Category: Auto Finance|Consumer LendingCanada

Auto Dealers in Canada Want High-Value Engagements from Lenders’ Sales Reps, JD Power Finds

2023-05-23

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TORONTO: 25 May 2023 – Feeling the crunch of higher interest rates and continued low supply of new vehicles, Canada’s auto dealerships are focused more than ever on running efficient operations, especially when it comes to interacting with their lenders. According to the JD Power 2023 Canada Dealer Financing Satisfaction Study^SM released today, nearly 40% of dealers say an on-site visit from a lender’s sales representative is not their preferred communication channel for sales meetings. Furthermore, when a sales representative interacts with a dealership, there is an expectation that the rep will bring significant value and meet certain key performance indicators (KPIs) such as explaining the lender’s risk appetite so the dealer completely understands the provider’s buying parameters.

“Dealers are looking for the most effective use of their time, so interactions with lenders’ sales representatives need to be value-added whether that’s via phone, text, email or in-person,” said Patrick Roosenberg, senior director of automotive finance intelligence at JD Power. “While many dealers still want in-person meetings, lenders should be mindful about their clients’ time and communications preferences. How they opt to interact with sales reps varies from dealership to dealership and should be taken into consideration. The underlying stance we hear from dealers is that each communication touchpoint must be value-add regardless of channel.”

The study also shows the positive effect that a well-executed and value-add lender/dealer engagement has on future business. According to the study, when the non-captive prime lender sales rep meets all the KPIs, dealers are almost three times more likely to indicate they “definitely will” send additional business to the lender vs. those who don’t meet the KPIs (64% vs. 27%, respectively.)

Study Rankings

Kia Finance ranks highest in the captive prime segment with a score of 809 (on a 1,000-point scale). Honda Financial Services (804) ranks second and Ford Credit (793) ranks third. The segment average is 743.

In the non-captive prime segment, Scotiabank ranks highest, with a score of 815. TD Auto Finance (802) ranks second. The segment average is 765.

In the non-captive non-prime segment, TD Auto Finance ranks highest for a sixth consecutive year, with a score of 801. iA Auto Finance (791) ranks second. The segment average is 785.

The Canada Dealer Financing Satisfaction Study, now in its 25^th year, this year captures 7,017 finance provider evaluations across three segments, all from new-vehicle dealerships in Canada. The study was fielded in February-March 2023 and was redesigned this year to better capture and reflect dealers’ experiences with their lenders in their own words.

For more information about the Canada Dealer Financing Satisfaction Study, visit https://www.jdpower.com/business/auto-finance/canada-dealer-financing-satisfaction-study.

About JD Power  
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modelling capabilities to understand consumer behaviour, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.  

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business.  

Media Relations Contacts
Gal Wilder, NATIONAL; 416-602-4092; [email protected] 
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected] 

About JD Power and Advertising/Promotional Rules: http://www.jdpower.com/business/about-us/press-release-info

 

In Highly Competitive Auto Financing Market, Relationships Are Differentiators, JD Power Finds

2018-05-22

jdp-root

TORONTO: 23 May 2018 — For the second consecutive year, auto dealers in Canada continue to stress the importance of the dealer-lender relationship and are more satisfied with lenders that not only understand their needs, but also consistently exceed their expectations, according to theJD Power 2018 Canadian Dealer Financing Satisfaction Study,^SM released today.

As the auto retail financing industry becomes more commoditized, dealers cite “people relationships” and “ease of doing business” as the top two reasons for their selection of a financing provider. The importance of these two reasons are echoed both by captive and non-captive lenders. Factors such as dealer compensation and competitive rates are also relevant in the provider selection decision, but are of secondary importance to customer service-related reasons.

“The marketplace in Canada continues to be strong, yet highly competitive, so relationships are what make the difference,” said Jim Houston, Senior Director of Automotive Finance at JD Power. “Lenders can adjust their credit policy, interest rate or dealer compensation plans, but it’s how they interact with dealers and resolve issues when they arise that have the greatest effect on satisfaction. When overall satisfaction increases, dealers are more willing and able to deepen the business relationship with lenders.”

