Online motor finance eligibility tools that allow consumers to check their likelihood of approval for an application are set to become more important thanks to the cost of living crisis, iVendi is advising.
Darren Sinclair, Chief Commercial Officer at the motor retail technology business, said that as personal finances were squeezed further over the coming months, car buyers would take greater interest in the motor finance choices available to them.
“The cost of living crisis and the high likelihood of recession mean that motor finance providers will almost certainly tighten the criteria on which they base their lending in order to minimise the risks they face.
“Almost inevitably, this will mean that fewer people meet the requirements of their preferred lender and may end up turning to their second, third or fourth choice, or even deciding not to buy at all.
“The advantage of online eligibility checkers is that they allow potential buyers to look at a dealer’s lending panel for a variety of motor finance products. They can see instantly and at a glance their likelihood of approval using a traffic light system – all without leaving a footprint on their credit file. It’s a much softer and friendlier process than making a formal application.
“During the kind of tough period for personal finances that we are experiencing, one which is likely to get worse, this kind of visibility is not just important but perhaps essential to consumers who are likely to be very aware of their current circumstances.”
Sinclair said that many dealers with which iVendi worked incorporated the company’s eligibility checking tool into their normal customer journey.
“Eligibility checking works well when it is built into an online buying process, being offered as a no-cost option to customers who would like to buy a car and want to gain a full understanding of the motor finance options to them.
“It’s a question of working to understand how the cost of living crisis is likely to affect the customer mindset. Buyers will almost certainly realise that their chances of approval from their preferred lender are lower and will want a greater understanding of the situation.
“At a time when people are feeling less confident about their finances, there is a strong likelihood they will find a high degree of comfort in having greater amounts of quality information available to them online. Eligibility checker technology makes this possible without them needing to speak to a person or face the embarrassment of potential finance application rejections.”
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