Category: Auto Finance|Consumer LendingUnited States

JD Power Enters F&I Space with Suite of Protection Products

2018-01-22

jdp-root

COSTA MESA, Calif.: 23 Jan. 2018 — JD Power, the global leader in consumer insights, announced the launch of JD Power Automotive Protection Products for new-car buyers. These finance and insurance products are available now at an expanding network of new-car dealerships across the country.

“The finance and insurance market is fragmented and is often perceived negatively by consumers,” said Chris Sutton, Vice President of U.S. Automotive Retail Practice for JD Power. “JD Power has an obligation to stand up for the consumer in everything that we do. These products carry our name because the terms and conditions have been adjusted, as well as the selling process. Customer satisfaction, both immediate and long term, is the goal. 

“The confidence inspired by our brand is something we believe will help lead new-car dealers to more sales of these important products and more satisfaction with the dealer-customer relationship in the long term. This will result in a win-win for consumers buying new cars and for dealerships selling these products,” Sutton added.

JD Power Automotive Protection Products include extended service warranties, tire protection, surface protection, GAP, key replacement, lifetime warranty, dent & ding, maintenance, high tech coverage and windshield protection as an add-on.

JD Power will provide participating dealers with rigorous training programs and business management support through a proprietary CARE Selling  process designed with sales agency partner Bill Holcomb to drive sales during the final steps of purchase while promoting customer satisfaction and brand loyalty. “CARE Selling has been developed to address evolving customer needs and expectations,” Holcomb said. “Our process, coupled with customized products, has documented success.”

Consumers also will be surveyed after each claims process to  ensure an exceptional customer experience commensurate with the JD Power brand name.

To learn more about JD Power Automotive Protection Products, visit http://www.jdpprotect.com or call 850-376-2482.

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
Geno Effler; JD Power; 714-621-6224; [email protected]

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

# # #

 

 

Auto Lenders’ Differing Digital Approach Creates Wide Satisfaction Gap between Top and Bottom Performers, JD Power Finds

2017-11-10

jdp-root

COSTA MESA, Calif.: 13 Nov. 2017 — Digital auto loan applications have the power to increase customer satisfaction, but wide variance in the execution of the digital application process has created a significant performance gap between top and bottom performing lenders, according to the JD Power 2017 U.S. Consumer Financing Satisfaction Study,^SM released today. The top-performing mass market and luxury lenders rate significantly higher than the lowest performers (8.75 vs. 7.93 and 8.85 vs. 7.54, respectively, on a 10-point scale) in the most heavily weighted website attribute in the study: range of services that can be performed online.

“With such erratic approaches to digitalization, many auto lenders are failing to successfully capitalize on tremendous cost-cutting opportunities that have proven to boost customer satisfaction,” said Jim Houston, Senior Director of Automotive Finance at JD Power. “With some lenders varying widely on ease-of-use satisfaction scores for their digital offerings, a huge opportunity is going unmet by many.”

Following are key findings of the study:

• Digital loan applications generate significantly higher satisfaction—for some: While the digital application channel generates significantly higher levels of overall satisfaction among both mass market and luxury customers, many are waiting longer for a credit decision than those utilizing dealer representatives. Just 30% of customers applying online received a credit decision within 15 minutes vs. 46% who filled out a paper application with a dealer.

• Time given to make first payment provides greatest impact on onboarding experience: High-ranking mass market and luxury lenders perform highest on time given to make first payment, allowing an average lead time of 21.2 days for mass market customers and 18.4 days for luxury customers prior to first payment due date.

• Autopay and Web-based payment drive highest customer satisfaction: Mass market customers paying by hard-copy check are significantly less satisfied than those using autopay (800 vs. 851, respectively, on a 1,000-point scale).

Study Rankings

Lincoln Automotive Financial Services ranks highest among luxury brands, with a score of 890. Lexus Financial Services (875) ranks second and Acura Financial Services (869) ranks third.

Ford Credit ranks highest among mass market brands, with a score of 857. BB&T/RAC (855) ranks second and Honda Financial Services (855) ranks third.

The 2017 U.S. Consumer Financing Satisfaction Study measures overall customer satisfaction in four factors (listed alphabetically): billing and payment process; onboarding process; phone contact; and website. Satisfaction is calculated on a 1,000-point scale. The study is based on responses from more than 14,500 customers who financed a new- or used-car loan or lease within the past four years and was fielded in July-August 2017.

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

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

# # #

 

Credit Desk Becomes Auto Lenders’ Secret Weapon for Driving Dealer Satisfaction, JD Power Finds

2017-08-11

jdp-root

COSTA MESA, Calif.: 14 Aug. 2017 — Great relationships trump low interest rates and product mix when it comes to automobile dealer satisfaction with lending institutions. According to the JD Power 2017 U.S. Dealer Financing Satisfaction Study,SM released today, the interactions between dealers and frontline personnel working in the lender’s credit department are at the epicenter of that relationship.