The study, now in its 20^th year, finds that problem resolution and the speed with which an issue is rectified significantly affect dealer satisfaction levels. Moreover, it’s the credit department that bears the load and acts as the first port of call when things go sour. Six in 10 (60%) auto dealers indicate that credit desk personnel are the first point of contact for any problems or concerns. Additionally, 76% of dealers say they were able to engage with credit staff when needed.

“While both captive and non-captive lenders’ credit departments perform well in making themselves available, lenders should not rest on their laurels,” Houston said. “Instead, they should maintain a sense of urgency when responding to dealers, as satisfaction levels plummet when the credit department is not readily available. Leveraging various communication channels and technology coupled with adequate credit department staffing are some measures in which lenders can demonstrate their commitment and differentiate themselves to increase satisfaction.”

Following are additional findings of the 2018 study:

• Lender selection influenced by more than just relationships: Beyond the relationship influence, dealers have different views of satisfaction depending on the type of lender with which they are doing business. Dealers who work with captive lenders place higher importance on the lender’s customer loyalty rebates (27%) than those who work with non-captive lenders (4%). In contrast, dealers that choose to do business with non-captive lenders place a greater importance on dealer compensation (13%), compared with those that choose to work with captive lenders (4%).
• Sales performance requires improvement: In a highly competitive and fragmented market, exceeding expectations becomes a paramount differentiator. The study finds that dealers hold their lender sales representatives to a higher set of standards, yet sales representatives exceed expectations less than half of the time.

Lender Rankings

Overall dealer satisfaction in the captive segment is 875 (on a 1,000-point scale), a 7-point increase from 2017. Overall satisfaction in the non-captive segment is 862, a 4-point decrease from 2017.

Mercedes-Benz Financial Services ranks highest in the captive lender segment with a score of 948. Ford Credit (903) ranks second; Honda Financial Services (883) ranks third; and Toyota Financial Services (878) ranks fourth.

Among non-captive lenders, TD Auto Finance ranks highest with a score of 884. Bank of Montreal (881) ranks second and RBC Royal Bank (868) ranks third.

The 2018 Canadian Dealer Financing Satisfaction Study captures 4,861 finance provider evaluations across the two segments from new-vehicle dealerships in Canada. The study was fielded in February-March 2018.

For information about the Canadian Dealer Financing Satisfaction Study, visit http://www.jdpower.com/business/resource/canadian-dealer-financing-satisfaction-study.

JD Power is a global leader in consumer insights, advisory services and data and analytics. These capabilities enable JD Power to help its clients drive customer satisfaction, growth and profitability. Established in 1968, JD Power is headquartered in Costa Mesa, Calif., and has offices serving North/South America, Asia Pacific and Europe. JD Power is a portfolio company of XIO Group, a global alternative investments and private equity firm headquartered in London, and is led by its four founders: Athene Li, Joseph Pacini, Murphy Qiao and Carsten Geyer.

Media Relations Contacts

Gal Wilder, Cohn & Wolfe; Toronto, Canada; 647-259-3261, [email protected]

Sandy Caetano, Cohn & Wolfe; Toronto, Canada; 647-259-3288, [email protected]

Geno Effler; JD Power; Costa Mesa, Calif.; 714-621-6224; [email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info

 

 

Canadian Auto Dealers Seek More ‘Consultative’ Relationship with Financing Companies To Navigate Potential Economic Headwinds, JD Power Study Says

2016-05-05

jdp-root

TORONTO: 26 May 2015 — New-vehicle dealers in Canada are reporting record sales but are trying to increase profitability while facing some economic headwinds. Now more than ever they want their auto finance providers to be a business partner rather than just a lender, according to the JD Power 2016 Canadian Dealer Financing Satisfaction Study,^SM released today.

