As digital finance platforms make the car-buying experience more transparent, hard credit checks are becoming a thing of the past and soft credit checks are “likely to evolve to a new standard,” Ernie Garcia, founder and chief executive of Carvana, told AFN.
The online auto retailer launched a real-time prequalification feature on its platform last month, which allows users to view pricing for its finance options based on 10 questions that won’t hurt a consumer’s credit score.
“I struggle to understand how to defend that it makes sense to have a hard credit check just to find out what financing options are available,” Garcia said. “Everything else in the world we’re allowed to shop for and understand the price ahead of time with no cost, and then we make a decision. It feels to me like financing probably shouldn’t be different.”
