LendingTree Survey Finds Bargain Hunting Ends When It Really Matters
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
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
"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."
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