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Why are soft searches so important in F&I?

No matter who they are or what they’re buying, it’s important for any customer to feel valued and know they are being treated fairly – particularly when investing in a high-ticket item, such as a new car.

At DealTrak, our in-built soft search functionality is central to upholding automotive dealerships’ integrity when it comes to their clients – but it can also provide benefits for their lender and broker partners too.

Business development manager, Jon Sheard, has been looking at the benefits of soft search, throughout the finance and insurance (F&I) customer journey.

For the consumer

Treating customers fairly is one of the founding pillars of being FCA compliant – so it’s something which cannot be overlooked when it comes to the sale of F&I products.

In the context of applications for a loan – be it automotive or otherwise – credit ratings can be destroyed in an instant if individuals are automatically proposed to prime lenders, without consideration given to their unique situations.

For those who have poor credit scores, being proposed to one – or even two – prime lenders, followed up with a handful of near-prime creditors, they are almost certainly going to leave a forecourt with a diminished rating – and perhaps vehicle-less to boot.

For the dealer

The beauty of soft search is that the dealer is presented with a clearer understanding of a person’s credit file – without having any effect on their status – before submitting an application for finance.

It can also aid stock management too. By knowing the approximate credit scores of a typical customer, it’s possible to gain oversight regarding the correct vehicles to match budgets and requirements.

For example, if you’re stocking 25% low value, 25% mid-value and 50% premium models, but data shows that over half of your buyers have lower than average credit scores – it may be time to reevaluate your stocking models.

For the broker

When using the soft search function, brokers are in the unique position of being able to see the entire credit history of the consumer thanks to their full FCA credit broking permissions.

Therefore, they can accurately identify the most suitable lender for the buyer’s requirements – thus saving time, increasing their efficiency and enhancing customer outcomes.

For example, if an individual has a good lending capacity, but previously had a county court judgement (CCJ) against them, one can make an informed decision not to send a proposal to anyone which might automatically decline someone with such marks on their file.

By setting validation rules within the functionality, it is possible to set parameters around the types of proposal which are submitted to a lender for review. This is proving incredibly popular following the launch of our soft-search specific ‘InsideTrak’ feature earlier this year, allowing the user to access credit files directly from the DealTrak interface.

For the lender

One of the biggest benefits of soft search is its ability to improve lender efficiencies – while also keeping the best interests of the customer at heart.

Just as a purchaser doesn’t want to be proposed to a finance house where there is a high chance of them being declined for credit, a lender doesn’t want to receive proposals they would never underwrite – wasting their time, and money.

With this functionality benefitting all parties, it’s vital that dealerships harness the power of soft search when handling the sale of F&I products. You can almost liken it to the use of DRS in cricket and VAR in football – the technology is there to assist the umpire/referee and get rid of the shocking decisions!


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