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Opinion 05 June 2024
Koray Öztopçu (Garanti BBVA Consumer Finance director)

Consumers prefer innovative financing from automakers

Consumer behavior is evolving when it comes to purchasing a car. This shift is especially evident among younger generations, who prefer online platforms and innovative financial products from their favorite automotive manufacturers over brick-and-mortar stores and traditional financial products.

Overall, all consumers are turning more to online platforms for car purchases. However, as Generation Z (those born between 1997 - 2012) will quickly be reaching the period in which those in this generation reach their highest lifetime income, the market is focusing on their preferences to ensure their needs and expectations are met.

Research shows that Generation Z is environmentally conscious and prefers brands that align with their core values around sustainability, inclusivity, and circular innovation. They prefer to make purchases on mobile devices (74 percent) and extensively research online prior to purchasing (47 percent). The same applies when buying a vehicle, and they express a preference for electric vehicles. This generation values convenience and innovation and therefore seeks financing from automotive companies when making the purchase. Their brand loyalty depends heavily on the financial advantages and rewards offered.

Generation Z prefer to make purchases on mobile devices (74 percent) and extensively research online prior to purchasing (47 percent).

As a result, the young consumers are more likely to look for automotive companies that offer the convenience of low cost, flexible financing options when purchasing an electric vehicle. Electric vehicle financing offered in collaboration with financial institutions provides consumers lower interest rates and other incentives on their purchase. In fact, it has been demonstrated that consumers return to the app or website of automotive companies partnering with financial institutions three or four times a month, and make a purchase once a month. In addition, receiving financing at the point of sale has been proven to greatly increase customer satisfaction.

The future of finance lies in adapting to and embracing the preferences of a new generation of tech-savvy consumers. While the shift in preferences speaks to a clear transformation underway among financial institutions, more flexible, customized and technologically advanced solutions must be integrated in order to remain relevant and competitive.