Conflicting information on the digital record of used cars means that any finance quotes supplied for them could be incorrect, says iVendi.
From a sample of around 140,000 vehicles being sold online, iVendi identified more than 11,000 as having a potential problem.
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This could result in incorrect quotes being produced on a typical PCP quotation – with the error potentially carrying through to any finance deal that is concluded for the vehicle.
The digital record of a vehicle will include a physical description of the car and a taxonomy code from an industry data provider. This is used as a standard method of identifying a car by the finance company. The taxonomy code is usually allocated by a person making a visual check, but increasingly the market is using automated systems, according to iVendi.
James Tew, chief executive of iVendi, said: “The problem is that, by its very nature, vehicle taxonomy is complicated and it is very easy for both humans and software to get the taxonomy code wrong. The majority of errors concern numbers of doors, transmission types and trim levels and, while these are of some concern, they are probably of limited impact on the value of the vehicle or the finance quote.
“In other cases though, the mistake is much more fundamental. It is not too difficult within the data we have compiled to find complete misidentifications such as prestige cars that have been listed as panel vans.”
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By GlobalDataTew added that the wrong code results in the wrong valuation and the wrong forecast residual value for the PCP arrangement.
“This can have a positive or a negative effect from a financial point of view but it remains an error and one that can have unpredictable results. Of course, these mistakes also potentially have implications from an FCA and ASA point of view, which is something that could have serious implications for retailers.
“Everyone knows that this happens but there is a general assumption that the errors are relatively rare and quite nuanced – just the wrong trim level,” continued Tew. “What we have found is that the problem is quite widespread and potentially more impactful.”
