CHARLOTTE, N.C., Oct. 7, 2015 /PRNewswire/ -- In a nationally
representative survey of 1,024 American consumers, LendingTreeĀ®
found that 79 percent of Americans considered themselves bargain
hunters and 92 percent of consumers have researched prices online
before purchasing an item. However, when consumers were asked how
often they looked for better prices when shopping for major
financial loans, such as a mortgage or an auto loan, less than
one-third, only 30 percent, of survey participants stated they
always look for the best rates. Roughly 18 percent stated they
never search for better rates or prices on loans.
Comparison shopping for loans presents greater opportunity for
consumers to realize substantial savings than for most other
consumer transactions, yet most consumers do not avail themselves
of available tools to shop around for the best deal or research
available options.
"It's an interesting phenomenon. Consumers are generally very
savvy with their shopping behavior when it comes to day-to-day
purchases and material goods. But, once it comes to a major
financial investment, we don't see the same rational pattern of
behavior and mentality for saving," said Andrea Woroch, LendingTree's consumer savings
expert. "Consumers may be too focused on price or the monthly
payment and fail to consider the lifetime cost of interest which
can add up quickly. Over a five-year auto loan, or thirty-year
mortgage, a one percent difference between interest rates can
easily translate to thousands of dollars."
Generally, consumers want, and are very willing, to shop for the
best price. Over half of Americans, 56 percent, state they have
visited multiple stores to compare prices on a particular item.
About 83 percent of Americans have used a comparison shopping
website such as Amazon, Priceline, or Expedia. Yet, among those who
do comparison shop online, only 14 percent comparison shop loan
products. This list breaks down the frequency of which consumers
regularly use online shopping sites for goods and services.
Frequency Which
Consumers Regularly Use Comparison Shopping Websites
For
|
|
|
|
|
Good or
Service
|
Frequency
|
|
Electronics
|
67.63%
|
|
Flights/Airfare
|
67.50%
|
|
Hotels
|
63.82%
|
|
General
Merchandise
|
51.13%
|
|
Appliances
|
45.79%
|
|
Clothing
|
36.30%
|
|
Loans (Any: personal,
mortgage, auto, etc.)
|
14.23%
|
Americans are willing to shop around, even for small monetary
amounts. Over 80 percent of consumers stated they would go out of
their way to save ten cents per
gallon on gas. Yet, only 17 percent of car owners negotiated the
interest rate when financing a newly purchased vehicle.
"There could be a number of causes for this irrational behavior
and it may vary among types of consumers," Woroch continues. "One
is simply that many Americans don't understand the long-term costs
associated with compounding interest and the time-value of money.
Another possibility is that consumers are uneducated about loan
shopping and the importance of comparing interest rates before
financing a purchase. It's easy to become emotionally involved with
the purchase itself or to find the loan process so frustrating that
you would rather finalize the purchase instead of shopping around.
Unfortunately, consumers are becoming accustomed to paying a
premium for convenience on a variety products we purchase every
day, such as bottled drinks for example. But is the convenience of
not shopping for loans really worth thousands of dollars? Perceived
convenience is a major trap consumers can fall into, but with
technology improving our ability to find the best deal, saving
money on your major finances is just as easy as online
shopping."
LendingTree looked at further consumer data to calculate the
amount of money consumers could be losing by not comparison
shopping mortgages. Based on the survey, about 32 percent of home
owners looked at only one mortgage rate before buying their home.
However interest rates offered to borrowers often vary from lender
to lender. In Q3 2015, mortgage shoppers who received offers
from at least two lenders through LendingTree experienced an
average rate differential of .32 percentage points between the
lowest offer and highest offer, a difference of $48.06 per month. Using this information,
choosing the lowest offer could save a borrower roughly
$17,300 over the life of the
loan.
To view the original release in LendingTree's press room, please
visit
https://www.lendingtree.com/press-release/lendingtree-survey-finds-bargain-hunting-ends-when-it-really-matters.
Methodology
The 2015 LendingTree Consumer Shopping Behavior Survey was
conducted online within the United
States by SurveyMonkey on behalf of LendingTree between April 13 and April 19, 2015 among a
nationally representative sample of 1,024 Americans ages 25 and
up.
About LendingTree
LendingTree (NASDAQ: TREE) is the nation's leading online loan
marketplace, empowering consumers as they comparison-shop across a
full suite of loan and credit-based offerings. LendingTree
provides an online marketplace which connects consumers with
multiple lenders that compete for their business, as well as an
array of online tools and information to help consumers find the
best loan. Since inception, LendingTree has facilitated more than
55 million loan requests. LendingTree provides free monthly credit
scores through My LendingTree and access to its network
of over 350 lenders offering home loans, personal loans, credit
cards, student loans, personal loans, business loans, home equity
loans/lines of credit, auto loans and more. LendingTree, LLC is a
subsidiary of LendingTree, Inc. For more information go
to www.lendingtree.com, dial 800-555-TREE, like
our Facebook page and/or follow us on
Twitter @LendingTree.
MEDIA CONTACT:
Megan Greuling
704-943-8208
Megan.Greuling@LendingTree.com
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SOURCE LendingTree