WESTLAKE VILLAGE, Calif. — BMW Financial Services, Ford Credit, Honda Financial Services and Lexus Financial Services each rank highest in satisfying customers with the new-vehicle financing process, according to the J.D. Power and Associates 2007 Consumer Financing Satisfaction Study.
Now in its 12th year, the study measures customer satisfaction with the new-vehicle financing process. Four factors are examined to determine customers’ satisfaction with their automotive finance providers: provider offering, application/approval process, payment/billing process and customer contact experience.
BMW Financial Services ranks highest in the luxury lease segment with a score of 815 on a 1,000-point scale, performing particularly well in provider offering, payment/billing process and customer contact experience. Ford Credit (804) and Mercedes-Benz Financial (799) follow BMW Financial Services in the segment.
In the non-luxury lease segment, Honda Financial Services ranks highest (813), performing particularly well in provider offering, and billing and payment. Ford Credit (783) and GMAC (777) follow in the segment rankings.
Performing well in the payment and billing factor, Lexus Financial Services leads among luxury loan providers with a score of 782. Ford Credit follows Lexus Financial Services with 779, and GMAC follows Ford Credit at 774.
Ford Credit ranks highest among non-luxury loan providers with 781, performing particularly well in the areas of provider offering and customer contact experience. Suzuki Financial Services (776) and Volkswagen Credit (764) follow in the segment rankings.
The study finds that in 2007, 2 percent of new-vehicle financing customers refinanced their indirect loan, which resulted in more than $4 billion in originations. Credit unions acquired the majority of customers who refinanced their initial vehicle contracts, gaining 51 percent of captive customers and 58 percent of banking customers who refinanced. The most common reason for refinancing — given by 83 percent of refinancing customers — is finding a more competitive interest rate.
“There are two groups of customers that refinance: those who are self-driven and those who are solicited,” said Richard Howse, director of the automotive finance practice at J.D. Power and Associates. “The self-driven group provides little opportunity for the original finance provider to salvage the contract, considering these customers more than likely have pre-existing intentions to refinance. Yet, the opportunity does exist among those customers who are solicited by another finance provider. If a customer receives information about another lender offering a better rate, this may certainly be appealing for them. However, if a finance provider is able to build trust and a relationship with their customer, they may be able to deflect these solicitation efforts and prevent losing profitable business.”
The study also finds that the percentage of consumers who use the Internet to research finance options has declined since 2004. However, among consumers who do perform research on the Internet, the percentage of those who submit applications online has increased.
“Online application activity for customers of both the indirect and direct markets has increased, suggesting that buyer behavior in online financing is evolving,” said Howse. “Fewer casual shoppers are using the Internet simply to browse for information about their financing options. Instead, more serious and Internet-savvy customers are using this channel to access specific information about their finance options and then proceeding to apply online for a loan. This trend suggests that customers are feeling more comfortable with sharing their personal information online via these provider channels and may also prefer the convenience aspects that the Internet brings.”
The 2007 Consumer Financing Satisfaction Study is based on responses from 24,163 consumers who financed their new vehicle in the previous five to seven months. The study was fielded from May through October 2007.