J.D. Power Says Dealer Satisfaction with Lenders Down Considerably
WESTLAKE VILLAGE, Calif. — J.D. Power and Associates discovered that dealer satisfaction with lenders declined "considerably" from 2008 in all four segments reviewed in the Dealer Financing Satisfaction Study.
The company found:
Prime Retail Credit
2008: 835
2009: 789 (down 46 points)
Subprime Retail Credit
2008: 793
2009: 717 (down 76 points)
Retail Leasing
2008: 853
2009: 774 (down 79 points)
Floor Planning
2008: 892
2009: 802 (down 90 points)
Officials explained that the service aspects of the retail financing experience account for more than two-thirds of dealer satisfaction. Meanwhile, offerings such as rates account for less than one-third of overall satisfaction.
While recognizing that the past year has been tough for dealers, J.D. Power executives advised, "This indicates an opportunity for lenders to differentiate themselves through service, even though external market forces are driving a more conservative lending approach."
More specifically, David Lo, director of financial services as J.D. Power, explained, "Current economic conditions have created something of a ‘perfect storm' as declines in new-vehicle sales, tightened lending and reduced inventory funds have combined to put extreme stress on dealer business."
"However, the fundamental principles of service are unchanged. Lenders that focus on prompt application and funding turnaround times, have credit buyers that demonstrate willingness to worth with their clients and have sales representatives who are skilled in relationship management may position themselves to be a lender of choice," he continued.
Basically, the study discovered that higher levels of satisfaction may positively impact the amount of a business a lender receives from a dealer.
For instance, for the lenders in the prime retail segment whose satisfaction scores averaged 712 on a 1,000-point scale, 22 percent of dealers say they "definitely will" increase their business with this organization.
However, of the lenders whose satisfaction scores averaged 886, 46 percent of dealers said they "definitely will" increase business with that lender.
Lo noted, "High-performing lenders tend to close a higher proportion of deals. This is critical right now, and almost more importantly, may serve as a foundation for growth one the market stabilizes."
Prime Retail Credit
Taking the top spot in the prime retail credit segment was Mercedes-Benz Financial with an index score of 918. Officials said this company performed particularly well in two areas, provider offerings and credit personnel. Alphera Financial Services at 910 and BMW Financial Services at 898 followed in the rankings.
The prime retail credit company averages are as follows:
Mercedes-Benz Financial: 918
Alphera Financial Services: 910
BMW Financial Services: 898
Toyota Financial Services: 873
Volkswagen Credit: 867
Audi Financial Services: 838
Honda Financial Services: 831
Union Bank and Trust: 817
Wachovia Dealer Services: 814
Branch Banking and Trust: 803
Ford Credit: 802
Citizens Banks: 792
SunTrust bank: 789
Prime Retail Credit Segment Average: 789
Bank of America: 787
Harris Bank: 781
Fifth Third Bank: 775
Chase Auto Finance: 772
Nissan Motor Acceptance: 763
US Bank: 744
Hyundai Motor Finance: 739
Capital One Auto Finance: 732
GMAC: 711
Chrysler Financial: 665
Subprime Retail Credit
Interestingly enough, J.D. Power said that no awards were presented in the subprime retail credit segment due to insufficient market representation.
Retail Leasing
For the sixth year in a row, BMW Financial Services grabbed the highest ranking in retail leasing satisfaction with a score of 909. J.D. Power pointed out that this company performed particularly well in the categories of credit personnel, application/approval process and termination policy/service.
Mercedes-Benz Financial followed closely with a score of 908. Toyota Financial Services took home the third ranking with a score of 872.
Retail leasing results:
BMW Financial Services: 909
Mercedes-Benz Financial: 908
Toyota Financial Services: 872
Audi Financial Services: 863
Volkswagen Credit: 862
Honda Financial Services: 857
Ford Credit: 782
Retail Leasing Segment Average: 774
Nissan Motor Acceptance: 755
Chase Auto Finance: 746
Hyundai Motor Finance: 723
US Bank: 714
GMAC: 600
(Included in the study but not ranked due to small sample size were Chrysler Financial and Subaru Motor Finance)
Floor Planning
In addition to capturing the top score in the prime retail credit segment, Mercedes-Benz Financial also ranked highest in floor planning with a score of 926. Next in line was BMW Financial Services at 921 and then Volkswagen Credit at 896.
Floor-planning results:
Mercedes-Benz Financial: 926
BMW Financial Services: 921
Volkswagen Credit: 896
Toyota Financial Services: 872
Chase Auto Finance: 865
Ford Credit: 819
Floor Planning Segment Average: 802
GMAC: 707
Chrysler Financial 678
(Included in the study but not ranked due to small sample size were Bank of America and Nissan Motor Acceptance).
The study examined five key factors to contribute to satisfaction within the prime retail credit, subprime retail credit and retail leasing segments: provider offerings, credit personnel, application/approval process, termination policy/service and sales representative relationship. Three factors were measured in the floor-planning segment: provider offering; floor-plan support personnel and process/service.
The study was based on responses from more than 2,000 dealer principals who were surveyed between April and May of this year.