BMW Group Financial Services has questioned over 1,000 car buyers across the UK on their knowledge of motor finance.

Findings show that British motorists are often confused by motor finance jargon and would not be able to explain some of the most commonly used terms with confidence.

Two thirds of those surveyed said they would not feel confident explaining terms like annual percentage rates, excess mileage, deposit contributions or unsecured loans.

Personal contract hire was deemed to be the most confusing term – only 18% of drivers were able to explain its meaning. Less than one in five motorists were unable to explain the terms personal contract purchase (19%), minimum future value (19%) or gap insurance (19%).

These findings are despite the fact that new car finance has increased by 11%* compared to the same month last year, with this trend set to continue to grow.

Even though 77% of new car sales are now made on dealer-sourced finance* over 28% of respondents did not feel able to explain any finance jargon.

General Manager of Group Customer Strategy, BMW Group Financial Services, Suzanne Gray, said;

“It’s important for buyers to know exactly what they are committing to when they sign up to finance contracts. These results go a long way to illustrating the state of the nation’s knowledge about finance.

“The results of this survey are very timely for us. They show that simplified motor finance is long overdue and we are responding to a public need for clear terms.

“That’s why we’ve simplified our financial packages. Whenever someone walks into any BMW or MINI Centre, the core finance package will be the same. Buyers will get the full breakdown of the contract, not just monthly charges, and there will be no set-up fees. As well as this, our dealers continue to receive training to help customers better understand the jargon around motor finance, making the process more straightforward and user friendly for everyone.”

BMW Group Financial Services has pledged to simplify motor finance, with core packages for all models; the only variance on BMW’s motor finance pledge will be if different retailers make promotional packages available.

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