MEDIA RELEASE
18 October 2023
1 in 2 Aussie SMEs don’t trust motor dealerships offer competitive financing
- 56% of businesses lack confidence that dealerships provide competitive financing
- The lack of confidence is highest among micro businesses, at 66%
- Just 3% of SMEs would automatically accept dealer finance without seeking other options
SMEs make up 96 per cent of Australia’s businesses and employ 12.36 million people[1], making it imperative to the Australian economy that they have access to good financing options to support their operations and growth[2]. With commercial vehicles making up one in four cars sold this year[3], new research reveals that SMEs seek good-value vehicle financing and 56 per cent do not have confidence in loans offered by dealerships.
The figures have been revealed in a new survey of an independent panel of 202 directors and decision-makers of SMEs commissioned by business loan comparison site Small Business Loans Australia. The survey asked respondents if they would accept financing from a motor dealership or shop around for a better deal, and how they would seek alternatives. The full survey results, including breakdowns across the major states, can be found here: https://smallbusinessloansaustralia.com/trust-business-car-dealership/.
Just 44 per cent of respondents would be very confident that a dealership would offer them financing with one of the lowest rates and fees on the market.
Micro businesses are the least likely to trust motor dealerships, with 66 per cent expressing doubts. Whereas medium-sized businesses, while still cautious, show slightly higher trust, with 47 per cent expressing doubts. The finding suggests that the size of the business can typically influence perceptions of dealership financing, and most likely also attribute to the level or type of financial facilities they have access to.
The survey also asked business owners and decision-makers whether they would research financing options, or simply take the dealer finance offered to them when purchasing a vehicle. Understandably, an overwhelming 97 per cent of businesses indicated that they would conduct their own research before accepting a dealership loan.
One third (33%) would compare the dealer loan with a loan from their own bank, 28 per cent would shop around for a loan through online loan platforms and comparison sites, and 25 per cent would go to a finance broker to enable them to compare interest rates and fees across multiple lenders. A further 11 per cent said they would shop around by approaching the top banks. Only 3 per cent of all businesses would simply take the loan offered by the dealership.
Alon Rajic, Founder and Managing Director of Small Business Loans Australia, says: “Our research offers valuable insights into how Australian businesses perceive and approach financing when purchasing vehicles. This is important because one quarter (26%) of new vehicle sales in Australia from January to September this year were commercial sales[4].
“Our survey suggests that businesses are keen on making informed financing decisions and are likely to conduct their own research and compare options before committing. When purchasing vehicles, competitive interest rates and minimal fees are key factors influencing businesses' decisions. These aspects play a crucial role in determining where businesses choose to secure their financing, proving a good deal always wins out.”
The full survey results, including breakdowns across the major states, can be found here: https://smallbusinessloansaustralia.com/trust-business-car-dealership/.
ENDS
For more information, please contact:
Courtney Trewin | 0420 211 251 | ctrewin@theideassuite.com.au
Evie Maslen | 0432 485 901 | emaslen@theideassuite.com.au
Advice Disclaimer
This article is intended to provide general information only, and not financial advice. Before acting on any information in this article, you should consider your individual and business circumstances, and seek independent and professional legal, financial, taxation or other advice to help you determine whether these actions are appropriate for your needs.
About Small Business Loans
Small Business Loans Australia (smallbusinessloansaustralia.com) is an Australian comparison website providing Australian small and medium business owners with information on the different types of financing options and loans offered by Australian lenders, and how alternative lenders differ from banks. Small Business Loan Australia works with more than 30 Australian lenders and provides loans from $5000 to $1 million. For more information, visit smallbusinessloansaustralia.com)
Key Facts:
- 56% of businesses lack confidence that dealerships provide competitive financing
- The lack of confidence is highest among micro businesses, at 66%
- Just 3% of SMEs would automatically accept dealer finance without seeking other options
Contact details:
Courtney Trewin | 0420 211 251 | ctrewin@theideassuite.com.au
Evie Maslen | 0432 485 901 | emaslen@theideassuite.com.au