Vehicle sales in Canada continue to rise, with some of the growth being aided by low interest rates and extended terms, which have improved consumer affordability. While low rates and extended terms are supporting dealership sales, each has the potential to negatively impact lenders’ margins and portfolio risks. Low interest rates and extended terms have supported the dealer sales growth, as the average amount financed (vehicle manufacturer’s suggested retail price—MSRP) has increased to $37,794 CAD in 2016, up from $27,566 in 2010, according to data gathered by the Power Information Network^® (PIN) from JD Power. Additionally, average loan terms from bank lenders has increased over the same period to 78 months from 69 months, while term lengths from captive financing companies have extended to 69 months from 59 months, according to PIN.  

While the dealer sales volume has increased, new-vehicle profitability has declined, and the economic horizon for Canada has some headwinds from declining oil prices and purchasing power.

“Faced with declining profitability and the economic headwinds, dealers want their lenders to be collaborative business partners that will help them focus on the things that drive profitable growth without impairing their ability to sell vehicles,” said Mike Buckingham, senior director of the automotive finance practice at JD Power.

From that business partnership, dealers want personalized service from their underwriting/funding and sales teams to help them manage their credit and expedite consumer applications and funds. Dealers are increasingly concerned about customer satisfaction and rely on their lender partners to aid them in speeding up the sales, financing and vehicle delivery processes.

“Sales representatives are integral to the dealer-lender relationship,” said Buckingham. “To make that relationship strong requires that the lender’s rep make frequent contacts with the dealership, understand their business, provide insights on current programs and help the dealer resolve financing issues.”

The study finds that 60% of dealers say their prime retail credit (PRC) sales reps facilitate contract problem resolution. When that occurs, overall dealer satisfaction with their PRC lender increases by 97 points (on a 1,000-point scale). Similarly, nearly half of dealers say their sales reps provide dealership performance consulting and facilitate restructuring of applications, which lift PRC satisfaction by 95 and 93 points, respectively. Additionally, 69% of dealers indicate that they are always able to reach their credit staff when needed, which boosts PRC satisfaction by 104 points.

Dealers want problem solvers in both the sales reps and underwriters. For finance and insurance (F&I) managers, that means occasionally granting exceptions to get their customers the financing needed to make the sale. These requests don’t often occur; in fact, dealers request exceptions an average of 10% of the time. When those dealer requests are granted at least 50% of the time, it lifts satisfaction by 80 points.  

When lenders automatically approve applications, satisfaction increases by 75 points, and when lenders are able to fund error-free contracts within the same day of submission, satisfaction jumps by 72 points.  

“In a highly competitive market like Canada, time is of the essence,” said Buckingham. “Dealers want to be able to get quick funding, as any delay can lead to a lost opportunity, with the customer walking out the door.”

The study, now in its 18th year, measures dealer satisfaction with finance providers in four segments: prime retail credit; retail leasing; floor planning; and non-prime retail credit.[1] Dealer satisfaction in the prime retail credit segment is 858, and in the non-prime retail credit segment, satisfaction is 825. Dealer satisfaction in the retail leasing segment is 860, while in the floor planning segment, satisfaction is 930.

Prime Retail Credit Segment Rankings

BMW Financial Services ranks highest in the prime retail credit segment for a fourth consecutive year, improving 35 points to 971. BMW Financial Services performs particularly well in the application/approval process, product offerings and sales representative relationship factors. Mercedes-Benz Financial Services ranks second (922), followed by Ford Credit Canada (918).

The 2016 Canadian Dealer Financing Satisfaction Study captures nearly 6,400 finance provider evaluations across the four segments. These evaluations were provided by more than 1,200 new-vehicle dealerships in Canada. The study was fielded from January through  March 2016.

For more information about the 2016 Canadian Dealer Financing Satisfaction Study, visit http://canada.jdpower.com/resource/canadian-dealer-financing-satisfaction-study.