“Across all segments of auto lenders—non-captive, captive mass market and captive luxury—the dealer’s relationship with the credit desk is a key driver of overall satisfaction and the lynchpin to a sustained, fruitful relationship,” said Jim Houston, Senior Director of the Automotive Finance Practice at JD Power. “Because the credit staff is often the first point of contact, not just for credit decisions, but also for problem resolution, the role has to evolve, with credit analysts becoming much broader subject matter experts and frontline sales personnel taking on more focused roles.”

Following are some of the key findings of the study:

• Credit desk becomes “tip of the sword” in building dealer satisfaction: For non-captive, captive luxury and captive mass market lenders, the credit desk represents more than half of the survey weight for overall satisfaction, compared with the impact of sales representatives. Overall, the dealer/lender relationship outweighs application and approval process, lender offerings and lease return as the single most important variable associated with high levels of dealer satisfaction.

• Sales reps move away from problem solving toward selling value: Dealers overwhelmingly indicate that the credit desk is their first point of contact when looking to resolve problems, far outpacing sales representatives, sales support staff and regional managers. As such, dealer satisfaction with sales reps is highest when reps focus on portfolio performance review, dealership performance consulting and customer retention vs. problem resolution and training.

• Finding the Goldilocks scenario for dealer communications: The optimal dealer communications mix for lenders involves a predictable cadence of monthly visits paired with weekly calls and emails. When touch points outside of these preferred parameters are used, overall satisfaction with sales reps falls by as much as 30 index points (on a 1,000-point scale).

“What this study really tells us is that many lenders should be taking a good long look at the way they are currently staffed and think about transitioning some of their most seasoned industry experts into problem-solving roles in the credit department,” Houston added. “Correspondingly, they also need to think about how they’re currently selling and re-evaluate whether it makes sense to have their best problem solvers on the road making sales calls.” 

Methodology

The study, which was significantly redesigned for 2017, measures auto dealer satisfaction in four segments of lenders: non-captive, captive mass market, captive luxury market and floor planning. The non-captive analysis evaluates the dealer/lender relationship across three factors: relationship, provider offerings and application/approval process. In the captive mass market and luxury segments, four factors are evaluated: relationship, provider offerings, application/approval process and lease return. Three factors are measured in the floor planning segment: relationship, portfolio management and provider credit line.

The 2017 U.S. Dealer Financing Satisfaction Study captures more than 11,622 finance provider evaluations across the four segments. These evaluations were provided by 4,245 new-vehicle dealerships in the United States.

Study Rankings

Captive Luxury
Mercedes-Benz Financial Services ranks highest among lenders in the captive luxury segment for the third consecutive year, with a score of 972 points. It is followed by BMW Financial Services (955) and Infiniti Financial Services (953).

Captive Mass Market
MINI Financial Services ranks highest among lenders in the captive mass market segment, with a score of 954 points. Following in the mass market rankings are Volkswagen Credit (916) and Ford Credit (887).

Non-Captive
TD Auto Finance ranks highest among lenders in the non-captive segment, with a score of 912 points. Citizens One Auto Finance follows with a score of 909 and Chase Automotive Finance and Huntington National Bank tie for third with a score of 906.

Floor Plan
Mercedes-Benz Financial Services also ranks highest among floor planning lenders, with a score of 986 points. TD Auto Finance follows with a score of 982 and Huntington National Bank and Volkswagen Credit tie for third with a score of 970.

For more information about the 2017 U.S. Dealer Financing Satisfaction Study, visit http://www.jdpower.com/resource/us-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
Geno Effler; Costa Mesa, Calif.; 714-621-6224; [email protected]
John Roderick; St. James, N.Y.; 631-584-2200; [email protected]

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

 

Dealer Relationships Critical For Lenders in Competitive Market, JD Power Study Says

2016-08-12

jdp-root

DETROIT: 15 August 2016 — The relationships auto finance providers develop with dealerships are critical to dealer satisfaction and to remaining competitive in the market, especially as the new-vehicle sales market tightens, according to the JD Power 2016 U.S. Dealer Financing Satisfaction Study,^SM released today.

A combination of slowing new-vehicle sales and an uncertain used-car market is contributing to an already contested auto-lending environment. Technology has eliminated disparity of speed in financing, leaving lenders to differentiate themselves by the relationship they are able to form with the dealership.

