The number one issue we see car dealers running into is consumer consent. It is far too easy to simply do a hard credit pull on a consumer's car loan application, regardless of whether the consumer is aware that you are doing a credit check. We do our best to notify the applicant that this is a possibility, but the bottom line is that you have an ethical responsibility to inform a customer when you impact their credit history by hitting it with an inquiry. Audit your business operations and enforce this practice with your staff.
Get consumer consent up front - ideally when they're already sitting down with you at your store - and protect yourself on two fronts: from their perspective, and on the credit bureau side. Remember, these credit inquiries are traceable back to your business -- we've seen consumers track down and sue dealerships who they felt used their information fraudulently. Make sure that your store's policies around handling credit checks are consumer-friendly.
From the credit bureau perspective, you're not only running up your bureau fees unnecessarily, you're also generating trigger leads. If you didn't already know, once you've pulled credit on a given consumer, the credit bureau then has the legal right to resell that information to subscribers who have signed up to purchase that information as it becomes available. And you've just potentially given your competitors the chance to contact the prospective customer before you even get a chance to start your process.
So what's the answer?
Set the appointment, get them in the door, and then pull credit. That way, you're going to know you're doing it, and they're already going to be fully engaged with your team.
Looking for more on this topic?
Download our free eBook, "7 Best Practices for Protecting Consumer Privacy." In addition to consumer consent, it covers recommendations for reviewing your current process and making sure you're doing everything you can to comply with the Red Flags Rule.
We think you'll find it useful -- and it's just another way we're working every day to give you the right information to help you SELL MORE CARS!®
Got Questions? Feel free to get in touch.