See the online press release at http://www.jdpower.com/press-releases/2016-canadian-dealer-financing-satisfaction-study.

Media Relations Contacts

Gal Wilder, Cohn & Wolfe, Toronto; 647-259-3261, [email protected]

John Tews, JD Power, Troy, Michigan; 248-680-6218, [email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info

 

Good Service Trumps Low Pricing in Canada’s Competitive Auto Lending Marketplace

2015-05-27

jdp-root

TORONTO: 1 June 2015 —For new-vehicle dealerships in Canada, receiving good service and fast contract funding for all consumer-facing products—prime retail credit, non-prime retail credit and retail leasing—is more important than obtaining low pricing offered by auto finance providers, according to the JD Power 2015 Canadian Dealer Financing Satisfaction Study^SM released today.

The study, now in its 17^th year, measures dealer satisfaction with finance providers in four segments: prime retail credit; retail leasing; floor planning; and non-prime retail credit.^[1] Satisfaction is calculated on a 1,000-point scale. Dealer satisfaction in the prime retail credit segment is 850, and in the non-prime retail credit segment satisfaction is 848. Dealer satisfaction in the retail leasing segment is 853, while in the floor planning segment, satisfaction is 934.

New-vehicle dealers prefer personalized service from their underwriting funding and sales teams that expedites consumer applications and funds contracts over obtaining lower pricing from their finance provider. Approximately one-third (32%) of dealers are willing to pay a roughly 0.70-basis-point premium, on average, for access to an enhanced service and financing experience. Dealers want a central point of contact in underwriting, whether an individual or team; yet, 37 percent of prime retail credit dealers do not have any dedicated support.

Dealer-focused sales rep relationships increase satisfaction and retail contract volume. When a high level of sales rep service is provided, satisfaction is substantially higher than when there is no focused support (943 vs. 744, respectively). Among dealers with a focused relationship where all sales rep relationship key performance indicators (KPIs) are met, 67 percent say they “definitely will” increase the percentage of business they conduct with their provider.

“High-performing lenders are characterized as collaborative consultants rather than loan processors,” said Mike Buckingham, senior director of the automotive finance practice at JD Power. “What separates the highest-performing lenders from the rest is the broad range of support they provide dealers to help sell vehicles. This includes helping dealers understand the variety of lending options available, how to maximize profits, how to reduce expenses and how to effectively retain customers. Dealers, in many instances, are willing to pay a premium price to receive these services from the high-performing lenders.”

Prime Retail Credit Segment Rankings

BMW Financial Services ranks highest in the prime retail credit segment with a score of 936 and performs particularly well across all factors. Mercedes-Benz Financial Services ranks second in the segment with a score of 920, followed by Honda Financial Services at 895.

Floor Planning Segment Rankings

VW Credit Canada ranks highest in the floor planning segment with a score of 958 and performs well across all factors. Scotiabank (956) ranks second and Ford Credit Canada (950) third.

Retail Leasing and Non-Prime Retail Segments

While there are no awards presented in the retail leasing and non-prime retail segments, BMW Financial Services, Honda Financial Services and VW Credit Canada perform particularly well in the retail leasing segment; and Ford Credit Canada and Scotia Dealer Advantage perform above the non-prime retail segment average.

KEY FINDINGS

• ŸDealers are interested in building a collaborative relationship with their lenders. When lenders provide primary buyer/underwriter personnel to facilitate credit approvals and speedy contract funding in the application and approval process, satisfaction increases significantly in the prime retail credit segment (+81 points) and non-prime retail credit segment (+76).
• ŸIn the finance provider offering factor for the prime retail credit segment, flexibility with the buying policy (17%) is the most important attribute, compared with competitiveness of rates with new vehicles (14%) and used vehicles (11%).
• ŸWhen the lenders’ sales representative visits the dealership a minimum of five times per year, satisfaction increases in prime retail credit (+90 points), in non-prime retail credit (+94) and in floor planning (+45). In retail leasing, satisfaction increases by 89 points with just four visits per year.
• ŸIn retail leasing, paperwork is a tremendous burden to the dealer in the lease return process, as 68 percent of leases are returned to the dealership. Nearly two-thirds (65%) of dealers experience challenges with this process. When finance providers guide customers through the lease return process—easing dealer burden—satisfaction is positively impacted by 126 points.

