structure of these sites. Even so, a time limit for the survey visit of one hour maximum per site was set. This means that in some cases if information the survey was seeking could not be found by our researcher it was adjudged to be ‘missing’. However we accept that on occasion the information may have been hard to locate rather than totally absent from the site.
The survey looked at four key areas. Firstly it assessed the prominence and accessibility of finance information. Then it examined whether there were tools to calculate and adjust the terms of different finance offers, to personalise them. Thirdly it looked at the supporting information to see how well the complexities of financial information were explained through glossaries, FAQs and other subsidiary information. Lastly the survey assessed the capability of the site to allow the visitor to interact directly with the brand to ask finance specific questions.
The findings are discussed below and the result for each question expressed as an average across the ‘Big 5’ markets. A more detailed version of the findings containing a breakdown by individual markets will be made available to eDataXchange members in the near future.
1. Prominence and Accessibility
a. Are finance terms given prominence over price on the site homepage?
If a car brand is going to take on its competitors through offering attractive finance terms then you would expect these to be given prominence from the first moment of consumer contact. Yet surprisingly the survey found many examples where even ‘budget brands’ – with an exceedingly good story to tell about the affordability of their products – appear reticent to broadcast this fact. Most brands feature the car that they have most recently launched, or is currently the subject of their most intensive campaign activity on their homepage, but some still appear coy about making a clear and simple presentation of the available monthly terms. They either make no mention of money at all, or show the total MSRP which is only relevant to a small and declining number of cash buyers.
Of the the sites we reviewed, 50% showed the ‘offer’ price of their cars on the front page rather than just the retail price or no price information.
b. Are there links to ‘finance’ in the site’s top-level navigation which are obvious and persistent?
Including ‘finance’ or ‘offers’ in the main navigation menu of a site makes one-click access to this information possible from any page on the site, assigning the subject clear importance, and also maximising click-throughs to financial information. Since visiting the finance or finance pages are one of the most obvious ways consumer identify themselves as engaged, all car brand sites would benefit making it easier for their visitors to do so.
The majority of websites, 58%, that we looked at did include ‘finance’ or ‘offers’ links – sometimes even both – in their top level navigation.
c. Does the site retain all of its functionality on a mobile device?
Across the Big 5 European markets 60% of visits to car sites are now made on a mobile device, the huge majority of these are on a cellphone with just a few percent of visitors making use of larger, tablet type devices. It is therefore vital that the content of websites is legible on these smaller screen devices and that any critical functionality, such as calculators and configurators, transfers to the different browsers and operating system of these devices. Our survey of car brand’s finance pages included loading and viewing these pages on a mobile device and checking legibility and key functionality.
Nearly a quarter of the sites tested – 22% – did not work correctly on a mobile device.
2. Finance Calculator and personalisation
a. Can you personalise finance options through a finance calculator?
We see a finance calculator as crucial functionality to offer to prospective car buyers as it allows them to completely personalise that offer to their own needs. A calculator, as opposed to a page that collates a series of representative offers, allows the user to look at the individual vehicle derivative they have in mind, enter their deposit, likely mileage and the period of use they want to cover and see the resultant outcome in terms of the payments they will need to make. A true finance calculator is effectively generating a personalised finance quote on the fly, subject of course to final verification through a credit check.
80% of sites surveyed offered a fully functional calculator for visitors to produce a personalised finance example.
b. Can you calculate from ‘budget’ as well as from ‘price’?
For the consumer a more vital question than “what does it cost?” is often, “what can I afford?”. Does the finance calculator allow the user to begin from their own budget so as to filter the options available to them in terms of vehicle model, deposit, monthly payments etc.?
Only a small minority of sites, just 30%, offered some kind of ‘set my budget’ functionality within their finance calculator.
c. Is the finance calculator accessible within the product configurator?
As we noted in the previous section, the finance terms available on a car are a key driver in the purchase decision and consumers now want to explore product and finance information simultaneously. As the buyer refines their choice can they step easily between exploring and understanding the features of the car they would like and the finance package that could make acquisition possible? We looked at how many sites offered a direct link between the product configurator and finance information.
A credible 69% of sites allowed the visitor to access a finance calculator from within their product configurator.
3. Consumer Information & FAQs
a. Are there supporting explanations of how finance works - FAQs, glossary of finance terms, buying guides etc.?
Cars are relatively complex products with a host of technical features that can be difficult to understand. Most brands have become skilled at providing clear and helpful explanations of the features of their cars in the form of glossary type documents or short, instructional videos and animations. Finance information is perhaps just as complex but also a subject for which people have little enthusiasm. Yet it is imperative that brands ensure that finance terms – and the consumer’s consequent liabilities – are spelt out clearly to avoid a later accusation of misselling. We tested the sites to see if there was specific help/documentation offered from the finance pages and looked specifically if common finance related acronyms were explained.
On average 61% of sites had direct links to financial ‘help’ information. However we found huge variation by geography. In Italy for example only 40% of sites offered adequate documentation of finance terms. In many cases the information offered was barely satisfactory with explanations of different terms often in dense, legalistic language.
b. Does the site explain what a PCP is?
