Dealer Satisfaction with Auto Lenders Helps Boost Financing: Survey
For the second consecutive year, car dealerships are reporting an increase in financing satisfaction thanks to strong support from auto lenders.
According to the J.D. Power 2013 U.S. Dealer Financing Satisfaction Study, overall dealer satisfaction with prime retail credit lenders was 890 on a 1,000-point scale, an increase of five points from 2012, while retail leasing satisfaction was 896, up five points from last year’s figure.
The study, which was based on responses from 3,962 dealers surveyed between March and April 2013, examined dealer satisfaction with lenders in four finance areas: prime retail credit, sub-prime retail credit, retail leasing and floor planning.
Satisfaction was measured across three factors in the prime and sub-prime retail credit areas of finance provider offering, application/approval process and sales representative relationship.
Four factors were also measured in the retail leasing area of finance provider offering, application/approval process, sales representative relationship and vehicle return process.
Three factors were measured in the floor planning area of finance provider credit line offering, floor plan support and floor plan portfolio management.
Based on dealer responses, floor planning satisfaction increased 11 points in 2012 to 924 in 2013.
“In addition to more improved services, competition and new entrants into the market provide dealers with more choices and product innovations,” said Michael Buckingham, senior director of the auto finance practice at J.D Power. “This combination also creates a highly competitive marketplace for dealers to select their finance provider and increase vehicle sales.”
J.D. Power said although satisfaction in the auto financing industry is improving, the study found the following three best practices separated the lenders with average satisfaction scores from those with high scores:
- Sales representative excellence: To dealers, the sales representative is the most important touch point with a lender. Sales reps must have the knowledge and tools to teach and train dealers on the various finance product offerings.
- Organizational speed and efficiency: Building processes and an infrastructure that provide fast underwriting for all retail products, as well as fast funding of retail products and floor planning, is mission critical.
- Service excellence: Dealers support lenders that have personnel who are knowledgeable, friendly and customer focused.
“Indirect auto finance lending is a relationship business between dealer and lender,” said Buckingham. “A customer-focused staff is a cornerstone for success.”