In a recent study, J.D. Power found lender relationships to be the most important factor in auto dealer satisfaction, as opposed to the more commonly-held belief that it would be interest rates. Dealerships can use the insights from the study to learn more about the main drivers of satisfaction between lenders and dealers.
The Keys to Dealer Satisfaction with Lenders
The J.D. Power 2019 U.S. Dealer Financing Satisfaction Study measured car dealership satisfaction with different types of lenders: captive mass market, non-captive, and floor planning. It’s based on 16,780 retail credit evaluations and 2,117 floor plan provider evaluations from dealer personnel.
As the digital age progresses, the automotive industry is changing as more consumers look to secure financing online before even thinking about visiting a dealership. For this reason, dealers’ relationships with their lenders is becoming a very important factor that leads to success and smooth sailing for a finance department.
J.D. Power identified three main keys dealerships need to look for in their lending partners and their credit and sales personnel:
- The ability to answer dealer questions correctly the first time.
- The ability to facilitate electronic transactions.
- The ability to resolve contracts quickly.
Dealerships need to think about their own finance departments and the lenders they’re signed up with. Is everyone delivering on these core areas? How about even two of the three? If not, it might be time for everyone involved to up their game.
“Dealers are able to put together more attractive, seamless transactions for their customers when they are able to work in lock-step with lenders they trust to deliver fast, accurate, and competitive products,” said Jim Houston, J.D. Power’s Senior Director of Automotive Finance Intelligence.
The study also ranked captive mass market, non-captive, and floor planning segments of lenders on J.D. Power’s 1,000-point scale. These lenders were evaluated based on factors like relationships, offerings, portfolio management, and the application and approval process.
These are the customer satisfaction index rankings according to the study:
Captive Mass Market Segment:
- Volkswagen Credit: 961
- Subaru Motors Finance: 940
- Mazda Capital Services: 921
- Toyota Financial Services: 908
- NMAC: 890
- Citizens One Auto Finance: 935
- TD Auto Finance: 927
- Ally Financial: 899
- Huntington National Bank: 884
- Security Service Federal CU: 877
Floor Plan Segment
- Audi Financial Services: 993
- Volkswagen Credit: 993
- TD Auto Finance: 983
- Huntington National Bank: 971
- Ally Financial: 961
On average, mass market captive lenders outranked non-captive lenders 871 to 840.
Subprime Lenders in the Study
The bottom six non-captive lenders in the study all happened to be subprime companies: Credit Acceptance Corporation (745), Santander Auto Finance (745), AmeriCredit (730), Regional Acceptance Corp. (721), Exeter Finance Corp. (706), and Consumer Portfolio Services (681).
Curt Powell, the Senior Vice President of Sales at Consumer Portfolio Services, didn’t think including them in the same category as prime lenders was fair.
“The bottom six lenders are all subprime companies,” Powell told Auto Finance News. “Comparing the dealer experience and process for prime and subprime lenders doesn’t make sense to me – it’s apples and oranges and the survey results show that exact outcome.”
Excelling in the Subprime Space
As the J.D. Power study highlights, dealerships need strong relationships with their lending partners in order to maximize opportunity. If you’re looking for more satisfactory lending partners, your store should consider the findings and rankings from the study.
At the same time, the difference between subprime lenders and the rest of the non-captive lenders ranked in the study is the perfect indicator of just how much extra focus is required with subprime deals. If your store wants to step it up in the subprime space, Auto Credit Express wants to help.
We help dealers thrive with our award-winning subprime auto leads, new and used car leads, and other special finance products and services. From out list of subprime auto lenders to our BDC call center to our direct mail services, we want to be the special finance authority for your store.
Call our team today at 888-535-2277 to learn more about how we can partner up, or fill out our online contact form and we’ll get back to you!