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2017 U.S. Consumer Financing Satisfaction Study: Auto Lenders’ Differing Digital Approach Creates Wide Satisfaction Gap between Top and Bottom Performers

2017 U.S. Consumer Financing Satisfaction Study: Auto Lenders’ Differing Digital Approach Creates Wide Satisfaction Gap between Top and Bottom Performers

By Joseph Dobrian, November 14, 2017
Submitting auto loan applications by computer can increase overall customer satisfaction with the vehicle-buying experience. However, if the lender doesn’t offer a top-performing applications platform, customer satisfaction could suffer. The recently published J.D. Power 2017 U.S. Consumer Financing Satisfaction StudySM notes that the top-performing mass-market and luxury lenders rate significantly higher than the lowest performers (8.75 vs. 7.93 and 8.85 vs. 7.54, respectively, on a 10-point scale) in terms of the range of services that can be performed online. That—satisfaction with online transactions—is the most heavily weighted website attribute measured in the study.

“With such erratic approaches to digitalization, many auto lenders are failing to successfully capitalize on tremendous cost-cutting opportunities that have proven to boost customer satisfaction,” said Jim Houston, Senior Director of Automotive Finance at J.D. Power. “With some lenders varying widely on ease-of-use satisfaction scores for their digital offerings, a huge opportunity is going unmet by many.”

One of the key findings of the study is that digital loan applications generate significantly higher satisfaction—for some respondents. While the digital application channel generates significantly higher levels of overall satisfaction among both mass-market and luxury vehicle customers, many report having had to wait longer for a credit decision than those who apply for auto loans through dealer representatives. Just 30% of customers applying online received a credit decision within 15 minutes, compared with 46% of those who filled out a paper application with a dealer.

The study also finds that the amount of time given to make the first payment on a vehicle loan has a significant impact on customers’ assessment of the online application experience. Both mass-market and luxury lenders score highest on the time given to make first payment: They allow an average lead time of 21.2 days for mass-market customers and 18.4 days for luxury customers prior to first payment due date.

Autopay and Web-based payment drive the highest customer satisfaction. Mass-market customers paying by hard-copy check are significantly less satisfied than those using autopay (800 vs. 851, respectively, on a 1,000-point scale).

Ford, Lincoln Captives Rank Highest in Customer Satisfaction
Lincoln Automotive Financial Services ranks highest in customer satisfaction among luxury brands, with a score of 890. Lexus Financial Services (875) ranks second and Acura Financial Services (869) ranks third. Ford Credit ranks highest among mass-market brands, with a score of 857. BB&T/RAC and Honda Financial Services tie for second with scores of 855.

Consumer Tips
Based on the study, J.D. Power offers the following consumer tips:

  • If you have confidence in the helpfulness of your vehicle dealer (and you should), discuss the details of the loan prior to application, whether you apply online or in person at the dealership. Come prepared with questions.
  • Discuss the lead time that will be allowed, prior to first payment, with your dealer. You might be able to arrange better terms, even if you complete the process online.
  • Consider the possibilities of automated payment, rather than writing a paper check. Many customers find automation the easier option.

About the Study
The 2017 U.S. Consumer Financing Satisfaction Study measures overall customer satisfaction in four factors (listed alphabetically): billing and payment process; onboarding process; phone contact; and website. Satisfaction is calculated on a 1,000-point scale. The study is based on responses from more than 14,500 customers who financed a new- or used-car loan or lease within the past 4 years and was fielded in July-August 2017.

Additional Research:

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