Category: Auto Finance|Consumer LendingUnited States

No Longer at Record Levels; However, Canadian Dealer Satisfaction with Lenders Remains High

2014-06-26

jdp-root

TORONTO: 26 June2014 — Although down from the record levels attained in 2013, Canadian automotive dealer satisfaction with finance providers remains high, according to the JD Power 2014 Canadian Dealer Financing Satisfaction Study^SM released today.

The study, now in its 16^th year, examines dealer satisfaction with finance providers in four segments: prime retail credit; retail leasing; floor planning; and sub-prime retail credit.¹

Despite declining satisfaction in two of the four segments, overall satisfaction remains high. In the floor planning segment, satisfaction is 924 (on a 1,000-point scale), a 14-point improvement from 2013, while satisfaction in retail leasing improves by 3 points to 861. Satisfaction in the prime retail credit segment drops 10 points to 873 in 2014, while sub-prime retail credit satisfaction declines by 24 points to 822.

“Indirect lending through captives and banks continues to be the preferred method for consumers seeking affordable loans and leases,” said Mike Buckingham, senior director of the automotive finance practice at JD Power. “The highest performing indirect lenders recognize that it is a relationship-based business model with the dealer community and that focusing on having a dealer-centric staff is a key to success.”

Buckingham noted the sustained levels of satisfaction are in large part due to the fact that auto lenders have remained focused on building strong relationships with dealers and providing a wide array of financing options for vehicle buyers.

Dealer satisfaction in the prime retail credit 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.

Prime Retail Credit Segment Rankings

BMW Financial Services ranks highest in the prime retail credit segment for a second consecutive year, with a score of 954, up 6 points from 2013, and performs particularly well across all factors.

Volkswagen Credit Canada ranks second in the segment with a score of 938, a 30-point improvement from 2013. Mercedes-Benz Financial Services (930) ranks third.

Floor Planning Segment Rankings

Volkswagen Credit Canada ranks highest in the floor planning segment, achieving a score of 971, a significant 42-point improvement from 2013. Volkswagen Credit Canada performs well across all factors in the study. Scotiabank (936) ranks second and Ford Credit Canada (929) third.

While there are no awards presented in the segment, BMW Financial Services, Mercedes-Benz Financial Services and Volkswagen Credit Canada perform particularly well in retail leasing.

KEY FINDINGS

• ŸCredit policy flexibility and predictability, speed of service (underwriting and funding) and relationship with the lender’s sales representatives are critical to dealer financing satisfaction.
• ŸA strength of indirect lending—utilizing the dealer’s finance and insurance (F&I) department to secure financing rather than the vehicle buyer obtaining financing on their own—is the number of options available to customers. Dealers are able to look across a myriad of lenders to find financing most suitable for their customers.
• ŸSatisfaction increases when the lender’s sales representative visits the dealership at least 4 times per year.
• ŸThe study also finds that auto dealers in retail leasing retain 49 percent of their prior leasing customers through retention programs and consumer guidance provided by their lender.
• ŸDealer floor plan inventory satisfaction is enhanced when lenders provide their dealers with robust tools and reports to manage their inventory of vehicles. Dealers also rely on sales representatives to conduct product training and performance reviews, which lead to more efficiency and cost control in dealership operations.
• ŸDealers active in the sub-prime market need more product training and general communications from their lenders, as this product is more niched-based than prime retail.  Similar to prime retail, dealers in sub-prime also seek the same speed of service in underwriting and funding.

The 2014 Canadian Dealer Financing Satisfaction Study is based on responses from more than 1,300 new-vehicle dealerships in Canada. The study was fielded between January and April 2014.

¹  No awards are presented in the retail leasing and sub-prime retail credit segments due to insufficient market representation.

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

About McGraw Hill Financial www.mhfi.com 

# # #

 

 

Relationships Fostered under Preferred Programs Significantly Increase Dealer Satisfaction and the Percentage of Business Sent to Lenders

1970-01-01

jdp-root

WESTLAKE VILLAGE, Calif.: 31 July 2012 — Satisfaction with automotive finance providers is significantly higher among dealers who have a preferred relationship with their lender, which is driven by a higher number of automated approvals, faster funding, more interactions with their sales representative and a perceived increase in the flexibility of the lender’s buying policy, according to the JD Power and Associates 2012 U.S. Dealer Financing Satisfaction Study^SM released today.
 
Preferred relationships are instituted by lenders that want to capture a larger percentage and/or a certain mix of a dealership’s business and are often targeted to the lender’s best dealerships. Preferred dealers who complete a certain volume or mix of their business with their lender are often rewarded under the terms of preferred relationships with rate discounts, better access to special programs and an improved service experience, compared with traditional relationships.

