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A fresh report from the royal commission has highlighted that only 16 per cent of car buyers use a broker to secure financing.
The royal commission has released a background paper detailing some of the features of car financing in Australia.
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The paper cites ACA Research, which noted that, based on its survey data released in 2016, around 33 per cent of buyers browsed a finance broker website and 16 per cent of buyers used a broker to secure financing.
ACA Research results also showed that consumers who obtain car loans spent time considering their options before visiting a dealership; 81 per cent of consumers researched finance options online; 76 per cent of consumers considered their finance options prior to test driving a vehicle; and 51 per cent of consumers chose a lender prior to visiting a dealership.
The paper noted that the delinquency indices for motor vehicle loans have increased since 2012 but remained at low levels in absolute terms.
“The 30+ days past due arrears rate has increased to 1.6 pr cent of loans by end June 2017, and the 60+ days past due arrears rate has increased to 0.8 per cent of loans by end June 2017,” the paper said.
“Both indices, according to Fitch Ratings, have reached ‘record quarter-end levels’. Fitch expects increased losses in the September quarter 2017, reflecting rising arrears over the past nine months. However, Fitch Ratings notes that ‘losses remain low’.”
Consumer credit and mortgage lending, in particular, will be one of the areas to be probed by the royal commission.
The first round of hearings considered aspects of the treatment of consumers by banking and financial services providers in connection with a number of credit products, including residential mortgages, car finance and credit cards.
The commission will also consider the arrangements and practices of banking and financial services providers and their intermediaries.
