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Dealer Relationships Critical For Lenders in Competitive Market, J.D. Power Study Says

Mercedes-Benz Financial Services Ranks Highest in Prime Retail Credit, Retail Leasing and Floor Planning

J.D. Power corporate logo.

News provided by

J.D. Power

Aug 15, 2016, 08:00 ET

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DETROIT, Aug. 15, 2016 /PRNewswire/ -- The relationships auto finance providers develop with dealerships are critical to dealer satisfaction and to remaining competitive in the market, especially as the new-vehicle sales market tightens, according to the J.D. Power 2016 U.S. Dealer Financing Satisfaction Study,SM released today.

A combination of slowing new-vehicle sales and an uncertain used-car market is contributing to an already contested auto-lending environment. Technology has eliminated disparity of speed in financing, leaving lenders to differentiate themselves by the relationship they are able to form with the dealership.

"Speed has been king and the area lenders have traditionally focused on, but as the market gets tougher, lenders need to center their attention on their relationships with dealers, or they are going to lose business," said Jim Houston, senior director of the automotive finance practice at J.D. Power. "Lenders need to move beyond a transactional relationship with dealers to a richer consultative partnership. Lenders with a dealer-centric culture across their organization—not just in various pockets of the business—are the ones that are most likely to excel."

Houston noted that in building a dealer-centric culture, lenders must understand their dealers' businesses and goals, which helps establish them in the eyes of dealers as their business partner and problem solver. That starts with communication with the dealer. The study finds that fewer than half of dealers receive consistent sales rep calls or visits, both of which can boost overall satisfaction by as much as 68 points and 75 points, respectively, on a 1,000-point scale.  But it's more than just the frequency of the contact, it's the nature of those touch points that adds value to the relationship.

"Dealers value a lender that can help them handle the tough issues and solve those 'outside-the-box' situations," said Houston. "This is where having the right people focused on their dealers and helping them execute their strategic plan is essential." 

Opportunities to Excel and Grow Business
The study identifies three areas of opportunity for lenders that will help them enhance their dealer relationships: 1) Consistent performance among their dealer relationship managers; 2) Identification of their best dealers and a prioritization of those relationships; and 3) Efforts that focus on areas most important to dealers.  

"These are the things dealers say they want from their lenders, but are not necessarily getting on a consistent basis," said Houston. "When the market gets tough, lenders that meet dealer expectations are going to get a greater share of the business."

Findings of the study show that high satisfaction with lenders leads dealers to increase the amount business they send to those respective lenders over the next year. Falloff is swift when satisfaction declines: When satisfaction scores are 900 points or higher, 62% of dealers say they are likely to increase the amount of business they send to the lender over the next year. When satisfaction falls to between 800 and 889, only 37% of dealers indicate they intend to send more business to that lender. When satisfaction dips to 700-799, only 22% of dealers intend to increase business with that lender.

Other key findings of the study include:

  • Speed Still Matters: Speed still plays a significant role when dealers are choosing lending partners.  When lenders fund error-free contracts on the same day as they are submitted, dealer satisfaction increases by as much as 64 points. When lenders notify dealers of contract issues or errors within four hours after they are submitted, satisfaction increases by as much as 60 points. 
  • Exceptions to the Rule: Dealers want their lending partners to value the total relationship. In some cases, this means providing exceptions when warranted. A well-managed exception process can increase overall satisfaction by up to 79 points.

Dealer Financing Satisfaction Rankings
Prime Retail Credit
Mercedes-Benz Financial Services ranks highest among lenders in the prime retail credit segment for a second consecutive year, with a score of 961. Following in the rankings are BMW Financial Services (959); Alphera Financial Services (941); Lincoln Automotive Financial Services (936); and Infiniti Financial Services (930).

Retail Leasing
Mercedes-Benz Financial Services ranks highest among lenders in the retail leasing segment for a second consecutive year, with a score of 982. Following in the rankings are BMW Financial Services (958); Ford Credit (913); Volvo Car Financial Services (912); and Subaru Motors Finance (911).