“Speed has been king and the area lenders have traditionally focused on, but as the market gets tougher, lenders need to center their attention on their relationships with dealers, or they are going to lose business,” said Jim Houston, senior director of the automotive finance practice at JD Power. “Lenders need to move beyond a transactional relationship with dealers to a richer consultative partnership. Lenders with a dealer-centric culture across their organization—not just in various pockets of the business—are the ones that are most likely to excel.”

Houston noted that in building a dealer-centric culture, lenders must understand their dealers’ businesses and goals, which helps establish them in the eyes of dealers as their business partner and problem solver. That starts with communication with the dealer. The study finds that fewer than half of dealers receive consistent sales rep calls or visits, both of which can boost overall satisfaction by as much as 68 points and 75 points, respectively, on a 1,000-point scale.  But it’s more than just the frequency of the contact, it’s the nature of those touch points that adds value to the relationship.

“Dealers value a lender that can help them handle the tough issues and solve those ‘outside-the-box’ situations,” said Houston. “This is where having the right people focused on their dealers and helping them execute their strategic plan is essential.”  

Opportunities to Excel and Grow Business

The study identifies three areas of opportunity for lenders that will help them enhance their dealer relationships: 1) Consistent performance among their dealer relationship managers; 2) Identification of their best dealers and a prioritization of those relationships; and 3) Efforts that focus on areas most important to dealers.  

“These are the things dealers say they want from their lenders, but are not necessarily getting on a consistent basis,” said Houston. “When the market gets tough, lenders that meet dealer expectations are going to get a greater share of the business.”

Findings of the study show that high satisfaction with lenders leads dealers to increase the amount business they send to those respective lenders over the next year. Falloff is swift when satisfaction declines: When satisfaction scores are 900 points or higher, 62% of dealers say they are likely to increase the amount of business they send to the lender over the next year. When satisfaction falls to between 800 and 889, only 37% of dealers indicate they intend to send more business to that lender. When satisfaction dips to 700-799, only 22% of dealers intend to increase business with that lender.

Other key findings of the study include:

• Speed Still Matters: Speed still plays a significant role when dealers are choosing lending partners.  When lenders fund error-free contracts on the same day as they are submitted, dealer satisfaction increases by as much as 64 points. When lenders notify dealers of contract issues or errors within four hours after they are submitted, satisfaction increases by as much as 60 points.  
• Exceptions to the Rule: Dealers want their lending partners to value the total relationship. In some cases, this means providing exceptions when warranted. A well-managed exception process can increase overall satisfaction by up to 79 points. 

Dealer Financing Satisfaction Rankings

Prime Retail Credit

Mercedes-Benz Financial Services ranks highest among lenders in the prime retail credit segment for a second consecutive year, with a score of 961. Following in the rankings are BMW Financial Services (959); Alphera Financial Services (941); Lincoln Automotive Financial Services (936); and Infiniti Financial Services (930).

Retail Leasing

Mercedes-Benz Financial Services ranks highest among lenders in the retail leasing segment for a second consecutive year, with a score of 982. Following in the rankings are BMW Financial Services (958); Ford Credit (913); Volvo Car Financial Services (912); and Subaru Motors Finance (911). 

Floor Planning

Mercedes-Benz Financial Services ranks highest among floor planning lenders for a sixth consecutive year, with a score of 986. Following in the rankings are BMW Financial Services (975); Huntington National Bank (969); Hyundai Motor Finance (945); and Kia Motors Finance (945).  

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 2016 U.S. Dealer Financing Satisfaction Study captures more than 20,000 finance provider evaluations across the four segments. These evaluations were provided by 3,100 new -vehicle dealerships in the United States.

For more information about the U.S. Dealer Financing Satisfaction Study, visit

http://www.jdpower.com/resource/us-dealer-financing-satisfaction-study.  

See the online press release at http://www.jdpower.com/pr-id/2016149.

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

 

Highest-Performing Auto Finance Providers Consistently Satisfy Consumers throughout Life of the Lease or Loan

2015-11-18

jdp-root

WESTLAKE VILLAGE, Calif.: 19 November 2015 — Automotive finance providers need to focus their efforts on servicing  processes, anticipating the changing needs as well as the diversity of their customers to achieve high levels of satisfaction, according to the JD Power 2015 U.S. Consumer Financing Satisfaction Study^SM released today.

The study examines the overall customer experience with financing either an automotive loan or lease. The study measures satisfaction among customers who financed or leased their vehicle indirectly through a dealer or directly through an auto finance provider in four key factors: onboarding process; billing and payment process; website; and phone contact. The study is conducted in two vehicle segments: luxury and mass market. Satisfaction is calculated on a 1,000-point scale.

“The higher-performing companies do a good job of satisfying their customers throughout the life of the loan or lease,” said Mike Buckingham, senior director of the automotive finance practice at
JD Power. “Once the new-car smell goes away, it’s the day-to-day handling of the account that is critical, and that’s where some companies fall.”

