What you need to know

While most car buyers consider vehicle financing to be one of the most important parts about buying a car, even more feel that it is a confusing and overwhelming process. Financial institutions (eg banks, credit unions or automotive loan companies) seeking to attract customers through vehicle financing options can do so through competitive offers and by providing educational materials and having tools set in place to help customers seamlessly navigate the process.

Key issues covered in this Report

  • The impact of COVID-19 on consumer behavior and the vehicle financing market

  • Understanding how the lending process evolved during the 2008 recession and what this means for during the pandemic

  • Ways for financial institutions to lift the burdens that come with financing a vehicle

  • Auto loan benefits most important to consumers

Definition

For the purposes of this Report, the vehicle financing process includes but is not limited to, automotive loans through a financial institution such as a bank, credit union or automotive loan company; paying full amount in cash or paying by credit card.

This Report builds on the analysis presented in Mintel’s Vehicle Financing – US, May 2017, April 2014 and July 2013.

COVID-19: US context

The first COVID-19 case was confirmed in the US in January 2020. On March 11, the World Health Organization declared COVID-19 a global health pandemic, and on March 13, President Trump declared a national emergency in the US.

Across the US, state-level stay-at-home orders rolled out throughout the months of March and April remaining in place through May and in some cases June. During this time, referred to as lockdown, nonessential businesses and school districts across the nation closed or shifted to remote operations. OEMs and financial institutions began improving vehicle financing offers in an effort to support consumers financially and entice them to continue their car buying process.

During re-emergence, all 50 states have relaxed stay-at-home orders and allowed businesses to operate with varying levels of social distancing measures in place. The continued spread of COVID-19 infections has driven some states to slow down or reverse course on reopening plans. The increased focus on and offering of vehicle financing options continue as many consumers continue to limit and prioritize their spending – which for some may include putting off a car purchase.

Mintel anticipates the US will remain in a state of flux through 2021, until the vaccine is more widely administered.

Back to top