Third-party shopping sites ponder penny-perfect payment predictions

The monthly payment calculators on third-party shopping sites routinely give consumers ballpark estimates on what they might pay for a vehicle.

The calculations aren't meant to be penny-perfect figures that people can count on once they sit down with a dealer. But with advancements in online tools for both financing and trade-in valuations, could there be a day when consumers get exact payment offers via third-party sites before stepping into dealerships?

The existing payment estimation platforms from Kelley Blue Book, Edmunds and Cars.com already have an array of features that give consumers an idea of what to expect. The sites, for instance, are tackling trade-in valuations -- one of the wild cards that vary for each consumer and are a crucial determinant in monthly payment figures.

Edmunds lets shoppers field valuation offers on their trade-ins from dealers via its MyAppraise tool. Cars.com also allows consumers to collect trade-in offers from dealers with its Quick Offer service where -- like with Edmunds -- they can upload photos of their vehicles. KBB gets the trade-in process started with its Instant Cash Offer that presents shoppers with valuations that must be approved later on at dealerships that are a part of the program.

Achieving penny-perfect offers, however, would require deeper connections with financiers behind the scenes. Right now, the sites connect users to finance companies on other sites to get approval for credit, but the calculators don't take credit details into account when delivering payment estimates. 

"We are not a financial institution. We'd have to continue to build partnerships with financial institutions," Joe Keehnast, principal product manager at Cars.com, told Automotive News when asked about the possibility of offering precise monthly payments on the site. "We have a strong dealer network that also has a whole range of financing options and ways they like to present financial information to their potential customers. We, in particular, would want to leverage that network and work with our dealers to provide the best rate information to our consumers." 

Keehnast said one of the major challenges to the financing component is sheer scale. He said the site would have to sift through "massive amounts of possibilities" and pick an approach "that won't narrow down consumer choices too much."

Cars.com says it has a payment calculation solution in the works that will offer a more precise payment. CEO Alex Vetter said the tool will help buyers get through paperwork as quickly as possible when they arrive at dealerships.

"We're already in beta working on how we can convey monthly payments, and we've gotten much more heavily involved in manufacturer rebates and incentives. You're going to see a lot more innovation here on being able to shop by payment," Vetter said.

Offering exact payments via third-party sites would require full transparency online. Yet this feature may not hold as much value if consumers get a payment offer and simply use it to get a better deal somewhere else, said Nick Gorton, Edmunds' vice president of product innovation.

The industry, Gorton says, will need more uniformity on pricing.

"What are some of the hurdles? It's getting all of the players in the ecosystem aligned to really be able to make that happen. You can get a clear price and clear payment online for all 20 million customers [on Edmunds], but if you can get a better price someplace else, that's not really a value," he said. "I think as we see the industry move more toward a single price, that would really help in this process."