Floor Planning
Mercedes-Benz Financial Services ranks highest among floor planning lenders for a sixth consecutive year, with a score of 986. Following in the rankings are BMW Financial Services (975); Huntington National Bank (969); Hyundai Motor Finance (945); and Kia Motors Finance (945).  

Satisfaction is measured across three factors in the prime and non-prime retail credit segments: finance provider offerings; application and approval process; and sales representative relationship. Four factors are measured in the retail leasing segment: finance provider offerings; application and approval process; sales representative relationship; and vehicle return process. Four factors are measured in the floor planning segment: finance provider credit line; floor plan support; sales representative relationship; and floor plan portfolio management.

The 2016 U.S. Dealer Financing Satisfaction Study captures more than 20,000 finance provider evaluations across the four segments. These evaluations were provided by 3,100 new -vehicle dealerships in the United States.

Prime Retail Credit
Overall Customer Satisfaction Index Scores
(Based on a 1,000-point scale)

Mercedes-Benz Financial Services

961

BMW Financial Services

959

Alphera Financial Services

941

Lincoln Automotive Financial Services

936

Infiniti Financial Services

930

Subaru Motors Finance

908

Jaguar Financial Group

902

Chase Automotive Finance

895

Land Rover Financial Group

891

Huntington National Bank

890

Volvo Car Financial Services

890

Ford Credit

888

NMAC

884

BB&T

881

Citizens One

875

TD Auto Finance

874

Ally Financial

873

Mazda Capital Services

873

Volkswagen Credit

873

Industry Average

868

Capital One Auto Finance

867

Fifth Third Bank

867

Bank of America

866

SunTrust Bank

864

Toyota Financial Services

860

Kia Motors Finance

859

Wells Fargo Dealer Services

853

PNC Bank

851

BMO Harris Bank

844

US Bank

835

Bank of The West

822

Hyundai Motor Finance

821

GM Financial

815

Credit Union Direct Lending

813

Honda Financial Services

813

Chrysler Capital

798

Note: Included in the study but not ranked due to small sample size are Acura Financial Services; Alaska USA Federal Credit Union; Fidelity Bank; First Niagara Bank; Gateway One Lending & Finance; MINI Financial Services; Santander Auto Finance; and Security Service Federal CU.

Retail Leasing
Overall Customer Satisfaction Index Scores
(Based on a 1,000-point scale)

Mercedes-Benz Financial Services

982

BMW Financial Services

958

Ford Credit

913

Volvo Car Financial Services

912

Subaru Motors Finance

911

Land Rover Financial Group

891

NMAC

891

Jaguar Financial Group

890

Mazda Capital Services

886

Industry Average

885

Toyota Financial Services

869

Kia Motors Finance

868

Honda Financial Services

866

US Bank

863

Ally Financial

851

GM Financial

843

Hyundai Motor Finance

835

Chrysler Capital

828

Note: Included in the study but not ranked due to small sample size are Infiniti Financial Services; Lincoln Automotive Financial Services; MINI Financial Services; and Volkswagen Credit.

Floor Planning
Overall Customer Satisfaction Index Scores
(Based on a 1,000-point scale)

Mercedes-Benz Financial Services

986

BMW Financial Services

975

Huntington National Bank

969

Hyundai Motor Finance

945

Kia Motors Finance

945

Ford Credit

944

Chase Automotive Finance

941

Industry Average

938

Ally Financial

935

NMAC

931

Bank of America

927

GM Financial

926

Toyota Financial Services

899

Chrysler Capital

897

Note: Included in the study but not ranked due to small sample size are PNC Bank; Volkswagen Credit; and Wells Fargo Dealer Services.

For more information about the U.S. Dealer Financing Satisfaction Study, visit http://www.jdpower.com/resource/us-dealer-financing-satisfaction-study. 

See the online press release at http://www.jdpower.com/pr-id/2016149.

Media Relations Contacts
John Tews; Troy, Mich.; 248-680-6218; [email protected]
Geno Effler; Costa Mesa, Calif.; 714-621-6224; [email protected]

About J.D. Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info

Logo - http://photos.prnewswire.com/prnh/20130605/LA26502LOGO

SOURCE J.D. Power

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