2014 U.S. Consumer Financing Satisfaction Study Results
By Jeff Youngs, November 21, 2014
To satisfy their customers, automotive finance providers need to offer comprehensive first-rate service throughout the life of the loan, rather than excelling only in some areas of the auto loan process, according to the recently published J.D. Power 2014 U.S. Consumer Financing Satisfaction Study.SM
The study was redesigned for 2014 to include used-vehicle transactions as well as new, and to expand the time from the financing origination to 4 years, compared with one year in previous studies. The study examines the overall customer experience with the financing of either an automotive loan or lease and measures satisfaction among customers who financed or leased their vehicle indirectly through a dealer, or directly through an auto finance provider. Four key factors are analyzed: on-boarding process; billing and payment process; website; and phone contact. The study is conducted in two vehicle segments: luxury and mass market.
Satisfaction Higher Among New-Vehicle Financers
The 2014 Consumer Financing Satisfaction Study finds that overall satisfaction in both the luxury and mass market segments is significantly higher for loans on new vehicles (844 on a 1,000-point scale) than on used vehicles (817). Higher satisfaction in the billing and payment process and website factors are the main drivers of that difference among customers with a new-vehicle loan origination (846 and 840, respectively) than among those with a used-vehicle financing origination (819 and 817, respectively).
Similarly, overall satisfaction with the loan and lease experience differs by segment. Customer satisfaction in the luxury segment is higher for leases (847) than for loans (840), but the opposite is true in the mass market segment. There, satisfaction is higher for loans (815) than for leases (807).
Ensuring customer satisfaction is critical for finance providers, as more than 90% of customers who rate themselves "highly satisfied" (overall satisfaction scores of more than 800 points) indicate they "definitely will" use their current lender in the future. Moreover, more than 50% of customers indicate that they selected their provider based on inputs other than dealer recommendations. According to the study, avoidance of billing and payment errors (incorrect payment amounts listed on statements, misapplied payments, or incorrect personal account information) is the most influential key performance indicator impacting satisfaction.
Across-The-Board Satisfaction Is Vital
"Satisfying auto financing customers is not contingent on excelling in one area," said Mike Buckingham, senior director of the automotive finance practice at J.D. Power. "It's a continuum across the entire process, with the stage set during the on-boarding process--or the initial discussion with customers--and continuing through the billing and payment process. The execution of finance process best practices is more important than the innovation of new tools to complete transactions. All lenders use mostly the same technology, but the ones that execute better across all areas are the ones with the most satisfied customers."
Technology Plays Key Role During Billing and Payment Process
Buckingham notes that technology does play a key role during the billing and payment process, which is the factor with the most impact on overall satisfaction. Many customers seek not only self-service tools to set up an automatic payment system, but they also want tools to confirm that their payments were received and processed and to check the balance of their account, with many preferring to conduct these activities using their computer, tablet or smartphone.
"Lenders need to make it easy for customers to access their account anytime anywhere," said Buckingham. "That means providing a website and apps that are reliable and that make the most critical elements of the billing process easily identifiable."
Lincoln Automotive Tops 2014 Rankings
Lincoln Automotive Financial Services (867) ranks highest in the luxury segment for a second consecutive year, performing highest in the billing and payment process and website factors. Lexus Financial Services (859) ranks second and Audi Financial Services (854) ranks third.
Volkswagen Credit ranks highest in the mass market segment, with a score of 836, and scores highest in billing and payment process (tied with Ford Credit) and website. Ford Credit ranks second with a score of 835 and Honda Financial Services ranks third with 829.
Based on the Consumer Financing Satisfaction Study, J.D. Power offers the following consumer tips on auto financing:
- Check various consumer publications and websites to find customer feedback and ratings on various automotive lenders.
- If the lender associated with your chosen make of vehicle has a less-than-outstanding reputation for service, consider alternatives, such as borrowing from a bank or a private lender.
- Discuss the lending, billing, and payment process with your dealer and/or lender prior to purchase, so you'll know what to expect.
About the Study
The 2014 U.S. Consumer Financing Satisfaction Study is based on responses from 20,670 new- and used-vehicle purchasers or lessees who obtained a vehicle loan or lease. The study includes vehicles financed for model years 2010 through 2014. The study was fielded between July and September 2014.
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