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How Shifts in the Auto Buying and Finance Environment Impact Consumer Behavior

by Michael Jennings Senior Vice President

and Glenn Staada Senior Vice President

As consumers are considering inflation, higher interest rates, and another likely tumultuous election year, shopping journeys and experiences have shifted in many product categories, particularly for large purchases such as cars, trucks, and SUVs.

From the rise of digital platforms to the changing dynamics of loan structures, the current environment is reshaping the way buyers approach the automotive shopping and financing process.


Four auto finance trends we’re watching closely.

1. Your customers are rethinking the way they make purchases.

Recent data from Experian shows that the ways in which consumers are paying for new and used automobiles is an area that the automotive financing industry is taking a closer look at. For example, auto loans through traditional banks have declined (35% in 2021 to 26% in 2023) with captive financing taking on a larger role (from 18% in 2021 to 24% in 2023). The historically high-rate environment that we are currently experiencing, along with the rise of subprime loans and shorter-term leases certainly impacts the way consumers make decisions on where, what, and how they will buy. With this, it’s important to understand the relative weighting of factors pulling consumers into dealerships.

2. Financing trends are changing the customer journey.

For some consumers, the convenience of using captive financial institutions, particularly when interest rates are competitive, may alter how they think about their choices during the shopping process. A model that may be a marginal contender in a consideration set could suddenly rise to be a top selection with the right financing terms and the convenience of mitigating the need to find a suitable lender.

3. The current climate may impact long-term customer loyalty.

Consumer willingness to take on larger loan amounts, often including a negative equity situation, can be beneficial to the category but caution is advised as defaults could rise significantly. Although seemingly anti-growth in the short-term, financial education and guidance from the industry for those considering longer terms, larger amounts, and/or trading up with negative equity can, with supporting positioning, benefit brands in the long run.

4. New financial regulations in China may signal an opportunity.

Another growth opportunity in lending stems from changes in the minimum down payment requirement for auto purchases in China. Now, lending institutions in China can set their own terms. This change aims to spur new car purchases. Optimizing offers that are most salient to consumers in this market is recommended.


Insights can help you address customer needs along their journey.

These industry developments are being leveraged by auto dealers and manufacturers as well as lenders who are reviewing current financing strategies and offerings and introducing changes that will maximize growth — but we believe more could be done.


The need for Customer Journey research.

Amidst all these changes, it is critical for OEMs, dealers, and auto financers to understand the most current intricacies of the consumer journey. A comprehensive customer journey study helps businesses gain valuable insights into the various touchpoints and decision-making processes that influence purchasing behavior, in different segments.

By mapping out the entire journey from initial research to post-purchase support, businesses can identify pain points, opportunities for improvement, and areas where they can differentiate from their competitors.

Critically, for lenders, this type of research pinpoints changes in attitudes and behaviors because of the high-rate environment that we find ourselves in.

A fresh look at customer journey research enables brand teams to tailor their marketing and sales strategies to better meet the evolving needs and expectations of consumers.”


A fresh look at customer journey research enables brand teams to tailor their marketing and sales strategies to better meet the evolving needs and expectations of consumers. Mapping the perfect communication to the perfect moment-that-matters provides in-the-moment optimal brand performance.

This work also helps you understand the channels and platforms where consumers seek information, so you can allocate resources more effectively and ensure you are connecting with customers at critical touch points along the journey with messages that resonate with them.

Want to understand more about your changing customer journey? Contact us to learn more about how insights can help you reframe your growth goals.