Among preferred dealers, overall satisfaction with their prime retail credit lender is 919 (on a 1,000-point scale), compared with 845 among dealers without a preferred arrangement. The largest gaps in satisfaction scores between preferred and traditional relationships are in the usefulness of dealership visits (9.3 vs. 8.1, on a 10-point scale, respectively), and flexibility of the buying policy attributes (9.1 vs. 7.9, respectively).

“The usefulness of dealership visits and the flexibility of the buying policy are among the most important attributes of the overall relationship, so the gap in scores is extremely significant,” said Lisa Chubliski, client services director of auto finance at JD Power and Associates.

Nearly two-thirds (63%) of dealers in a preferred relationship indicate they receive funding in less than 24 hours vs. 46 percent of dealers in a traditional relationship. There is an even larger difference in the frequency of sales representative visits, with 58 percent of dealers in a preferred relationship receiving sales representative visits 12 times per year vs. 33 percent of dealers in a traditional relationship.

“While not new to the industry, preferred relationships are increasing and are becoming an intriguing alternative to traditional relationships for both parties involved,” said Chlubiski. “Once the preferred relationship is established, dealerships are finding it easier to complete deals, service their customers quickly and optimize the relationship with their lender.”

The study finds that preferred relationships are not exclusive to the captive lenders.  

“While captive lenders, by nature, offer a large percentage of preferred relationships, a notable 56 percent of banks and 30 percent of independents also offer preferred relationships,” said Chlubiski. “While preferred relationships may lead to more business and better service for the dealership, they are not necessarily the right fit for all relationships. The fear of restrictions or the potential of damaging other relationships may push dealerships to remain in traditional relationships with lenders.”  
 
Preferred relationships are designed to have a considerable impact on the percentage of dealership business sent to lenders. Among lenders that account for between 26 percent and 50 percent of a dealer’s total prime business, 79 percent are lenders who are defined as “preferred.” That percentage increases to 90 percent among lenders that account for more than 50 percent of a dealer’s total prime business.

Dealer Financing Satisfaction Findings

The study examines dealer satisfaction with lenders in four finance areas: prime retail credit; sub-prime retail credit¹; retail leasing; and floor planning. Satisfaction is measured across three factors in the prime retail credit and sub-prime retail credit areas: finance provider offering; application/approval process; and sales representative relationship. Four factors are measured in the retail leasing area: finance provider offering; application/approval process; sales representative relationship; and vehicle return process. Three factors are measured in the floor planning area: finance provider credit line offering; floor plan support; and floor plan portfolio management.

Dealer satisfaction with automotive lenders has increased across all areas. Overall dealer satisfaction with prime retail credit lenders averages 885, an increase of 23 index points from 2011. Retail leasing satisfaction is 891, up 14 points from 2011, and floor planning satisfaction is 913, up 10 points.

Prime Retail Credit

BMW Financial Services ranks highest among prime retail credit lenders with a score of 963. Following in the rankings are Alphera Financial Services (959) and Mercedes-Benz Financial Services (948).

Retail Leasing

BMW Financial Services ranks highest among lessors in the retail leasing area with a score of 959. Mercedes-Benz Financial Services follows closely in the rankings with a score of 958. Ford Credit ranks third with a score of 911.

Floor Planning

Mercedes-Benz Financial Services ranks highest among floor planning lenders with a score of 964, followed by BMW Financial Services (960) and Ford Credit (935).

The 2012 U.S. Dealer Financing Satisfaction Study is based on responses from 3,064 dealers who were surveyed between March and April 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:

John Tews; JD Power and Associates; Troy, Mich.; (248) 680-6218; [email protected]
Syvetril Perryman; Westlake Village, Calif.; (805) 418-8103; [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

# # #

[1] No awards were presented in the sub-prime retail credit segment due to insufficient market representation.

 

The Consumer Auto Finance Servicing Experience Significantly Impacts Future Lender Selection, But Has Minimal Impact on Future Dealership Selection

1970-01-01

jdp-root

WESTLAKE VILLAGE, Calif.: 13 December 2012 — There is a strong relationship between an exceptional vehicle loan or lease servicing experience and customer intent to use the same finance provider again, according to the JD Power and Associates 2012 Consumer Financing Satisfaction Study^SM released today.

The study also finds that there is a minimal relationship with the servicing experience and customer intent to use the same dealership for a future vehicle purchase or lease, whereas the in-dealership experience significantly impacts likelihood to return to the same dealer.  

“A superior servicing experience translates into greater lender consideration for future business,” said Lisa Stimac, account director automotive finance at JD Power and Associates.  “While a similar relationship does not exist with respect to considering the same dealership, finance providers may still influence dealer consideration by ensuring efficient approval processes and knowledgeable staff.”   

