We have a vehicle description problem.
Close to 17 million new cars and light trucks were sold last year in North America. Across dozens of major new vehicle makes. And each make can offer thousands of option combinations and prices. That’s just the new vehicles. More than three times as many used vehicles are available.
These new or used vehicles are marketed, sold, bought, traded, financed and insured, often more than once in a year. And at every transaction point, communication about these vehicles must occur. Efficiently. Effectively. Accurately.
Yet it doesn’t. That’s the problem.
There’s no common language for describing cars and trucks. Or even agreement on how much a vehicle is worth. Plus, available options and prices change all the time. Under such fluid conditions, how can your members trust the online information they’re getting? In addition, the vehicle description problem has direct financial implications to your credit union. How can your loan officers trust their collateral descriptions?
According to Christine Pratt, senior analyst for the Tower Group, “In automobile finance… missing options and style levels could add thousands of dollars to an automobile’s value. Consequently, it is difficult to deliver precise collateral values. These are the loans that routinely make their way to a loan officer as exception items, and manual decisions are made.”
Not only is there a problem, it’s a costly one.
There is a solution. One way to empower your members and mitigate your risk is through the use of a reliable, comprehensive vehicle research tool, often called a configurator, that enables online shoppers to help themselves to vehicle details and prices. But beware. Not all online vehicle research tools are equal.
Here are seven questions to ask your vendor before placing their research tool on your website.
1. Does the tool create buildable vehicles?
Often “configurators” will allow a user to create a vehicle that cannot truly be built. For instance, a user may be able to create a convertible with a sunroof. Make sure the tool does not let your members select incompatible vehicle options.
2. Does it handle multiple layers of compatibility?
Most online vehicle research tools can handle the currently selected options a user has entered. However, does the tool also dig deeper to find the multiple layers of compatibility needed to build and price a car? For instance, different axle requirements are needed for certain parts.
3. Is the underlying content accurate and timely?
Without accurate content and timely information as the foundation for any vehicle configurator, you’re arming your members with bad information. Misinformation can create an adversarial relationship between your credit union members and the auto retail community from the start.
4. Does the research tool include all competitive information?
A vehicle research tool needs all relevant competitive information in order for its comparison function to be truly valuable. Are all competitive models included, or only certain categories that are often predefined and weaker in comparison?
5. Is the information the same for buyers and sellers?
Without the same pricing and specifying information, there are bound to be errors and unsatisfied consumers. Or, on a larger scale, vehicles built with the wrong parts or options. Make sure you choose a tool that utilizes industry-standard data so that your members will have access to the same details as the retailers they’re dealing with.
6. Are multiple searches available within the tool?
Can your members search by price range, monthly payments or vehicle type (e.g., SUV vs. truck)? Make sure there are numerous ways to search. Your credit union site must serve a range of vehicle research needs, from the what-color-is-it crowd to the person who pores over every little detail.
7. Does it support both new and used vehicle research?
Nearly 50% of car shoppers look at both new and used vehicles. They also want to know the trade-in value of their current car or truck. Consider the need for members to identify used vehicle values when selecting an online research tool.
In conclusion, your site should be viewed as a single source for all of your members’ vehicle research needs. Remember, if they leave your site to continue their research, chances are you will lose the loan opportunity.
Describing a vehicle can sometimes seem like grabbing an eel in a bathtub. But with the right research tool on your site, your members will be able to grab, specify, compare, price and value just about anything that drives. Your loan officers will know what it’s really worth. And your credit union will be an essential part of the car buying process--from start to finish.
Chrome Systems, Inc. pioneered the technology behind electronic vehicle configuration close to 20 years ago and continues to lead the industry. Today, Chrome's complete and accurate vehicle descriptions and prices facilitate online loan origination and enable lenders to better understand the true value of their collateral.