Low monthly payments and reliability are driving automobile purchasing and leasing decisions among adults according to a new PenFed Auto Financing Survey. The national survey conducted by Morning Consult focuses on financing priorities, buying preferences and car buying services.
Key findings include:
- Almost half of adults (46%) rank monthly payments as the most important element of an auto loan.
- Most adults (58%) who prefer to lease an automobile do so for a lower monthly payment.
- 41% of adults surveyed say the reliability of their current automobile is the biggest factor leading to their decision to purchase or lease a new vehicle. Three in four adults say the reliability (75%) and price (73%) of the automobile factor into their decision to buy or lease a specific model.
- Most adults prefer to finance automobiles through credit unions (25%), over banks (20%) and dealerships (16%).
- 41% of adults would consider using a car buying service.
“As auto industry trends push the limits of affordability, it’s no surprise that consumers prioritize a low monthly payment when making a new buy or lease decision,” said Ivan McBride, Vice President of Auto Lending Product Sales at PenFed Credit Union. “The best way to ensure a low monthly payment is to explore all financing options – including credit unions and innovative new programs like PenFed’s upcoming Payment Saver Plus Program.”
The survey found that 41% of adults would consider using a car buying service. PenFed has seen automobile purchases via its TrueCar partnership rise over the last year. Importantly, the PenFed survey found consumers named preferring to do their own research and concerns around expense are the top reasons for not using a car buying service.
“The use of car buying services is a rising trend in the auto industry, and our data points to a growing interest in these programs,” said McBride. “Education around car buying services will be the main driver for expanded use as consumers are not aware of how helpful these services can be and of the low-cost options out there. As people continue to learn how platforms like TrueCar are a great research resource and benchmarking tool for auto pricing, we will certainly see an uptick in usage.”
PenFed Car Buying Service, powered by TrueCar, offers PenFed members cash-back offers from select manufacturers, rates as low as 1.49% APR on new cars, up to $1,000 in auto deductible reimbursement for buyers and an average member savings of over $3,300 off Manufacturer’s Suggested Retail Price (MSRP) on new cars*.
The PenFed survey results come ahead of PenFed’s launch of an innovative new PenFed Payment Saver Plus Loan powered by Auto Financing Group (AFG) that provides financing with a structure similar to leasing that allows for lower monthly payment options on new and up to five-year-old used vehicles. The program provides more flexibility as members can walk away from the balloon balance, refinance the vehicle or buy it outright if they prefer to purchase the vehicle.
The PenFed Auto Financing Survey was conducted from March 26-29, 2019, among a national sample of 2,201 adults. The interviews were conducted online and the data weighted to approximate a target sample of adults based on age, race/ethnicity, gender, educational attainment, and region. Results from the full survey have a margin of error of plus or minus 2 percentage points.