Cars in a row

Barclays pushes its personal loan for auto finance

The personal loans dashboard for the second quarter of 2014 was released recently, with plenty of activity among loan providers.

According to the latest insights in relation to the car buying industry, new car sales in UK have been the highest in 2013 since 2007. With increasing demand, the upward momentum is expected to continue. Barclays has capitalised on this trend and re-directed its personal loans offering towards those customers looking to own a new car. This quarter we found Barclays strategically positioning its personal loans product as a means to obtain auto finance via its website and social media pages. Furthermore, the bank now features an infographic on its website with facts on car buying habits including tips and tools to plan and budget for a car purchase. The pictorial provides related statistics and advice covering three topics: thinking of buying a car, buying a car and running a car. The infographic also encourages customers to use the Barclays loan calculator to plan their car purchase budget through a loan by getting an estimate of their monthly repayments and the applicable interest rate. Barclays was also found subtly promoting its loan products to buy a car on their Facebook page through various posts featuring images and questions reminding customers of their joyful experiences of owning or driving a car.

MapaResearch-Article-BarclaysLoans-Jun14

The evidence of a booming car buying market was also established by the Sainsbury’s Bank’s recent car buying index ,which measures customer intention to purchase a car. According to the survey, 23% of adults were considering buying a car before September this year, suggesting a 5 percentage point increase over the next 6 months compared to the previous survey period between September 2013 & February 2014. Similar to Barclays, Sainsbury’s Bank was also found promoting its personal loans product for car finance. Text promoting its loan product can be found within the press release stating the latest survey findings.  The page also features a switching calculator that can be used to gauge the savings that can be made by switching an existing loan to Sainsbury’s Bank towards the end of the press release.

This quarter, with regards to functionality changes, multiple providers were found making changes to their loans calculators. While First Direct simplified the look of its calculator, HSBC enhanced its calculator with the inclusion of sliders to enter loan amount and tenure. An expandable extended tab with a quick budget calculator has also been added to the personal loans calculator on the HSBC loans product page. The quick budget calculator gives an indication of whether the customer has an available budget to accommodate a monthly loan repayment. M&S Bank, on the other hand, has included additional fields to its loans calculator that lets users select if they would want to calculate monthly repayments or loan amount from a drop down menu. Another field allows users to select the option of a payment holiday at the onset of the loan and view calculator results accordingly.

With a UK economy steadily moving past the pre-recession levels reflecting growing consumer confidence, people are now regaining financial assurance to take on debt to fulfil immediate personal aspirations or expenses. While loan providers have been competing on rates mainly, innovative marketing and positioning of their product around momentary life situations requiring possible credit could potentially become the differentiating factor.

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