Buckingham noted that most of the providers do a good job in the initial onboarding and loan/lease setup, but as consumers experience changes in their life or have informational needs, getting quick support from their provider is critical in order to maintain high levels of satisfaction. “The higher-performing brands are adept at satisfying a diverse consumer base that has different needs based on both age and product type,” said Buckingham.

Following are some of the key findings in this year’s study:

• Luxury Car Buyers More Satisfied. Overall satisfaction is 840 in the luxury segment and 817 in the mass market segment.
• ŸLoan and Lease Experiences Not Created Equally. The loan and lease experience differs by segment, with overall satisfaction in the luxury segment similar for loans and leases (840 and 839, respectively) In contrast, satisfaction in the mass market segment is significantly higher for loans than for leases (821 and 798, respectively).
• ŸSatisfaction Equals Loyalty. Ensuring customer satisfaction is critical for finance providers, as more than 96% of highly satisfied customers (overall satisfaction scores of 900 points or more) say they “definitely will” use their current lender in the future.
• ŸDealer’s Choice. Nearly 40% of customers indicate they selected their provider based on inputs other than dealer recommendations.

2015 U.S. Consumer Financing Satisfaction Rankings

Lincoln Automotive Financial Services (873) ranks highest in the luxury segment for a third consecutive year and performs particularly well in the onboarding process, billing and payment process and phone contact factors. BMW Financial (853) ranks second and Lexus Financial Services (850) ranks third.

Ford Credit ranks highest in the mass market segment with a score of 838. Ford Credit performs particularly well in the onboarding process and phone contact factors. Bank of America (834) ranks second and Toyota Financial Services (832) ranks third.

The 2015 U.S. Consumer Financing Satisfaction Study is based on responses from 19,522 new- and used-vehicle purchasers or lessees who obtained a vehicle loan or lease. The study includes vehicles financed for model years 2012 through 2015. The study was fielded from late July through early September 2015.

Media Relations Contacts

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

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

About McGraw Hill Financial www.mhfi.com 

 

Auto Dealers That Embrace Technology Deliver a More Satisfying Sales Experience

2015-11-11

jdp-root

WESTLAKE VILLAGE, Calif.: 12 November 2015 — Use of technology—i.e., tablets and computer displays—by dealers during the sales process can substantially improve customer satisfaction among new-vehicle buyers, according to the JD Power 2015 U.S. Sales Satisfaction Index (SSI) Study^SM released today.   

The study, now in its 29th year, measures satisfaction with the sales experience among new-vehicle buyers and rejecters—those who shop a dealership and purchase elsewhere. Buyer satisfaction is based on four factors: working out the deal (17%); salesperson (13%); delivery process (11%); and facility (10%). Rejecter satisfaction is based on five factors: salesperson (21%); fairness of price (8%); experience negotiating (8%); facility (7%); and variety of inventory (7%). Satisfaction is calculated on a 1,000-point scale. Overall sales satisfaction improves to 688 in 2015 from 686 in 2014.

Given an increasingly tech-savvy consumer, dealerships that integrate technology tools into their sales process deliver a superior customer experience. Dealers that fail to invest in consumer-facing technologies risk being trumped by competitors. According to the study, among both non-premium and premium buyers, use of tablets by sales personnel to perform such tasks as record customer vehicle needs, demonstrate vehicle features and display pricing information yields higher satisfaction with technology usage than when a tablet is not used (8.12 vs. 7.02 and 8.63 vs. 7.52, respectively, on a 10-point scale). Notably, handwritten price quotes have a negative impact on buyer satisfaction with technology usage, with a -0.55 point gap in satisfaction between non-premium buyers when this method is used and when it is not and a -0.45 gap between premium buyers. 

Finance and insurance (F&I) products, such as extended warranties, pre-paid maintenance contracts and tire/road hazard protection are not only highly lucrative for dealers, but satisfaction is also higher among customers who are offered these options. For example, among non-premium owners, satisfaction is 46 points higher when a dealer offers them a pre-paid maintenance contract vs. when they do not (788 vs. 742, respectively), and among premium buyers the gap is 26 points (827 vs. 801). Moreover, when F&I product and pricing/payment options are presented on a computer or tablet screen, satisfaction is higher than when any other method is used, including printed materials, verbal quotes/descriptions and handwritten figures. 

“With retail vehicle sales in the United States in 2015 forecast to reach 14.2 million units[1] and this positive momentum expected to carry into 2016, dealers face challenges in properly servicing a high volume of new-vehicle buyers who are increasingly tech savvy,” said Chris Sutton, vice president of the automotive retail practice at JD Power. “Dealerships should understand that customers want and trust technology and that it can enhance efficiencies. Dealers that disregard it may risk being left behind in 3-5 years. Customers are experiencing interesting uses of technology in many of their other retail transactions—and now expect this in auto.” 

