TROY, Mich. -

Much effort is put into the analysis of finance-company performance when handling business from the consumer side. J.D. Power decided to examine how finance companies are faring with another vital customer segment — dealerships.

The firm on Thursday revealed its first U.S. Automotive Commercial Lending Satisfaction Study that pointed out most dealers rely on commercial providers to keep their lots full. When those finance companies get the dealer satisfaction formula right, they stand to attract even more business from dealers, according to the J.D. Power.

The study showed the difference between good and great dealer-finance company relationships comes down to four key steps that can set the stage for expanded business relationships.

The inaugural study evaluated dealer satisfaction with floor planning and other commercial lending services and identified the key service attributes that drive increased customer satisfaction and loan portfolio growth.

“The most common reason auto dealers select their lending partners for loans — such as real estate and construction — and lines of credit is because of a strong relationship a dealer already has with a lender on floorplan,” said Jim Houston, managing director of consumer lending and auto finance intelligence at J.D. Power.

“The study shows the tried-and-true path to building that relationship is by consistently delivering on a core set of performance metrics rooted in making it easier for dealers to sell vehicles,” Houston continued in a news release

Some other key findings of the 2021 study included:

—Dealer satisfaction with commercial lenders builds from a strong foundation: Overall dealer satisfaction with inventory financing providers is very high (9.69 on a 10-point scale), but there are some clear steps finance companies can take to improve even further.

—Four-step path to a perfect relationship: J.D. Power indicated the keys drivers of superior dealer/finance company relationships are all rooted in the principle of making dealers’ lives easier. Key performance metrics associated with the biggest jumps in customer satisfaction are: always being reachable when needed; making it easy to submit required documents; providing seamless credit line increases; and providing a clear, achievable path to meeting reward program requirements.

When dealers experience all four of these best practices, overall satisfaction jumps to a near-perfect 9.96, according to the study.

—Room to improve: Currently, despite overall strong scores, just 8% of dealers told J.D. Power that they experience all four performance metrics.

—Good floor plan relationship drives expanded business for finance companies: Nearly three-fourths (70%) of dealers select a credit facilities partner based on an existing inventory finance lending relationship.

The U.S. Automotive Commercial Lending Satisfaction Study was based on 1,727 evaluations by dealer finance professionals across both the inventory finance and lending segments. It was fielded in October and November.

For more information about the U.S. Automotive Commercial Lending Satisfaction Study, visit this website.