TROY, Mich. -

When it comes to digital financing through dealerships and finance companies, the genie is out of the bottle. The toothpaste is out of the tube. Pick whatever analogy you want to use, as J.D. Power put it: customers “won’t go back to the old way of doing things.”

According to the J.D. Power 2020 U.S. Consumer Financing Satisfaction Study, more vehicle buyers than ever have turned to digital channels when it comes to pre-transaction research and lining up financing options for a vehicle.

Study orchestrators explained that meeting with the dealership’s finance department — the one in which vehicle buyers are presented with the dealer’s recommended financing options and offered add-ons — is evolving to more of a digital experience and is being dictated by consumer demand.

J.D. Power also discovered a growing percentage are securing direct financing prior to their purchase. While some of this behavior has been driven by the COVID-19 pandemic, an increasing number of buyers say they prefer a digital origination process for their next vehicle purchase.

“The pandemic accelerated a trend toward digital auto loan origination that has been developing for some time,” said Patrick Roosenberg, director of automotive finance intelligence at J.D. Power.

“Many buyers who have secured financing digitally had a great experience and won’t go back to the old way of doing things — even when COVID-19 is no longer a factor,” Roosenberg continued in a news release.

“To improve satisfaction and lower the cost to serve during these changing times and beyond, providers need to build a robust digital platform that addresses borrower needs, from research and origination through account management and billing.”

Four other key findings from the 2020 study include:

• More consumers complete digital credit applications, and like it: Nearly one-third (32%) of auto loan borrowers completed a digital credit application, with 22% using the finance company’s website and 10% using a mobile app.

J.D. Power indicated the frequency of digital applications has increased 8 percentage points from last year. The average customer satisfaction score for those applying for an auto loan digitally is 887 (on a 1,000-point scale), while the average customer satisfaction score for those applying at a dealership is 842.

• A trend that signals staying power beyond the pandemic: A total of 40% of borrowers say they prefer at least part of the financing origination process to be digital when they purchase their next vehicle.

The number of borrowers who say they will apply for financing digitally (via website or mobile app) in the future is up 3 percentage points from 2019, while the number of consumers who say they will secure financing through the dealership is down 4 percentage points year-over-year.

• Direct financing gains traction, led by luxury segment: While 85% of auto-finance customers still secure their financing through the dealership, more borrowers than ever are pursuing direct financing.

J.D. Power indicated a total of 15% of participants in this year’s study secured direct financing, up 3 percentage points from a year ago. In the luxury segment, that number is up 3 percentage points to 26% of all eventual contract holders.

• Digital account management and bill pay improves customer satisfaction: A growing number of borrowers also are turning to digital channels for loan account management and bill pay.

During the past two years, J.D. Power use of finance company mobile apps for account management has increased 8 percentage points and use of the website has increased 2 percentage points, while offline account management has declined three percentage points.

The study also showed customers have the highest levels of overall satisfaction (884) when using finance company’s mobile app.

Finance company rankings

Lincoln Automotive Financial Services ranked highest in customer satisfaction among luxury brands with a score of 899.

Capital One Auto Finance (885) came in second and BMW Financial Services (881) finished third.

BB&T now Truist ranked highest among mass market brands with a score of 879. Capital One Auto Finance (870) and Ford Credit (870) finished in a tie for second place.

The J.D. Power U.S. Consumer Financing Satisfaction Study measures overall customer satisfaction in five factors, including:

— Billing and payment process
— Mobile app experience
— Onboarding process
— Origination process
— Website experience

The study was fielded in July and August and is based on responses from 10,103 customers who financed a new or used vehicle through an installment contract or lease within the past three years.

Luxury Rankings

Lincoln Automotive Financial Services: 899
Capital One Auto Finance: 885
BMW Financial Services: 881
Infiniti Financial Services: 876
Lexus Financial Services: 876
Audi Financial Services: 875
Bank of America: 866
Wells Fargo Auto: 866
Segment Average: 886
Mercedes-Benz Financial Services: 862
Chase Automotive Finance: 850
Acura Financial Services: 849
General Motors Financial: 849

Mass Market Rankings

BB&T now Truist: 879
Capital One Auto Finance: 870
Ford Credit: 870
Honda Financial Services: 866
Bank of America: 860
General Motors Financial: 859
Chase Automotive Finance: 857
Southeast Toyota Finance: 855
Ally Financial: 853
Segment Average: 850
NMAC: 847
Toyota Financial Services: 845
Hyundai Motor Finance: 842
Wells Fargo Auto: 839
TD Auto Finance: 836
Chrysler Capital: 834
Kia Motor Finance: 833
U.S. Bank: 832
Volkswagen Credit: 831
PNC Bank: 823
Huntington National Bank: 822
Fifth Third Bank: 811
Citizens One Auto Finance: 805
Santander Auto Finance: 801