Aug 31 2021
Beyond just misleading, limited data can harm your business. Market analyst, Gartner, found that 27% of the data in the Fortune 1000 companies is considered flawed, which they defined as inaccurate, incomplete, or duplicated. According to their research, poor quality data leads to high costs, a high customer turnover rate and excessive expenses. IBM estimates that bad data costs the US economy roughly $3.1 trillion dollars each year. They also found that 1 in 3 business leaders don’t trust the information they use to make decisions. Experian Data, in a separate study, determined that flawed data impacts the bottom line of nearly 90% of all American companies.
As a lending institution or insurance provider serving the automotive industry, vehicle details matter. You’re responsible for knowing precise values—that’s your job. Yet today, because of expensive ADAS and infotainment packages, as well as incomplete and non-standardized vehicle data, ascertaining an exact value by simply decoding a VIN can be difficult, whether you’re valuing a new or used vehicle.
We like to say a VIN is where you start and not where you finish. Our philosophy is based on years of experience in the automotive industry and knowing that all VINs are not equal. For example, optional equipment installed on a vehicle is not encoded in the VIN. In another example, a VIN pattern alone (positions 1-8, 10, and 11) can’t provide the most accurate price estimate because it doesn’t always include trim and never includes installed optional equipment (here's what it does include). And, of course, the VIN does not include the original sale price of the vehicle because the code is assigned during manufacturing before all additional add-ons are complete and the seller comes to a final price agreement.
As an underwriter working with dissimilar vehicle data sources and inconsistent vehicle records, how can you be confident in your valuations? You can’t. Without complete data, your portfolio will always be under or over-valued. The best way to mitigate this risk and to know you are lending the right amount of money based on a detailed understanding of the features associated with the vehicles is through a VIN decoding service. VIN professionals can deliver the most precise and detailed vehicle data possible, whether through a delivered database or an API. Granted, vehicle details can seem endless, including standard and optional equipment, vehicle specs, warranty, color, MSRP and invoice pricing, safety data, and more. With so much vehicle data waiting to be uncovered, you will need to do more than simply decode a VIN to ensure accurate pricing.
When you’re in the business of financing or insuring vehicles, you want to know the full value of whatever it is you’re underwriting. And to get your arms around that value, you need all the data you can get your hands on. Ask yourself, would an OEM ever set out to build an incomplete vehicle? Of course not. So, why would you be willing to finance or insure the same complete vehicle based on incomplete details of what it is truly worth?
Details matter. Complete details matter even more.