Gen Y[2]—the single most impactful generation on all markets due to numbers and purchase power—is among the buyers flocking to car lots and accounts for 29%¹ of new-vehicle retail sales. Furthermore, average transaction prices for new vehicles exceed $30,000.¹ “There is every incentive for dealers to use the most effective tools available to satisfy customers and build a relationship with them during the initial purchase process. This relationship should translate quickly into future service business. Implementing tools and processes that meet the needs of Gen Y will ultimately benefit all consumers,” said Sutton.

 Following are some of the key findings in this year’s study: 

• Sales Staff Remain Vital to Sales Experience: The most impactful sales satisfaction key performance indicator (KPI)—best practice—is interacting with a salesperson who understands the customer’s needs completely (+106 points). Such salespersons are good listeners, ask relevant questions and are able to deliver on customer requests. This KPI demonstrates that even with the growing prevalence of online communications and emphasis on an efficient transaction, the salesperson still plays a key role.
• 5 of Top 10 KPIs Relate to Working Out the Deal: Among the most impactful KPIs are five that involve making customers feel comfortable (not pressured) and confident they are receiving the most transparent and up-front information to aid their decision-making while at the dealership. Delivering on these best practices improves satisfaction and builds loyalty and advocacy.
• Gen Y Equally Interested in Safety and Protecting Vehicle Value as Other Generations: Among generational groups, Gen Y is as likely to purchase F&I products as other generations. For example, by generation, the following proportions of customers purchase tire/road hazard protection: Gen Y (21%); Gen X (21%); Boomer (20%); and Pre-Boomer (20%).

Brand Sales Satisfaction Rankings

Porsche ranks highest in sales satisfaction among luxury brands, with a score of 752, improving by 14 points from 2014. For a sixth consecutive year, MINI ranks highest among mass market brands, with a score of 762, a 35-point increase from 2014. 

The 2015 U.S. Sales Satisfaction Index (SSI) Study is based on responses from 27,831 buyers who purchased or leased their new vehicle in April or May 2015. The study is a comprehensive analysis of the new-vehicle purchase experience and measures customer satisfaction with the selling dealer (satisfaction among buyers). The study also measures satisfaction with brands and dealerships that were shopped but ultimately rejected in favor of the selling brand and dealership (satisfaction among rejecters), and was fielded between July and September 2015. 

Learn more about the 2015 U.S. Sales Satisfaction Index (SSI) Study at http://www.jdpower.com/resource/us-sales-satisfaction-index-ssi-study 

Media Relations Contacts

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

 About JD Power and Advertising/Promotional Rules www.jdpower.com/corporate

About McGraw Hill Financial www.mhfi.com 

 

Underwriting and Funding Speed Exceed Price as Drivers of Auto Dealer Satisfaction

2015-07-23

jdp-root

WESTLAKE VILLAGE, Calif.: 27 July 2015—In the highly competitive auto lending environment,  the level of service provided, including technology and a collaborative and consultative staff, is more important than price, as dealers are willing to pay a premium for high-quality service, according to the JD Power 2015 U.S. Dealer Financing Satisfaction Study.^SM

The study measures dealer satisfaction with finance providers in four segments: prime retail credit; non-prime retail credit; retail leasing; and floor planning. Satisfaction is calculated on a 1,000-point scale. Dealer satisfaction in the prime retail credit segment is 868, and in the non-prime retail credit segment satisfaction is 828. Dealer satisfaction in the retail leasing segment is 894, while in the floor planning segment, satisfaction is 943.

While dealerships continue to seek ways to improve their margins, they also seek providers to speed customer throughput in the sale or lease of their vehicles and in many instances are willing to pay a premium for a higher-quality financing experience. Sixty-three percent of dealers are willing to pay an additional 0.50-0.60 basis points on their loan terms (down 4 percentage points from 2014) to receive good service from their lenders in the prime retail credit segment.

The auto industry works hard to establish high-value, one-on-one relationships with their customers when it comes to the sales and service processes. The same principle applies to dealers when it comes to the relationship with their lenders in all consumer-facing products—prime retail credit, non-prime retail credit and retail leasing. Auto lending continues to be a relationship business. Findings of the study show that assigning/aligning dedicated underwriters positively impacts dealer satisfaction by providing higher levels of service and collaboration.

A dealer-focused sales rep relationship has a positive effect on 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 (935 vs. 754, respectively). Among dealers with a focused relationship in which all sales rep relationship key performance indicators (KPIs) are met, 68 percent say they “definitely will” increase the percentage of business they conduct with their provider.

