Category: Auto Finance|Consumer LendingCanada|United States

With Fewer Opportunities, Auto Lenders in Canada Need to Deliver on Value Proposition, JD Power Finds

2022-05-10

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As supply-chain issues affect available inventory at auto dealerships in Canada, it also means fewer new- and used-vehicle transactions during which lenders can provide a high level of service to dealers and deliver on their value proposition. According to the JD Power 2022 Canada Dealer Financing Satisfaction Study,^SM released today, overall satisfaction increased across all four segments in this year’s study—despite the decline in new-vehicle transactions.

“Dealers are looking for a seamless, speedy interaction with a lender, and lenders need to be laser-focused on satisfying that need—especially when the volume of transactions is reduced,” said Patrick Roosenberg, director of automotive finance intelligence at JD Power. “Even with increased automation in the approval and funding processes, lenders must find a way to differentiate themselves from other lenders, whether it’s system-related or actions taken by funding, retail credit or sales reps.”

Historically, on-site visits have been considered an essential cornerstone in developing and maintaining dealer-lender relationships. However, the study shows that just 4% of dealers say on-site visits are their preferred method of contact with their sales rep and may not lead to additional opportunities. “With dealer preference shifting towards phone, email and text interactions—and away from onsite visits—sales reps need to know which channel a dealer prefers to be more effective in a hyper-competitive market. In other words, the right message through the right channel at the right time.”

Study Rankings

Ford Credit ranks highest in the retail—captive segment with a score of 919 (on a 1,000-point scale). Hyundai Motor Finance (912) ranks second and Kia Motors Finance (909) ranks third. The segment average is 895.

In the retail—non-captive prime segment, TD Auto Finance ranks highest for a fifth consecutive year, with a score of 929. Scotiabank (914) ranks second. The segment average is 905.

In the retail—non-captive non-prime segment, TD Auto Finance ranks highest with a score of 919. The segment average is 913.

In the lease segment, Ford Credit ranks highest with a score of 918. Hyundai Motor Finance (908) ranks second and Honda Financial Services (904) ranks third. The segment average is 873.

The 2022 Canada Dealer Financing Satisfaction Study, now in its 24^th year, captures 6,919 finance provider evaluations across the four segments from new-vehicle dealerships in Canada. The study was fielded in February-March 2022.

For more information about the Canada Dealer Financing Satisfaction Study, visit
https://canada.jdpower.com/financial-services/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 behavior, 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] 
Nicole Herback, NATIONAL; 403-200-1187; [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

 

Canadian Auto Lenders Recasting Themselves as Customer Problem Solvers, JD Power Finds

2017-05-22

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COSTA MESA, Calif.: 23 May 2017 — Amid fierce competition, razor-thin yield spreads and the specter of plateauing auto sales, Canadian auto lenders are finding the secret to growth is delivering highly tailored solutions to auto buyers and dealer challenges, according to the JD Power 2017 Canadian Dealer Financing Satisfaction Study,^SM released today.

The study finds that dealers are most satisfied with their lenders when they are assigned a dedicated primary buyer or buying team. Tasked with everything from making a credit decision to restructuring a deal, these frontline lending personnel play an increasingly critical role in shaping the dealer/lender relationship.

“In the current marketplace, the difference between closing a deal and losing a customer to the dealership down the street will frequently be determined by the finance department’s ability to secure the right loan at the right price,” said Jim Houston, senior director of automotive finance at JD Power. “The more adept these financial professionals are at helping dealers address specific challenges along the way, the more business they will ultimately do with that dealer.”

The study, now in its 19th year, has been significantly redesigned to now evaluate auto lenders in two primary categories: captive (lender that is wholly owned by a manufacturer or is directly affiliated with a manufacturer) and non-captive (an independent lending institution). The study measures dealer satisfaction with captive finance providers across four factors: application/approval process; relationship; provider offerings; and lease return.  The measurement criteria for non-captive lenders are the same, with the exception of the lease return factor.

Dealer satisfaction in the retail captive segment is 868 (on a 1,000-point scale), and in the retail non-captive segment, satisfaction is 866.

Following are additional findings of the 2017 study:

• Primary underwriting teams affect dealer satisfaction: Dealers who have the highest levels of satisfaction with particular lenders are those who have a primary buyer or buying team assigned specifically to their dealerships. Employing a primary buyer/team structure cultivates a greater intent to send more business to those providers, 10% for captive lenders and 24% for non-captive lenders.

• Credit desk becomes critical dealer touchpoint: Contrary to conventional wisdom, among captive lenders, the dealer relationship with the lender credit desk is a more significant driver of dealer satisfaction than the relationship with sales representatives. Among non-captive lenders, that ratio is flipped, with sales representative relationships driving higher overall satisfaction than credit desk relationships.

• Lender as problem solver: For both captive and non-captive lenders, dealers overwhelmingly turn to the credit desk as the first point of contact when there is a problem.  The most common reasons for contacting the credit desk are credit decision; funding questions; held contracts; stipulations; deal restructuring; program changes/updates; and dealer reserve questions.

• Timing is everything: When it comes to on-site visits by lender sales representatives, dealer satisfaction is highest when lenders visit at the beginning or middle of the month; in the morning; never on a Monday; and for no longer than 30 minutes.

Lender Rankings

BMW Financial Services ranks highest in the captive lender segment with a score of 972.  Mercedes-Benz Financial Services (930) ranks second; Ford Credit Canada (899) ranks third; and Honda Financial Services (877) ranks fourth.

Among non-captive lenders, Bank of Montreal (897) ranks highest, followed by Scotia Dealer Advantage (896); TD Auto Finance (875); and Scotiabank (868).

The 2017 Canadian Dealer Financing Satisfaction Study captures approximately 3,750 finance provider evaluations across the two segments from new-vehicle dealerships in Canada. The study was fielded in January-February 2017.

See the online press release at http://www.jdpower.com/pr-id/2017063.

Media Relations Contacts
Geno Effler; Costa Mesa, Calif.; 714-621-6224; [email protected]
John Roderick; St. James, N.Y.; 631-584-2200; [email protected]

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.

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