Employment Verification: The Auto Dealer’s Instant Solution
It’s a frustrating statistic that auto dealers know well: Only 20 percent of people who visit a showroom floor will actually purchase a vehicle. Eight in 10 will be walk-offs. Yet 78 percent of customers who walk through that door will buy a vehicle somewhere, according to DealerRefresh.
One of the big deterrents to getting a deal done, particularly for subprime loan customers, is income and employment stipulations from lenders. Have customers leave the dealership to find a pay stub and it’s quite likely the last time you’ll see them.
Instant employment verification is the answer.
Data direct from the source
“We’re building solutions to help lenders verify income and employment so that they can make the right credit decisions,” says Craig Leabig, senior director of product management with Equifax. “We go direct to the source for verification. If someone says they make $1,000 a week and they work for UPS, we confirm that information directly with UPS.”
That’s the power of the enormous Equifax database.
“We have 55 million active employment records provided to us every time an employer runs a payroll,” says Leabig. “It’s stored securely and provides an instant database solution — rather than having to wait 3 or 4 days for verification.”
The Equifax Spectrum Verification Services Platform boasts automated technology enhanced by human support. Spectrum routes inquiries that aren’t instantly satisfied to agents who immediately begin processing the verification request.
“We’ve heard from auto dealers that time is of the essence. They want inquiries fulfilled quickly. Get us something, get us anything and get it quickly,” says Emily Devers, business process solutions consultant with Equifax. “The Spectrum system alerts clients as soon as information is available so that they can make their lending decision.”
Smarter, quicker lending decisions
Dealers who shop credit applications to multiple lenders often will choose the bid that has the path of least resistance. It just makes sense: The bid that doesn’t have stipulation barriers will likely win the business.
Income and employment verification also allows smarter lending decisions. According to Equifax research, nearly 25 percent of borrowers inflate their stated income by 15 percent or more on car loan applications. This single factor contributes to two times higher charge-off rates.
The time saved, combined with the additional deals closed, adds up to a substantial revenue impact. Nearly half of dealers surveyed submit between 11 and 30 subprime deals a month. More than half the time, it takes 2 to 3 days to clear all the stipulations on a deal, the most common being income verification. Until now, collecting a pay stub has been the most common solution.
When that happens, another customer walks off the showroom floor on the way to “get that pay stub,” promising to return shortly. For more information on Equifax Automotive Solutions, please visit: http://www.equifax.com/automotive/en_us