“Speed of funding has become a critical differentiator in the eyes of the dealer as efficient cash flow is demanded by dealer management, not absolute finance and insurance income,” said Michael Buckingham, senior director of the auto finance practice at JD Power. “Fast application processing allowing dealers to speed the customer delivery process is also critical. Auto dealers are willing to pay a price premium for these services.”

Dealers don’t want loan processors, they want collaborative consultants who can support them every step of the way. High-performing lenders provide a range of services that resonates with dealers, which include helping them understand the variety of lending options available and how they can maximize profits, reduce expenses and retain customers.

KEY FINDINGS

• ŸA majority (84%) of dealers indicate their lender provides a dedicated underwriter person and or team who contacts them frequently, providing valued-added communications.
• Overall satisfaction is highest when sales reps engage in discussions about customer retention (922), dealership performance consulting (916) and training and clarification of programs (916), compared with when they do not (831, 818 and 816, respectively).
• In the floor planning segment, 85 percent of dealers are assigned a primary support representative or team who can quickly respond to their needs and questions. Additionally, 75 percent of dealers indicate being able to immediately reach their support staff. When this occurs, satisfaction is 975. When dealers have to wait one hour to reach their support staff, satisfaction declines significantly to 938.
• ŸeContracting, or lender-provided technology that enables same-day contract funding, improves dealer satisfaction. When dealers use eContracting or a proprietary technology provided by their lender, overall satisfaction averages 913, compared with 856 when lenders do not use this service. Additionally, 56 percent of dealers indicate that faster funding time is the main reason to use eContracting. On average, there is a 39 percent increase in dealers’ business with their finance provider due to eContracting.
• The study finds that dealerships retain 59 percent of their leasing customers through retention programs and consumer guidance provided by their lender.
• ŸThree-fourths (75%) of dealers indicate increasing retail business with their provider because of their floor planning relationship.

Dealer Financing Satisfaction Rankings

Prime Retail Credit

Mercedes-Benz Financial Services ranks highest among lenders in the prime retail credit segment, with a score of 971. Following in the rankings are MINI Financial Services (962) and Alphera Financial Services (961).

Retail Leasing

Mercedes-Benz Financial Services ranks highest among lenders in the retail leasing segment, with a score of 978. Following in the rankings are BMW Financial Services (961) and Lincoln Automotive Financial Services (956).

Floor Planning

Mercedes-Benz Financial Services ranks highest among floor planning lenders for a fifth consecutive year, with a score of 986. Following in the rankings are BMW Financial Services (974) and Ford Credit (961).

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 study captures nearly 21,798 finance provider evaluations across the four segments. These evaluations were provided by roughly 3,934 new-vehicle dealerships in the United States.

Media Relations Contacts

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

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

About McGraw Hill Financial www.mhfi.com

 

Automotive Financing Customer Satisfaction Is Not Driven by One Element, But Is Influenced by Processes across the Entire Life of the Loan or Lease

2014-11-19

jdp-root

WESTLAKE VILLAGE, Calif.: 20 November 2014 — Automotive finance providers cannot focus their efforts on only one or two areas of the lending process and expect to have satisfied customers; they need to excel in all areas throughout the life of the loan or lease according to the JD Power 2014 U.S. Consumer Financing Satisfaction Study^SM released today.

The study, which was redesigned for 2014 to include used vehicles and expand the time from the financing origination to four years vs. one year used in previous studies, examines the overall customer experience with financing either an automotive loan or lease. The study measures satisfaction among customers who financed or leased their vehicle indirectly through a dealer or directly through an auto finance provider in four key factors: on-boarding process; billing and payment process; website; and phone contact. The study is conducted in two vehicle segments: luxury and mass market. Satisfaction is calculated on a 1,000-point scale.

“Satisfying auto financing customers is not contingent on excelling in one area; it’s a continuum across the entire process, with the stage set during the on-boarding process—or the initial discussion with customers—and continuing through the billing and payment process,” said Mike Buckingham, senior director of the automotive finance practice at JD Power. “The execution of finance process best practices is more important than the innovation of new tools to complete transactions. All lenders use mostly the same technology, but the ones that execute better across all areas are the ones with the most satisfied customers.”

Buckingham noted that technology does play a key role during the billing and payment process, which is the factor with the most impact on overall satisfaction. Many customers seek not only self-service tools to set up an automatic payment system, but they also want tools to confirm that their payments were received and processed and to check the balance of their account, with many preferring to conduct these activities using their computer, tablet or smartphone.

“Lenders need to make it easy for customers to access their account anytime anywhere,” said Buckingham. “That means providing a website and apps that are reliable and that make the most critical elements of the billing process easily identifiable.”

