Longer financing terms and aggressive incentives have consumers feeling good about their new light-vehicle purchase, and the result is the second consecutive year of increased satisfaction with initial automotive financing, according to the J.D. Power and Associates 2003 Consumer Financing Satisfaction Study(SM).
Consumers’ satisfaction with their dealer-arranged automotive financing has increased a modest 1 percent this year and 4 percent in the past two years, in large part due to consumer perceptions that they received a "fair deal." Satisfaction has increased year-over-year for loan and lease consumers across all provider groups—captive finance providers (the financing arms of manufacturers), banks, credit unions and independent finance companies.
Low interest rates have more consumers opting to finance their new vehicle with a loan rather than with a lease. Among survey respondents, 58 percent used a loan to purchase their new vehicle, compared with 57 percent in the 2002 study and 50 percent in 2001. The average loan term length also has increased to 58 months, up from 54 months in 2002.
"Whether they purchase or lease a new vehicle, getting a fair deal is the most important factor influencing consumers’ satisfaction with their auto finance provider," said James Lohmann, director of auto finance for J.D. Power and Associates. "How well a new-vehicle loan or lease is set up and the timeliness and accuracy of billing also play important roles. Many of the leading financing companies have created processes to ensure that these basic needs are met."
The study measures customer satisfaction with consumer financing in luxury and non-luxury segments for loans and leases. Ford Credit ranks highest for the second consecutive year in initial lease satisfaction among both luxury and non-luxury vehicle buyers. Mazda American Credit (a private label of PRIMUS) ranks highest in initial loan satisfaction among non-luxury buyers, while Infiniti Financial Services ranks highest in initial loan satisfaction in the luxury segment for the second straight year.
Overall consumer satisfaction is measured in four areas: how well a loan or lease is set up; the person who handles the finance processing and the environment in which that takes place; timeliness and accuracy of billing; and the perception of receiving a "fair deal."
Ford Credit receives particularly high marks in the non-luxury lease segment for its billing process and providing a fair deal. In the luxury lease segment, Ford Credit performs well in the lease set-up process, the set-up person and environment, and the perception of getting a fair deal.
Infiniti Financial Services receives high marks across all four factors in the initial loan luxury segment, while Mazda American Credit receives high scores for its loan set-up process, billing, and perceptions of getting a fair deal in the initial loan non-luxury segment.
The 2003 Consumer Financing Satisfaction Study is based on 41,952 responses from consumers who purchased or leased a new vehicle in January and February 2003. The study, which focuses only on dealer-arranged financing (also known as indirect financing), measures financial providers in the following areas: new-vehicle initial financing; end-of-term financing; leasing satisfaction on a consumer’s prior vehicles; and contact with a provider’s service center.
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in business sectors including market research, forecasting, consulting, training and customer satisfaction.
The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually.
For more information visit www.jdpower.com.
