Even buyers with good credit now shop by monthly payment

2 min read

A FlexPath study finds prime and super-prime shoppers use payment-based shopping tools almost as often as subprime buyers.

You might expect only buyers with weaker credit to shop by monthly payment. A new study says otherwise. Dealership Guy reports that FlexPath DXP's Automotive Shopper Credit & Payment Behavior Study found shoppers with good credit are just as focused on the monthly number.

FlexPath makes online shopping tools for dealers, including one called Shop-By-Payment that shows which vehicles fit a monthly budget. According to the study, 78% of prime and super-prime shoppers used it, nearly the same as the 80% of subprime shoppers who did.

Buyers with good credit were also more likely to prequalify for a specific vehicle, 44% versus 30%. About 81% of those single-vehicle prequalifications started on search-results or vehicle-detail pages, compared with 7.5% on finance pages. And after prequalifying, 81.5% of prime and super-prime shoppers went on to shop by payment, compared with 76% of subprime shoppers.

The study covered 17,218 verified shoppers at dealerships offering all three FlexPath tools. The most common question across credit tiers, cited by nearly 80% of shoppers, was "What vehicles fit my monthly budget?"

"Prime shoppers aren't just asking, 'Can I get approved?'" FlexPath CEO Tarry Shebesta said in a statement. "They're asking what a specific vehicle will cost them each month."

For buyers, this is a reminder of how dealers think. Payment-first tools are useful, but a low monthly payment can hide a long loan term or a higher total price. Use the monthly figure to set your budget, then compare the total cost and interest rate before you sign. Note that FlexPath sells these tools, so the study comes from an interested party.

Sources: Dealership Guy