KEY FINDINGS

• Overall satisfaction in both the luxury and mass market segments is significantly higher for loans on new vehicles (844) than on used vehicles (817). That difference is driven largely by significantly higher satisfaction in the billing and payment process and website factors among customers with a new-vehicle loan origination (846 and 840, respectively) than among those with a used-vehicle financing origination (819 and 817, respectively).
• ŸThe loan and lease experience differs by segment, with overall satisfaction in the luxury segment significantly higher for leases (847) than for loans (840). The opposite is true in the mass market segment, where satisfaction is significantly higher for loans (815) than for leases (807).
• ŸEnsuring customer satisfaction is critical for finance providers, as more than 90 percent of highly satisfied customers (overall satisfaction scores of more than 800 points) indicate they “definitely will” use their current lender in the future. Further, more than 50 percent of customers indicate that they selected their provider based on inputs other than dealer recommendations.
• ŸAvoidance of billing and payment errors is the most influential key performance indicator impacting satisfaction. Incorrect payment amounts listed on statements, misapplied payments, or incorrect/not updated personal account information leave customers with a perception that their finance provider is disorganized.

2014 U.S. Consumer Financing Satisfaction Rankings

Lincoln Automotive Financial Services (867) ranks highest in the luxury segment for the second consecutive year and performs highest in the billing and payment process and website factors. Lexus Financial Services (859) ranks second and Audi Financial Services (854) ranks third.

Volkswagen Credit ranks highest in the mass market segment with a score of 836 and also scores highest in billing and payment process (tied with Ford Credit) and website. Ford Credit ranks second with a score of 835 and Honda Financial Services ranks third with 829.

The 2014 U.S. Consumer Financing Satisfaction Study is based on responses from 20,670 new and used vehicle purchasers or lessees who obtained a vehicle loan or lease. The study includes vehicles financed for model years 2010 through 2014. The study was fielded between July and September 2014.

Media Relations Contacts

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

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

About McGraw Hill Financial www.mhfi.com 

 

JD Power Reports:

Lenders Often Fall Short in Providing Advice and Guidance to First-Time Homebuyers 

1970-01-01

jdp-root

WESTLAKE VILLAGE, Calif.: 13 November 2014 — First-time home buyers report challenges with understanding the mortgage process and the options that are available to them, according to the JD Power 2014 U.S. Primary Mortgage Origination Satisfaction Study^SM released today.

 The study, which has been redesigned in 2014, measures customer satisfaction with the mortgage origination experience in six factors: loan offerings; application/approval process; interaction; closing; onboarding; and problem resolution.  

 Among survey respondents purchasing a home, 58 percent are first-time home buyers. Lack of experience among these customers and uncertainty about the process may influence how they first inquire about a mortgage, with 48 percent heading to a lender’s local office to meet with a loan representative in person and receive personalized advice.

 “Recent National Realtors Association data indicates the percentage of first-time home buyers is well below historical norms. With many prospective borrowers looking for guidance and reassurance, it is imperative that lenders are fully prepared to provide the detail and information these customers desire or the borrowers may decide to stay on the sidelines,” said Craig Martin, director of the mortgage practice at JD Power. “The loan representative is the face of the organization for most borrowers and is relied upon to provide effective explanations, set accurate expectations and ensure consumers have confidence that they are making a good decision.”

 

KEY FINDINGS

Ÿ  Overall customer satisfaction with the mortgage origination process averages 786 (on a 1,000-point scale) in 2014.

Ÿ  Customers want a transparent mortgage process. More than one-third (35%) of all mortgage customers—and 43 percent of first-time home buyers—indicate they do not completely understand the process, resulting in an average decline of 179 points in overall satisfaction.

Ÿ  The majority (54%) of first-time home buyers indicate they don’t fully understand the different loan options available to them. Only 41 percent of first-time buyers and 56 percent of experienced mortgage customers indicate their representative completely explained the types of loans, terms, special programs, fees and options to reduce their down payment.

Ÿ  Consistent communication is another important part of a good borrowing experience.  Satisfaction falls by 236 points when loan representatives fail to call customers back as promised. 

Ÿ  The closing experience is often confusing for customers. Among first-time home buyers, 44 percent indicate that the closing agent didn’t completely explain all of the closing documents vs. 26 percent of experienced customers. Overall satisfaction declines by an average of 144 points when lenders fail to effectively communicate loan documents and terms. 

 

While many mortgage customers obtain information and updates online and by using mobile devices, the study shows that the loan representative is still a key part of the equation. Interestingly, some of the most important things lenders can do to deliver a great experience remain heavily reliant on human interaction.

