Dealers ranked Mercedes-Benz Financial Services tops in lender services satisfaction for the second straight year, data from J.D. Power latest U.S. Dealer Financing Satisfaction Study show.
The captive finance arm led 35 auto lenders in all three categories ranked, scoring, on a 1,000-point scale, 961 points in prime retail credit, 982 points in leasing and 986 points in floorplanning.
BMW Financial Services, Alphera Financial Services and Lincoln Automotive Financial Services followed in the prime retail credit category with scores of 936 and above. (See chart below.)
Of the 35 lenders ranked, 19 scored above the industry average of 868. Chrysler Capital finished last in the prime retail credit category, with a score of 798.
J.D. Power’s 2016 study, released on Monday, included more than 20,000 finance provider evaluations by 3,100 new-vehicle dealerships across the country.
Dealer satisfaction is vital to lenders’ business, the study found. When dealers are highly satisfied with lenders, they are more likely to boost the amount of business they send to those lenders the following year. When satisfaction scores are 900 points or higher, 62 percent of dealers said they are likely to increase the amount of business they send to the lender the following year. When satisfaction levels fall to 700-799, however, only 22 percent of dealers said they would increase business with that lender.
Changes in rankings
For the prime retail credit and leasing segments, the study measured satisfaction based on finance provider offerings, application and approval process and sales representative relationship. The retail leasing segment also measured satisfaction based on vehicle return process.
Last year, Mercedes-Benz Financial Services, Mini Financial Services and Alphera Financial Services ranked first, second and third, respectively, in the prime retail credit segment.
This year, BMW Financial Services came in at No. 2, up from No. 4 in 2015, and Mercedes-Benz and Alphera Financial maintained their first and third positions. Mini Financial Services was not ranked this year because of a small sample size. The average satisfaction score in the prime retail credit category was 868.
In last year’s leasing results, Mercedes-Benz Financial, BMW Financial and Lincoln Automotive Financial were the top three. This year, Ford Credit replaced Lincoln Automotive Financial Services to land in the No. 3 spot. Lincoln’s captive was not on this year’s list of 17 leasing companies because of a small sample size. The lease category average was 885.
Contact quality is key
A focus on the lender-dealer relationship enhanced satisfaction scores among some lenders, the study found. Fewer than half of dealers surveyed receive consistent sales rep calls or visits, J.D. Power said. Sales rep calls and visits can increase overall satisfaction by as much as 68 points and 75 points, respectively, on a 1,000-point scale.
Contact frequency is important, but so is the value of the contact, Jim Houston, senior director of the automotive finance practice at J.D. Power, told Automotive News.
“The lenders have spent the last several years responding to dealer feedback. A lot of time was spent on developing processes to meet dealers’ needs,” he said.
Efficient technology is now the standard, and personal relationships have become the differentiator, he said.
When some lenders become more efficient with technology and other processes, they “tend to lose a little bit of the personal touch.”
Dealers appreciate phone calls and visits, especially when the lenders “show up with an agenda that’s value-added at the dealer level,” Houston said.
Based on the study, J.D. Power says lenders can improve dealer relationships with consistent performance among their dealer relationship managers, identification of their best dealers and a prioritization of those relationships and efforts that focus on areas most important to dealers.
Dealers can help improve relationships with lenders, too. Houston suggests they let lenders know which services are the most valuable and how the lender can improve.
Satisfaction scores: Prime retail credit
Here's how the top and bottom auto lenders scored, on a 1,000-point scale, in the prime retail credit category on J.D. Power's 2016 U.S. Dealer Financing Satisfaction Study. The study ranked 35 lenders.
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
Industry average 868
Hyundai Motor Finance 821
GM Financial 815
Credit Union Direct Lending 813
Honda Financial Services 813
Chrysler Capital 798
Note: Mini Financial Services, No .2 in 2015, Acura Financial Services, Fidelity Bank, Santander Auto Finance and four other lenders were included in the 2016 study but not ranked because of small sample size.