Nearly half of drivers believe they have been over-charged and mis-sold finance and insurance products when buying from a dealership.
Research from the Institute of the Motor Industry (IMI), the professional body for the automotive sector, has found that finance and insurance products are added to 60% of all car purchases.
But 45% of 2,000 drivers said they felt pressured by a salesman to buy add-ons when they most recently bought a car from a dealership or garage.
The Financial Conduct Authority (FCA) has implemented changes to the Consumer Credit Act which aims to stop drivers being mis-sold finance and insurance products.
Yet 42% of car buyers said they had avoided a dealership due to the lack of trust.
According to the IMI research this mis-trust could be avoided, with 64% saying buying a car would be easier if the people they were buying from were members of a regulated body.
Over half said they would feel more comfortable making financial decisions relating to a car purchase if additional measures were in place to ensure they weren’t overcharged
Steve Nash, IMI chief executive, said: “Our research highlights that nearly two thirds (63%) of car buyers find the process stressful, therefore it’s our role to restore consumer confidence by improving the car buying experience.
“This research however does underline why it’s the right time for the retail motor industry to take more responsibility to ensure anybody selling finance and insurance products has the correct training to be able to help drivers decide whether or not they would like to buy these extras when purchasing a vehicle.
“The IMI F&I Accreditation helps safeguard customers by ensuring the salesman is giving accurate and truthful information. It also gives the car salesman the knowledge to be able to identify which products, if any, are suitable for that individual customer. This training is just one step further in ensuring the industry is providing a good quality and honest service.”
Sabina Hegarty, Calibre Group Solutions managing director, said: “It’s clear from the research that perception of our industry continues to be a barrier for customers. The only way to change this is to 'improve from within' by developing and upskilling our people to ensure the advice they give is fair, transparent, consistent and in the best interest of the customer.
“Savvy shoppers of today are looking for more than just a good price.
"F&I specialists on site need to actively improve their approach, leading to better customer satisfaction and ultimately resulting in greater consumer confidence. It certainly won't happen by itself.”
IMI research highlights:
- 60% bought F&I products or services when buying a car
- 45% felt pressured to buy add ons/additional extras
- 33% felt they had been over-charged when purchasing a car and/or insurance
- 53% said they would feel more comfortable if measures were in place to not be over charged
- 76% felt they couldn’t trust a car salesman
- A car salesman is the third most untrusted profession
- 37% were more likely to take out F&I products/services if the dealership was accredited by an industry body
- 64% felt buying a car was a stressful process
- 64% buying a car would be an easier process if drivers were buying from were a regulatory body
- 42% avoided a car dealership due to lack of trust