 

“From describing what will happen during the process in terms a customer can understand to explaining the benefits of different options, the loan representative sets the tone of the experience,” said Martin. “A potential challenge with first-time homebuyers is that they may be afraid to appear uninformed, so they won’t admit when they are confused or don’t understand something.  For a lender to truly stand out, their staff must foster relationships that promote open and honest communication.”

 

2014 U.S. Primary Mortgage Origination Satisfaction Rankings

Quicken Loans ranks highest in primary mortgage origination satisfaction for a fifth consecutive year, with a score of 835. Quicken Loans performs particularly well in all six factors. Bank of America ranks second with a score of 807, followed by Chase at 805.

 

The 2014 U.S. Primary Mortgage Origination Satisfaction Study is based on responses from 3,893 customers who originated a new mortgage or refinanced within the past 12 months. The study was fielded in July through September 2014.

 

Media Relations Contacts

Jeff Perlman; Brandware Public Relations; Woodland Hills, Calif.; 818-317-3070; [email protected]

Anthony Popiel; Brandware Public Relations; Atlanta, Ga.; 770-649-0880; [email protected]

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

 

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

About McGraw Hill Financial www.mhfi.com 

 

 

Auto Dealers Will Pay a Premium for Good Service from Lenders

2014-07-25

jdp-root

WESTLAKE VILLAGE, Calif.: 28 July 2014 — New-vehicle dealerships place such a value on the relationship they have with their prime retail credit finance providers that two-thirds are willing to pay a premium for good service, according to the JD Power 2014 U.S. Dealer Financing Satisfaction Study^SM released today.

The study examines dealer satisfaction with lenders in four finance segments: prime retail credit; non-prime retail credit[1]; retail leasing; and floor planning. Satisfaction is measured across three factors in the prime and non-prime retail credit segments: 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; sales representative relationship; and vehicle return process. Three factors are measured in the floor planning segment: finance provider credit line offering; floor plan support; and floor plan portfolio management.

The service and relationship dealers have with their finance providers matter enough that 66 percent of dealerships are willing to pay as much as an additional 0.50 to 0.60 basis points on their loan terms to receive good service from their lenders.

“Auto lending is a relationship business, and the key to success for lenders is to provide dealers with the best support and quickest response times possible,” said Michael Buckingham, senior director of the auto finance practice at JD Power. “Dealerships want lenders that focus on building strong relationships and that provide a wide array of financing options for vehicle buyers. These fundamentals hold true for all auto financing products.”

Buckingham noted that dealers financing the three consumer-facing products—prime loan, leasing and non-prime—covet lenders that offer a dedicated credit underwriter and sales representative in order to maintain a level of familiarity, which they believe provides them better and faster service. Even if a credit underwriter team supports a dealership, providing a primary contact for the dealership solidifies the relationship. In the floor planning segment, dealers seek a responsive and knowledgeable servicing team along with a proactive sales team to help them manage their inventory and expense.

KEY FINDINGS

• eContracting—a computer-based system used by captive and non-captive finance companies for the credit application, review and approval process—increases dealer satisfaction. When lenders use eContracting, overall satisfaction averages 892 (on a 1,000-point scale), compared with 858 when lenders do not use that service. Additionally, because of the ease and speed it provides, dealers are more likely to increase their business with lenders that offer eContracting (35%).
• ŸThe study finds that auto dealers in retail leasing keep 62 percent of their prior leasing customers through retention programs and consumer guidance provided by their lender. More than two-thirds (68%) of dealers indicate they increased retail business with their provider because of their floor planning relationship.
• Ÿ In the non-prime credit segment, the competitiveness of vehicle advance is the most important component of provider offerings.

Dealer Financing Satisfaction Rankings

In the floor planning segment, satisfaction is 937, while satisfaction in retail leasing averages 899. Satisfaction in the prime retail credit segment is 866, while non-prime retail credit satisfaction is 827.

Prime Retail Credit

MINI Financial Services ranks highest among lenders in the prime retail credit segment with a score of 968. Following in the rankings are BMW Financial Services (961) and Alphera Financial Services (952).

Retail Leasing

BMW Financial Services ranks highest among lenders in the retail leasing segment for a third consecutive year, with a score of 975. Following in the rankings are MINI Financial Services (970) and Mercedes-Benz Financial (965).

Floor Planning

Mercedes-Benz Financial ranks highest among floor planning lenders for a fourth consecutive year, with a score of 972. Following in the rankings are BMW Financial Services (964) and Hyundai Motor Finance (961).

The 2014 U.S. Dealer Financing Satisfaction Study is based on responses from 3,037 dealers who were surveyed between March and April 2014.

Media Relations Contacts

Syvetril Perryman; Westlake Village, Calif.; 805-418-8103; [email protected]

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

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

About McGraw Hill Financial www.mhfi.com