Auto lenders need service to shine

Automotive finance providers need to focus their efforts on servicing processes, anticipating the changing needs as well as the diversity of their customers to achieve high levels of satisfaction, according to research by consultancy J.D. Power.

The J.D. Power 2015 US. Consumer Financing Satisfaction Study examined the overall customer experience with financing either via an automotive loan or lease.

The report measures satisfaction among customers who financed or leased their vehicle indirectly through a dealer or directly through an auto finance provider in four key factors: on-boarding process; billing and payment process; website; and phone contact. The study is conducted in two vehicle segments, luxury and mass market, and satisfaction is calculated on a 1,000-point scale.

“The higher-performing companies do a good job of satisfying their customers throughout the life of the loan or lease,” said Mike Buckingham, senior director of the automotive finance practice at J.D. Power. “Once the new-car smell goes away, it’s the day-to-day handling of the account that is critical, and that’s where some companies fall.”

Buckingham noted that most of the providers do a good job in the initial on-boarding and loan/lease setup, but as consumers experience changes in their life or have informational needs, getting quick support from their provider is critical in order to maintain high levels of satisfaction.

“The higher-performing brands are adept at satisfying a diverse consumer base that has different needs based on both age and product type,” said Buckingham.

Satisfaction levels

The study found that the overall satisfaction level in the luxury car segment stood at 840, compared to 817 in the mass market segment.

The loan and lease experience differs by segment, with overall satisfaction in the luxury segment similar for loans and leases (840 and 839, respectively). In contrast, satisfaction in the mass market segment is significantly higher for loans than for leases (821 and 798, respectively).

Ensuring customer satisfaction is critical for finance providers, the study found, as more than 96% of highly satisfied customers (overall satisfaction scores of 900 points or more) say they “definitely will” use their current lender in the future.

As consumers make greater use of online searches and social media reviews, the research found that nearly 40% of customers indicate they selected their provider based on inputs other than dealer recommendations.

J. D. Power’s research ranks Lincoln Automotive Financial Services (873) highest in the luxury segment for a third consecutive year, with the company performing particularly well in the on-boarding process, billing and payment process and phone contact factors. BMW Financial (853) ranks second and Lexus Financial Services (850) ranks third.

Ford Credit ranks highest in the mass market segment with a score of 838, performing particularly well in the on-boarding process and phone contact factors. Bank of America (834) ranks second and Toyota Financial Services (832) comes third.