WESTLAKE VILLAGE, Calif. — Auto finance sources cannot focus their efforts on only one or two areas of the financing process and expect to have satisfied customers; they need to excel in all areas throughout the life of the loan or lease. That was the conclusion of J.D. Power and Associates' 2014 U.S. Consumer Financing Satisfaction Study.
This year's study, which looks at auto loans originated in the indirect and direct-to-consumer channels, includes used-vehicle financing. The firm also expanded the period in which customer satisfaction with a finance source is measured from one year to four years. Key factors studied included on-boarding process, billing and payment process, website, and phone contact. The study was also conducted in two vehicle segments: luxury and mass market. Satisfaction is calculated on a 1,000-point scale.
“Satisfying auto financing customers is not contingent on excelling in one area; 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,” said Mike Buckingham, senior director of the automotive finance practice at J.D. Power. “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.”
Buckingham noted 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, 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.”
The study also found that overall satisfaction in both the luxury and mass market segments is significantly higher for loans on new vehicles (844) than on used vehicles (817). That difference is driven largely by significantly higher satisfaction in the billing and payment process and website factors 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).
The loan and lease experience differs by segment, with overall satisfaction in the luxury segment significantly higher for leases (847) than for loans (840). The opposite is true in the mass-market segment, where satisfaction is significantly higher for loans (815) than for leases (807).
Ensuring customer satisfaction is critical for finance providers, as more than 90% of highly satisfied customers (overall satisfaction scores of more than 800 points) indicate they “definitely will” use their current lender in the future. Further, more than 50% of customers indicate that they selected their provider based on inputs other than dealer recommendations.
Avoidance of billing and payment errors is the most influential key performance indicator impacting satisfaction. Incorrect payment amounts listed on statements, misapplied payments, or incorrect/not updated personal account information leave customers with a perception that their finance provider is disorganized.
For the second consecutive year, Lincoln Automotive Financial Services (867) ranked highest in the luxury segment and performed highest in the billing and payment process and website factors. Lexus Financial Services (859) ranked second and Audi Financial Services (854) ranked third.
Volkswagen Credit ranked highest in the mass market segment with a score of 836. It also had the highest scores in billing and payment process (tied with Ford Credit) and website. Ford Credit ranked second with a score of 835 and Honda Financial Services ranked third with 829.