Satisfaction is measured across three factors in the prime and non-prime retail credit segments: finance provider offerings; application and approval process; and sales representative relationship. Four factors are measured in the retail leasing segment: finance provider offerings; application and approval process; sales representative relationship; and vehicle return process. Four factors are measured in the floor planning segment: finance provider credit line; floor plan support; sales representative relationship; and floor plan portfolio management.

The 2015 Canadian Dealer Financing Satisfaction Study captures nearly 6,300 finance provider evaluations across the four segments. These evaluations were provided by roughly 1,300 new-vehicle dealerships in Canada. The study was fielded between January and March 2015.

Media Relations Contacts

Gal Wilder; Cohn & Wolfe; Toronto, Ontario; 416-924-5700; [email protected]

Beth Daniher; Cohn & Wolfe; Toronto, Ontario 647-259-3290; [email protected]

John Tews; JD Power; Troy, Mich. 248-680-6218; [email protected]

About JD Power and Advertising/Promotional Rules http://www.jdpower.com/about-us/press-release-info About McGraw Hill Financial www.mhfi.com 

 

Dealer Financing Satisfaction with Banks in Canada Increases As Captive Share of Auto Financing Business Declines

1970-01-01

jdp-root

WESTLAKE VILLAGE, Calif.: 24 May 2012 — Banks in Canada are increasing their penetration in the automotive dealer financing marketplace at the same time as Canadian dealers’ satisfaction with banks is improving, according to the JD Power and Associates 2012 Canadian Dealer Financing Satisfaction Study^SM released today.

Dealer financing satisfaction with banks has increased to 872 (on a 1,000-point scale) in 2012, up 25 points from 847 in 2011.  Satisfaction with the captive financing companies–finance companies owned by the automotive manufacturers to finance dealers’ inventories or to make loans to vehicle buyers–is at 840, a seven-point increase from 2011.

While satisfaction with banks  is increasing, so is the volume of business dealers are sending their way.  Banks’ share of the dealer financing business has increased to 60.5 percent in 2012, up 4.7 percent from 2011.  The captive market share has dropped to 36.3 percent, down 1.5 percent from 2011, according to JD Power and Associates’ Power Information Network(R) (PIN) data.

“Auto lending is a very competitive market, and we’re finding that more dealers this year are using multiple providers, particularly bank providers, than in 2011,” said Lubo Li, senior director and financial services practice leader at JD Power and Associates, Toronto. “Banks are continuously improving their offerings and improving the dealer lending experience. This is putting competitive pressure on all automotive lenders to focus on providing outstanding service to dealers in order to maintain or grow their share of the business.”

The study, now in its 14th year, examines dealer satisfaction with finance providers in four segments: prime retail credit; retail leasing; floor planning, and sub-prime retail credit.  Within the prime and sub-prime retail segments, three key factors contribute to satisfaction: finance provider offering; application/approval process; and sales representative relationship. Four factors are measured in the retail leasing segment: finance provider offering; application/approval process; vehicle return process; and sales representative relationship. In addition, four factors are measured in the floor planning segment: finance provider credit line offering; floor plan support; floor plan portfolio management; and sales representative relationship.

The study finds that dealer satisfaction has increased substantially across all four segments.  Dealer satisfaction with sub-prime retail credit providers has increased the most, to an index score of 827, up 61 index points from 2011.  