“Most consumers just want the vehicle-buying process to be simple. Financing is a tough area to simplify, but by providing seamless, fast service throughout the loan or lease period, financing providers increase their chances of being re-selected and building brand loyalty.”

Many of the best practices in auto finance servicing are related to problem prevention. These practices include providing service alerts; reminding customers of a payment or confirming when a payment has been made; providing accurate and informative billing information; and offering alternative, easy-to-use methods for reviewing account information.  

 “Addressing and resolving problems that do occur serve the dual purpose of increasing customer satisfaction and minimizing the number of interactions with the lender, which takes time and resources,” said Stimac. “Of course, when a customer experiences a problem, resolving it quickly and efficiently is critical to recover the lost goodwill from problems in the first place.”

The study measures customer satisfaction in four key factors of the new-vehicle financing experience: billing and payment; interest rate/monthly payment; website; and phone contact. The study is conducted across four consumer vehicle financing segments: mass market loan; mass market lease; luxury loan; and luxury lease.

Consumer Financing Segment Rankings

Mass Market Loan Segment: Volkswagen Credit (865) ranks highest, performing particularly well in billing and payment as well as interest rate/monthly payment, followed by Mazda Capital Services (844) and Honda Financial Services (843).

Mass Market Lease Segment: Ford Credit (827) ranks highest in the segment and performs particularly well in all factors, followed by Volkswagen Credit (816) and Honda Financial Services (802).

Luxury Loan Segment: Mercedes-Benz Financial Services ranks highest with a score of 853 (on a 1,000-point scale) and performs particularly well in phone contact, followed closely by Acura Financial Services with a score of 852. BMW Financial Services ranks third with a score 848.

Luxury Lease Segment: Lincoln Automotive Financial Services ranks highest with a score of 826 and performs particularly well in all factors. Following in the rankings are Lexus Financial Services (808) and Mercedes-Benz Financial Services (806).

The 2012 Consumer Financing Satisfaction Study is based on responses from 11,259 new-vehicle purchasers or lessees who completed a vehicle loan or lease transaction between June 2011 and May 2012. The study was fielded between August and October 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 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 Dow Jones Indices, JD Power and Associates and Platts, a leader in commodities information. 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:

Jeff Perlman; Brandware Public Relations; Woodland Hills, Calif.; (818) 598-1115; [email protected]
Syvetril Perryman; Westlake Village, Calif.; (805) 418-8103; [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
 

# # #

 

Overall Satisfaction with Dealer Financing Increases; Lenders’ Strong Support Continues to Fuel Auto Industry’s Sales Increases

1970-01-01

jdp-root

WESTLAKE VILLAGE, Calif.: 30 July 2013 — Dealer satisfaction has increased in all finance provider areas for the second consecutive year, with product offering contributing to increases in satisfaction, according to the JD Power 2013 U.S. Dealer Financing Satisfaction Study^SM released today.

The study examines dealer satisfaction with lenders in four finance areas: prime retail credit; sub-prime retail credit¹; retail leasing; and floor planning. Satisfaction is measured across three factors in the prime and sub-prime retail credit areas: finance provider offering; application/approval process; and sales representative relationship. Four factors are measured in the retail leasing area: finance provider offering; application/approval process; sales representative relationship; and vehicle return process. Three factors are measured in the floor planning area: finance provider credit line offering; floor plan support; and floor plan portfolio management.

Overall dealer satisfaction with prime retail credit lenders is 890 on a 1,000-point scale, an increase of 5 points from 2012, and retail leasing satisfaction is 896, up 5 points from 2012. Floor planning satisfaction has increased the most among the three award-eligible lending areas—an increase of 11 points from 2012 to 924 in 2013.

Increasing industry adoption rates of such process innovations as eContracting combined with improvements to dealer support and a solid product offering have contributed to satisfaction increases. The study finds that 30 percent of lenders offer dealers such options with 39 percent of dealers that are using these options indicating they will give more business to their eContracting lender.  

“In addition to more improved services, competition and new entrants into the market provide dealers with more choices and product innovations,” said Michael Buckingham, senior director of the auto finance practice at JD Power. “This combination also creates a highly competitive marketplace for dealers to select their finance provider and increase vehicle sales.”  

Although satisfaction in the auto financing industry is improving, the study finds the following three best practices separate the lenders with average satisfaction scores from those with high scores: 

• Sales representative excellence: To dealers, the sales representative is the most important touch point with a lender. Sales reps must have the knowledge and tools to teach and train dealers on the various finance product offerings.
• Organizational speed and efficiency: Building processes and an infrastructure that provide fast underwriting for all retail products, as well as fast funding of retail products and floor planning, is mission critical. 
• Service excellence: Dealers support lenders that have personnel who are knowledgeable, friendly and customer focused.

