Auto Lenders Confront Growing Ranks of Financially Vulnerable Customers, JD Power Finds
2024-11-11
jillian.breska
TROY, Mich.: 14 Nov. 2024 — With average new-vehicle loan interest rates still hovering near 20-year highs[1] and the average new-vehicle retail transaction price now at $44,467,[2] many auto loan customers are coming away from the lending process with a dose of sticker shock. According to the JD Power 2024 U.S. Consumer Financing Satisfaction Study,SM released today, the challenges of the current marketplace are being compounded by a deterioration in consumer financial health.[3]
Specifically, the study finds that among mass market auto loan customers, the number of those characterized as financially vulnerable has increased 11 percentage points since 2021 while the number of financially healthy customers has decreased 13 percentage points. Within the group of financially vulnerable customers, just a single percent of them say they can cover six months of living expenses.
“Auto lenders really need to tailor their offerings for the realities of the current market and recognize that a large portion of their customers may face some very real challenges managing their finances,” said Patrick Roosenberg, senior director of automotive finance intelligence at JD Power. “Lenders need to ensure that their digital bill-pay tools encompass a wide range of options, such as extensions, due date changes, personalized financial planning/budgeting tools and one-on-one advice to help consumers plan for the future.”
Study Rankings
Lincoln Automotive Financial Services ranks highest in customer satisfaction among premium lenders, with a score of 722 (on a 1,000-point scale). Mercedes-Benz Financial Services (719) ranks second and BMW Financial Services (703) ranks third.
Ford Credit ranks highest among mass market lenders, with a score of 669. Southeast Toyota Finance (664) ranks second and Toyota Financial Services (650) ranks third.
The U.S. Consumer Financing Satisfaction Study was redesigned for 2024. Scores are not comparable year over year with previous studies. The study measures overall auto financing customer satisfaction across eight core dimensions (in order of importance): level of trust with provider; loan/lease offering met needs; experience managing my loan/lease; keeps me informed about my loan/lease; experience obtaining loan/lease; makes it easy to do business with; digital channels; and people. This year’s study was fielded from November 2023 through August 2024 and is based on responses from 11,071 customers who financed a new or used vehicle through a loan or lease within the past three years.
For more information about the U.S. Consumer Financing Satisfaction Study, visit https://www.jdpower.com/business/resource/us-consumer-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 modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 55 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. The JD Power auto-shopping tool can be found at JDPower.com.
Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]
About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info
1Federal Reserve Bank of St. Louis, Finance Rate on Consumer Installment Loans at Commercial Banks, New Autos 48-Month Loan https://fred.stlouisfed.org/series/TERMCBAUTO48NS
2JD Power and GlobalData September Forecast https://www.jdpower.com/business/press-releases/jd-power-globaldata-automotive-forecast-september-2024
3JD Power measures the financial health of any consumer as a metric combining their spending/savings ratio, creditworthiness, and safety net items like insurance coverage. Consumers are placed on a continuum from healthy to vulnerable.
