Used car buyers are 11 times more likely to enter personal details into dealers’ online portals if doing so does not leave a footprint on their credit record, according to research from iVendi.
Research was based on applications made through iVendi’s platform through Q4 2017.
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James Tew, iVendi chief executive officer, said that being transparent about the footprint online credit simulations leave behind – i.e. whether they affect a customers’ credit history, even when simulated, or not – was crucial about future successes in online motor retail.
“Soft” credit searches do get recorded in an applicants’ search history, but in contrast to “hard” ones, they are not visible to lenders when examining a customers’ credit application.
He said: “An increasing number of customers are becoming better informed about how a hard search can potentially damage their credit rating, especially if they make a number of applications in a short period of time.
“Yet very few motor finance providers provide the opportunity to make a soft search online. This is both counterproductive and also, in our view, is simply not fair on the customer, who is often just going through the process of looking for the best deal.
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By GlobalData“Fundamentally, the act of making a number of applications in a short period of time should not make it more difficult and potentially more expensive to access motor finance in the future unless there is good evidence that the applicant is a poor risk.”
Tew exhorted players in the industry to adopt web technologies that allowed for “soft” credit searches that would not affect a customers’ credit score. He cited iVendi’s own Car Finance Checker tool as one such technology.
“A rapidly increasing number of people are buying motor finance online and dealers should be meeting that need by choosing the right technology,” Tew added. “Certainly, we know that finance applications increase dramatically where soft searches are provided.”