Dealer satisfaction with floor planning finance providers has increased to 889, up from 851 in 2011.  Dealer satisfaction with prime retail credit finance providers is 859 and satisfaction with retail leasing is at 834 ( up 18 and 29 points, respectively, from 2011).  

The study finds that across all four segments, satisfaction has increased with the helpfulness of credit staff and their responsiveness to questions.

“Few lenders will be able to sustain, not to mention grow, their vehicle financing business without taking care of the dealers,” said Li. “Simply meeting dealer expectations with product offerings is not enough.  Developing a rapport with the dealer, understanding their needs and responding accordingly, is what creates dealer loyalty, which in turn increases revenue potential through increases in future business for the lender.”

Among dealers who work with non captive financing companies, intended future loyalty is notably higher among those dealers working with non-captives who are highly satisfied (satisfaction scores of 800 points and above), compared with dealers with low satisfaction (satisfaction scores of 500 points and below).  More than three in five (61%) highly satisfied dealers say they “definitely will” increase the percent of business sent to the lender, compared with just seven percent of dealers who have low satisfaction.  

There is a similar pattern among dealers working with captive finance providers.  The study finds that 63 percent of highly satisfied dealers indicate they “definitely will” increase the percent of business sent to their captive finance provider, compared with only 10 percent of dealers with low levels of satisfaction.  

For dealers, speed in processing a loan or lease application is crucial.  Dealers find banks more frequently are able to provide funding in 24 hours or less than are captive providers–84 percent vs. 56 percent, respectively.

“Evaluating credit decisions with a high degree of predictability leads to higher dealer satisfaction,” said Paul Cuevas, director of global automotive finance at JD Power and Associates.  “In addition, lenders that provide dealers access to the same credit buyer at least 80 percent of the time increase satisfaction by nearly 20 index points compared to those who have more variable interaction.”

Prime Retail Credit Segment Rankings

Mercedes-Benz Financial Services ranks highest in dealer satisfaction with prime retail credit services with a score of 958 and performs particularly well in the finance provider offerings; application/approval process; and sales representative relationship factors. BMW Financial Services ranks second in the segment with a score of 908, and Bank of Montreal ranks third with a 907.

Retail Leasing Segment Rankings

Mercedes-Benz Financial Services ranks highest in dealer satisfaction with retail leasing with a score of 950 and performs particularly well across all four factors: application/approval process, finance provider offerings, sales representative relationship and vehicle return process. Mercedes-Benz Financial Services is followed in the rankings by BMW Financial Services (906) and Canadian Dealer Lease Services (866).

Having a fast and efficient approval process remains the most important aspect of the leasing experience.  Slightly more than one-half (54%) of dealers indicate retail lessors approve applications automatically.  Satisfaction is significantly higher among dealers whose finance provider funds lease deals in one day or less than among dealers who have to wait longer than one day (871 vs. 776, respectively).

Floor Planning Segment Rankings

Ford Credit Canada ranks highest in dealer satisfaction with floor planning, achieving a score of 933, and performs particularly well in the sales representative relationship and floor plan portfolio management factors. VW Credit Canada ranks second (927) and performs particularly well in the floor plan support, floor plan portfolio and management factors.  Scotiabank ranks third with an index score of 926.

The 2012 Canadian Dealer Financing Satisfaction Study is based on responses from more than 1,450 new-vehicle dealers. The study was fielded between February and March 2012.

About JD Power and Associates

Headquartered in Westlake Village, Calif., JD Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction.  The company’s quality and satisfaction measurements are based on responses from millions of consumers annually.  For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. JD Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

McGraw-Hill announced on September 12, 2011, its intention to separate into two public companies: McGraw-Hill Financial, a leading provider of content and analytics to global financial markets, and McGraw-Hill Education, a leading education company focused on digital learning and education services worldwide. McGraw-Hill Financial’s leading brands include Standard & Poor’s Ratings Services, S&P Capital IQ, S&P Indices, Platts energy information services and JD Power and Associates. With sales of $6.2 billion in 2011, the Corporation has approximately 23,000 employees across more than 280 offices in 40 countries. Additional information is available at http://www.mcgraw-hill.com/.

