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Dealer Satisfaction with Automotive Financing Increasing

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author photo by Holly Reich July 2011

The 2011 U.S. Dealer Financing Satisfaction Study finds that dealer satisfaction with automotive lenders has increased from 2010 in the areas of prime retail credit, retail leasing and floor planning.

Within the prime retail credit segment, several banks-including Ally Financial, Bank of America, Citizens Auto Finance and SunTrust Bank-have improved at a considerably higher rate than industry average. Dealerships cite several reasons for their high satisfaction with these non-captive lenders, including ease of doing business, quick decisions and flexibility of programs and purchasing.

"The ongoing recovery of the automotive industry will continue to bring shifts in the lenders operating in this space, intensifying competition as lenders vie for new business," said Paul A. Cuevas, Director of Automotive Finance at J.D. Power and Associates. "Lenders that provide a satisfying experience for dealers-whether captive or non-captive-are likely to benefit from a greater share of dealer business."

According to the study, 56 percent of dealers would pay a higher buy rate to send business to a lender that provides them with a more pleasing experience.

"Conventional wisdom says that a 'show me the money' attitude among dealers causes them to focus primarily on the best rate when selecting a lender," said Cuevas. "However, our study clearly shows that lenders can get more loan volume and better pricing by differentiating themselves through more seamless processes and better relationships with their dealers. As a result, better-performing lenders have the opportunity to enjoy higher levels of revenue growth and profitability as the health of the market continues to improve."

The study cites key areas where lenders can take action to raise dealer satisfaction. Those include streamlining the approval and funding process to be as efficient as possible; providing consistent contacts and messaging; and communicating with dealers through the web, email, phone or one-on-one visits.

The analysis examined dealer satisfaction with finance lenders in four segments: prime retail credit, subprime retail credit, retail leasing and floor planning.

In the Prime Retail Credit segment, BMW Financial Services and Mercedes-Benz Financial Services each rank highest, in a tie (959 each). BMW Financial Services performs particularly well in the application/approval process factor, while Mercedes-Benz Financial Services does so in the provider-offering factor. Following in the rankings is Ford Credit (920). Ally Financial improves more than any other lender in the segment in 2011, increasing by 113 points over 2010.

In Retail Leasing, Mercedes-Benz Financial Services ranks highest in the segment with a score of 960 and performs particularly well in the sales representative relationship factor. BMW Financial Services follows closely in the rankings with a score of 957. Ford Credit ranks third with a score of 914. Ally Financial improves more than any other lender in the retail-leasing segment in 2011, increasing by 104 points from 2010.

In the Floor Planning segment, Mercedes-Benz Financial Services ranks highest with a score of 970, followed by BMW Financial Services (966) and Toyota Financial Services (943).

The 2011 U.S. Dealer Financing Satisfaction Study is based on responses from 2,763 dealer principals who were surveyed between March and April 2011.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Dealer Satisfaction with Automotive Financing Increasing - Autotrader