FactorTrust vice president of auto finance Scott Brackin viewed the move made by Carvana to launch a prequalification financing program as more than just a lever the online auto retailer is pulling to turn used vehicles.
What piqued Brackin’s interest is how Carvana has rolled out this program by providing customers personalized financing terms without impacting their credit scores.
“A person’s credit score is their gateway to financial success,” Brackin said. “With various important situations in life that can affect consumers' credit scores, such as student loans, mortgages and even rental applications and cell phone contracts, it is vital for consumers to be aware of these elements and make smart purchasing decisions.
“I applaud Carvana for realizing the need for a solution that puts the consumer first and has no burden on credit scores,” he went on to say. “I’m impressed by its ongoing commitment to helping consumers make more informed purchases and transforming the automotive space.”
Last week, Carvana rolled into its 17th market: Cincinnati. This is the eighth new market for the company this year, including the move to fellow Buckeye city Columbus late last month.
And now, Carvana is broadening its financing capabilities.
As the first auto retailer to integrate an online, real-time prequalification program into the car-buying experience, Carvana continues to lead the charge to modernize and disrupt the auto industry.
The retailer explained that by answering 10 basic questions, customers can instantly view personalized financing options and exact payment terms for which they prequalify across all 4,700 vehicles available on Carvana.com, all without suffering a hard inquiry on their credit history. Hard inquiries can lower credit scores by up to five points and remain on a person's history for up to two years.
“When it comes to any financial decision, it's imperative consumers shop around to ensure they receive the best interest rate,” said Carvana chief executive officer and co-founder Ernie Garcia, who along with FactorTrust's Brackin is part of the long list of executives and experts involved in Used Car Week, which runs Nov. 14-18 at the Red Rock Resort and Casino in Las Vegas.
“Our main focus is on consumers, with the goal to bring transparency back into the antiquated car buying process,” Garcia continued. “We believe consumers should have the ability to shop around and inquire about financing options to help them better understand life events without negative effects on their credit.”
Carvana referenced AutoTrader’s 2016 Car Buyer Journey that indicated 88 percent of vehicle buyers use the Internet to shop. As the industry continues to shift online, Carvana has been trying to be a leader in the space, providing a platform where buyers can qualify for financing and complete the purchase with completely signed contracts in as little as 11 minutes, with delivery arriving as soon as the next day.