“Indirect auto finance lending is a relationship business between dealer and lender,” said Buckingham. “A customer-focused staff is a cornerstone for success.”

DEALER FINANCING SATISFACTION RANKINGS

Prime Retail Credit

Alphera Financial Services ranks highest among prime retail credit lenders, with a score of 970. Following in the rankings are BMW Financial Services (965) and Mercedes-Benz Financial Services (953).

Retail Leasing

BMW Financial Services ranks highest among lenders in the retail leasing area for a second consecutive year, with a score of 958. Following in the rankings are Mercedes-Benz Financial Services (954) and Ford Credit (929).

Floor Planning

Mercedes-Benz Financial Services ranks highest among floor planning lenders for a third consecutive year, with a score of 971. Following in the rankings are BMW Financial Services (966) and Ford Credit (948). 

The 2013 U.S. Dealer Financing Satisfaction Study is based on responses from 3,962 dealers who were surveyed between March and April 2013.

^[1] Sub-prime retail credit is included in the study, but is not eligible for an award.

About JD Power

JD Power is a global marketing information services company providing 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. Headquartered in Westlake Village, Calif., JD Power has offices in North America, Europe and Asia Pacific. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. JD Power is a business unit of McGraw-Hill Financial.

About McGraw Hill Financial

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

Media Relations Contacts

John Tews; Troy, Mich.; (248) 680-6218; [email protected]
Syvetril Perryman; Westlake Village, Calif.; (805) 418-8103; [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. www.jdpower.com
 

# # #

 

 

Automotive Customer Financing Satisfaction Is Driven by Servicing Experience and Onboarding Process Excellence

1970-01-01

jdp-root

WESTLAKE VILLAGE, Calif.: 25 November 2013 — Lenders that provide excellence in the servicing and onboarding experiences from the beginning of the loan or lease process set the stage for customer satisfaction throughout the financing duration, according to the JD Power 2013 U.S. Consumer Financing Satisfaction Study^SM released today. 

 

The study measures customer satisfaction in three key factors of the new-vehicle financing experience: billing and payment process; website; and phone contact. The study is conducted across two types of vehicle segments: luxury and mass market.

 

“When you consider that most consumers finance indirectly with a lender and the only face-to-face contact a lender may have with a customer is at the point of the vehicle purchase or lease with the finance manager at the dealership, first impressions really matter,” said Mike Buckingham, senior director of the automotive finance practice at JD Power. “It’s extremely important for lenders to get the servicing experience right from the start by providing a superior welcome letter and first billing statement that are rich with information to begin the onboarding process. This provides a solid foundation for continued customer satisfaction.”

KEY FINDINGS

• While dealer recommendations remain the most critical driver of lender choice (48% luxury and 50% mass market), nearly one-fourth (24%) of luxury customers and nearly to one-third (32%) of mass market customers consider multiple lenders before selecting their finance provider. 
• Overall satisfaction is higher for captive lenders than for non-captive lenders. Luxury segment captive lenders score 851 (on a 1,000-point scale), compared with 793 for non-captive lenders. Mass Market segment captive lenders score 836, compared with 805 for non-captive lenders. 
• Satisfaction is higher when lenders provide onboarding information that customers completely understand, compared to when they do not provide clear information (+131 points in the luxury segment and +115 points in the mass market segment). Providing tools for customers to self-manage their account, particularly setting up auto-payments, increases satisfaction more than 150 points in the luxury and mass market segments (+157 points and +152 points, respectively). 
• There is a relationship between higher levels of overall satisfaction and future intent, with 95 percent of highly satisfied automotive financing customers (overall satisfaction scores of 800 and above), indicating they are likely to choose their lender again. 
• Overall satisfaction among automotive financing customers in the luxury segment is 835, compared with 820 among those in the mass market segment.

Rankings:

 

Luxury Segment

Lincoln Automotive Financial Services ranks highest with a score of 875 and performs well in all factors,   followed by BMW Financial Services with 872 and Lexus Financial Services with 860. 

Mass Market Segment

Kia Motors Finance ranks highest with a score of 851 and performs well in billing and payment process and website, followed closely by Volkswagen Credit with 849 and Hyundai Motor Finance with 848.

 

The 2013 U.S. Consumer Financing Satisfaction Study is based on responses from 12,741 new-vehicle purchasers or lessees who completed a vehicle loan or lease. The study includes new vehicles financed in model years 2012 and 2013. The study was fielded between September and October 2013.