Personal contract purchase (PCP) is currently one of the main ‘vehicles’ consumers are using to obtain a new car. It differs from previous and perhaps more familiar methods of financing a car in that at the end of the contracted period ownership of the car does not automatically pass to the customer unless they make what can be a large final ‘balloon’ payment. We examined each site to see if an explanation and differentiation of PCPs was available.
Under half of the sites surveyed (42%) offered an explicit definition or explanation of what a PCP is.
c. Does the site explain what APR means?
The Annual Percentage Rate (APR) is the annual cost of borrowing money from a lender. The APR takes into account all the costs of the loan including interest and administrative fees. APR therefore expresses the ‘real’ cost of borrowing money and the way it is calculated is, in most markets, clearly stipulated through legislation and monitored by financial authorities so that consumers can compare finance offers in a like-for-like way.
Despite the display of the APR on a loan being required in at least the ‘small print’ of a car finance offer, less than a third of all sites (30%) actually clearly explained to their visitor what it means or how this is calculated.
d. Do finance offers carry a ‘HEALTH WARNING’?!
Again, given concerns about how finance is sold and the need to make clear to the customer their responsibilities to meet payments, it would seem sensible for published finance offers to include a clear statement of the liabilities of the loanee.
Whilst most brands do include a summary of, or link to, the terms and conditions surrounding a loan below any explicit finance offer, these are often, quite literally, in ‘small print’ and, again, many utilise opaque legal language. Only 33% of brands include what might be termed a clear health warning alongside finance offers on their sites.
4. Interaction with the customer
a. Is there a ‘Request a quote’ feature?
Asking for a quote to buy a car is a clear, positive action on the prospective buyer’s part. We reviewed each site to check if the brand explicitly offered to provide visitors with a personalised quote on request.
Surprisingly perhaps, only 51% of the sites reviewed had a ‘request a quote’ link where a prospective buyer could state their interest/requirement and leave their contact details.
b. Is there ‘Live chat’ access to finance expertise in real time (a ‘genius’ function)?
The ‘product genius’ – a trained expert who can be contacted in real time for advice and assistance – is a concept that has spread from Apple computer stores into car retailing. Most recently those OEMs offering ‘Click to Buy’ on their websites now rely heavily on the use of live chat with a product specialist to reduce the impediments within the online purchase process. Our survey looked to see if live chat – one-to-one text or call interaction between a brand representative and an individual customer – was offered on finance pages. (Declaration of interest: Sophus3, the publisher of this paper, offers live chat as part of our portfolio of digital services to automotive brands.)
Currently 39% of the sites reviewed here offer some form of live chat within the finance area.
c. Are there other ‘Call to Actions’ from the finance pages?
To work effectively as a sales funnel it is important that a car brand’s website does not create dead ends where a visitor’s engagement is allowed to peter out. We looked specifically at finance pages to see if, once a finance offer was made to, or calculated by, the visitor that they were encouraged to engage further with the brand and its products. Such ‘calls to action’ (CTAs) can include the offer of a brochure download, encouragement to find a local dealer, or the offer of a test drive appointment.
The survey found a high percentage of brands (87%) wisely included further CTAs on their finance pages.
d. Can you apply for finance online through to approval of credit?
Helping online consumers understand their finance options is one thing, actually enabling them to apply for finance online, or at least commence the process, is a very different undertaking. The small number of brands that currently offer ‘Click to Buy’ car purchase – a group which includes BMW, Hyundai, Jaguar Land Rover and Peugeot-Citroen – of necessity have to be able to conduct the whole finance application/approval process online. Selling the brand’s finance to a customer not only provides more ‘lock in’ to a vehicle purchase from that brand, but it also generates additional value from the sale of the finance product itself.
As yet, few brands are offering end-to-end finance applications online – only 15% of the sites we looked at enabled customers to do this.
With Finance increasingly at the start of the consumer‘s online buying journey, the presentation of finance information needs to catch up with that of product information on car brand sites:
- Improved accessibility, visibility and user experience with linkage from the home and product pages to ‘finance’
- Better usability on mobile devices (which deliver the majority of visits)
- Seamless integration within the main brand site (no diversion to or split between domains or brands)
Consumers expect a finance calculator that allows complete personalisation:
- Integrated within both the finance and product funnels
- Flexible so that they can start from their own budget or price points
- Designed so that their options can be compared, saved and shared
Brands need to remember at all times that consumers’ attention spans are low, expectations high and the barriers to switch brand or site minimal:
- Guide customers through the site to maximise the chance of journey completion (a call-to-action or finance application)
- Highlight key information and explain options and risks along the way
- Offer human interaction to ease the path whether via call centres or Live Chat
A starting point for car brands’ digital managers should be to review their own site against the checklist of questions our survey asked and also to begin benchmarking their capabilities against those of their competitors.
Brands should look at where their failings can be simply fixed through better content and design dlievery, or whether there are organisational ‘chinese walls’ which hamper the delivery of integrated product and finance information.