Media Relations Contacts:

Gal Wilder; Cohn & Wolfe; Toronto, Ontario; (416) 924-5700; [email protected]
Beth Daniher; Cohn & Wolfe; Toronto, Ontario (647) 259-3290; [email protected]
John Tews; JD Power and Associates; Troy, Mich.; (248) 680-6218; [email protected]

Follow us on Twitter: @JDPower

No advertising or other promotional use can be made of the information in this release without the express prior written consent of JD Power and Associates. www.jdpower.com/corporate

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Stronger Relationships between Dealers and Finance Providers Help Drive Record Level Canadian Dealer Satisfaction

2013-05-21

jdp-root

TORONTO: 21 May 2013 — Canadian automotive dealer satisfaction with finance providers improves significantly in 2013, not only surpassing the pre-financial crisis level, but also setting a record across all four finance segments, according to the JD Power & Associates 2013 Canadian Dealer Financing Satisfaction Study^SM released today.The study, now in its 15th year, examines dealer satisfaction with finance providers in four segments: prime retail credit; retail leasing; floor planning; and sub-prime retail credit.  

KEY FINDINGS

• Overall dealer satisfaction increases substantially across all four segments in 2013.
• Several of the best practices that drive satisfaction are relationship based.
• Dealer satisfaction increases when sales representatives visit dealers four times a year and provide clear program updates.
• When sales representatives help facilitate re-hashing deals, satisfaction increases significantly.

In 2013, dealer satisfaction is the highest it has been since the study’s inception in 1998. Satisfaction in prime retail credit increases to 883 (on a 1,000-point scale), and increases to 858 in retail leasing (each up 24 points from 2012). Satisfaction in floor planning is 910, a 21-point increase from 2012, and 846 in sub-prime retail credit, up 19 points year over year. 

After achieving near-record automotive sales of 1.67 million units in 2012 and strong sales in the first quarter of 2013, Canadian automotive dealers are optimistic about their business. Three in four dealers anticipate their 2013 sales to continue to increase, with only one percent indicating they expect their sales to decrease, according to JD Power & Associates’ Power Information Network® (PIN) data.

“While strong sales may bring  a positive perspective to Canadian automotive dealers, the effort by lenders to build a partnership relationship with dealers and meet their increasingly diverse financing needs is what has helped propel dealer satisfaction to an unprecedented level,” said Lubo Li, senior director and financial practice leader at JD Power & Associates, Toronto.

Dealer satisfaction in the prime retail credit segment and sub-prime retail credit segments is measured in three factors: finance provider offering; application/approval process; and sales representative relationship. In the retail leasing segment, satisfaction is measured in four factors: finance provider offering; application/approval process; vehicle return process; and sales representative relationship. In the floor planning segment, satisfaction is measured in four factors: finance provider credit line offering; floor plan support; floor plan portfolio management; and sales representative relationship.

The study finds that Canadian dealer satisfaction with finance providers is heavily influenced by the relationship with their lender. Three relationship-based best practices in particular drive a positive dealer financing experience. 

First, personal engagement with dealers is paramount to nurturing the ongoing partnerships, with the lenders whose sales representatives visit dealerships at least four times per year achieving the highest levels of satisfaction. When providers empower sales representatives to modify or amend deals, overall satisfaction increases by 52 points in prime retail credit.

Second, when personal visits by sales representative include ongoing program updates and clarifications, dealers feel most connected to lenders. Clarity in communications allows dealers to more effectively manage their business and confidently communicate to their customers with respect to obtaining financing. Providers that equip their sales representatives with the tools to effectively review program components and offer clarity are well-positioned to achieve higher levels of dealer satisfaction. For example, in the retail leasing segment, when dealerships completely understand their finance provider’s program offerings, satisfaction increases by 129 points, and when finance program training is provided to dealers, satisfaction increases by 83 points.

