Shopping for a vehicle comes with all kinds of stressors for consumers, some of which can affect their relationships with dealers and lenders. One reason for anxiety is credit verification.
Some consumers worry their score won't be high enough to qualify them for the vehicle they want. Others worry that simply running their credit specifically will “ding” their credit scores..
Why Are Soft Pulls So Effective Today?
These concerns are why soft-pull credit checks are so effective. A soft-pull credit check is similar to a simple background check. It allows the dealer and lender to review a shopper’s credit score and financial standing, but it does not impact their credit score.
Soft pulls are important to dealers and lenders for multiple reasons. Perhaps a shopper is unsure if they can afford a specific car or truck because of reduced cash flow. A soft pull can alert them to their status if they’re pre-approved before moving forward with financing options.
Soft pulls can strengthen consumer confidence and even move them toward continued shopping in various price ranges. Benefits for sub-prime shoppers including not having their credit “dinged.”
Soft Pulls Are a Necessity With Digital Retailing
So, for all of these reasons dealers and lenders should be offering soft pulls. However, when you consider the era of digital retailing we’re now in, soft pulls no longer are a preference; they’re a must.
A SalesForce survey of 7,000 consumers shows 53% would share personal data in exchange for a personalized shopping experience. This is important because today’s digitized car shopping process is all about personalization.
Soft pulls combined with a “credit-first strategy” are imperative to the success of every dealer and transaction today. A fully personalized digital retailing system requires accurate quoting of monthly payments early on in the shopping process. Everything from vehicle selection, financing, credit eligibility and trade-in valuations can affect a person’s payment composition.
Obtaining credit at the beginning of the digital retailing process ensures a true personalized shopping experience that will help close more deals.
Credit-First and Soft Pulls Work Together
The right credit-first strategy, combined with a soft-pull approach, enables seamless transactions in today’s digitized world. Soft pulls work in concert with the credit-first approach and require neither a customer’s date-of-birth nor Social Security number. With just the customer’s name and address, soft pulls allow an early-stage snapshot of the customer’s credit profile and insights into their buying power before you start building any deal.
As interest rates change more frequently, establishing the right credit tier and payment options early in the shopping process benefits everyone involved and builds more trust into the process. It also removes the disappointment when customers discover interest rates negatively impact the final deal.
Where Soft Pulls Benefit Other Areas of a Dealership
Combined with solutions that include equity calculators, smart dealers integrate these features into their daily workflows as a way to build additional conquest opportunities.
These additional tools built with soft-pull technology help dealerships offer quick valuation calculations to show customers how and where it might make sense to consider a new vehicle on the lot compared to a repair bill. This not only helps the customer make a wise decision but also helps dealers conquest a customer who may not originally be theirs, along with additional used and pre-owned inventory.
Ken Hill is managing director of 700Credit, a provider of automotive credit reports, compliance, identity verification and soft-pull products.