Finally, the sales representative role is also that of a facilitator. While many finance providers may not allow their sales representatives to re-hash deals, dealers generally like when sales representatives are playing this role. When sales representatives help facilitate a consistent review of deals, satisfaction increases significantly. Lenders that provide programs and tools to re-hash deals without sales representative intervention or that enable sales representatives to connect dealers with the appropriate personnel achieve the highest levels of satisfaction.

“When JD Power released the 2011 Canadian Dealer Financing Satisfaction Study, the company provided industry insights regarding streamlining the approval and funding process, providing consistent contacts and messaging and communicating with dealers through their preferred channels,” said Li. “In 2013, it’s clear that lenders have leveraged these recommendations to significantly improve their relationships with dealers and create a highly satisfying experience. We continue to encourage both dealers and lenders to work closely together to continue to improve satisfaction.”

Prime Retail Credit Segment Rankings

BMW Financial Services ranks highest in the prime retail credit segment with a score of 948, up 40 points from 2012, and performs particularly well in the finance provider offerings; application/approval process; and sales representative relationship factors. Mercedes-Benz Financial Services ranks second in the segment with a score of 933, declining by 25 points from 2012. VW Credit Canada (908) ranks third overall and improves the most year over year (+48 points). 

Retail Leasing Segment Rankings

BMW Financial Services ranks highest in the retail leasing segment with a score of 947, and increase of 41 points from 2012, and performs particularly well in all four factors: application/approval process; finance provider offerings; sales representative relationship; and vehicle return process. Mercedes-Benz Financial Services follows in the rankings at 927, declining 23 points from 2012. VW Credit Canada increases by 58 points year over year to 899, leading its competitors in the vehicle return process and finance provider offering factors. GM Financial posts the largest gain in overall satisfaction, with an increase of 69 points in 2013. BMW Financial Services meets or exceeds dealership credit decision expectations—the most influential key performance indicator—100 percent of the time (up 7 percentage points from 2012). VW Credit Canada, Ford Credit Canada and Mercedes-Benz Financial Services each meet this KPI 98 percent of the time. 

Floor Planning Segment Rankings

Ford Credit Canada ranks highest in the floor planning segment, achieving a score of 946, up by 13 points from 2012. Scotiabank (942) ranks second, increasing by 16 points year over year. Both financial providers perform particularly well in all four factors. VW Credit Canada ranks third with a score of 929, improving by 2 points in floor plan portfolio management and also leads competitors in offering multiple types of floor planning reports. Ford Credit Canada trails slightly by one percentage point in offering multiple floor planning reports. 

The 2013 Canadian Dealer Financing Satisfaction Study is based on responses from more than 1,300 new-vehicle dealerships in Canada. The study was fielded between February 2013 and March 2013. 

About JD Power & Associates

Headquartered in Westlake Village, Calif., JD Power & Associates is a global marketing information services company providing forecasting, performance improvement, social media and customer satisfaction insights and solutions. The company’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. JD Power & Associates is a business unit of McGraw-Hill Financial.

About McGraw Hill Financial

McGraw Hill Financial (NYSE: MHFI), a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Iconic brands include: Standard & Poor’s Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, JD Power & Associates, McGraw Hill Construction and Aviation Week. The Company has approximately 17,000 employees in 27 countries. Additional information is available at www.mhfi.com..

Media Relations Contacts:

Gal Wilder; Cohn & Wolfe; Toronto, Canada; (647) 259-3261; [email protected]
Beth Daniher; Cohn & Wolfe; Toronto, Canada; (647) 259-3279; [email protected]
John Tews; JD Power and Associates; Troy, Mich.; (248) 680-6218; [email protected]

Follow us on Twitter: @JDPower

No advertising or other promotional use can be made of the information in this release without the express prior written consent of JD Power and Associates. www.jdpower.com/corporate

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