Auto manufacturer finance companies, known as captives, continue to outperform banks, independent lending institutions and credit unions in satisfying dealers with lending packages for vehicle buyers, according to the J.D. Power and Associates 2001 Dealer Financing Satisfaction Study(SM) released Aug. 22.

Satisfaction levels in all four study segments increased in 2001. Captives led the way with 85 percent of dealers indicating they are "very" or "somewhat" satisfied with their financial provider, followed by credit unions at 76 percent, banks at 72 percent and independents at 60 percent.

"The consistent support of the auto finance market, coupled with improved service levels and growing use of new-vehicle financing incentives, have resulted in captives earning their highest ranking in the eight-year history of the study," said David McKay, director of auto finance and insurance for J.D. Power and Associates.

The study measures dealer satisfaction with their finance providers in the areas of overall satisfaction, prime retail credit, retail leasing, floor planning, non-prime retail credit and account management. More than 4,700 dealer principals participated in the study.

After reaching a low point in 1998, overall dealer satisfaction with their financial providers has rebounded. Satisfaction levels have risen three points in the past year, increasing from 69 percent of dealers who were satisfied with their financial providers in 2000 to 72 percent in 2001 -- the second-highest level recorded since the study’s inception in 1994. Satisfaction levels reached 73 percent in 1995.

Based on feedback from dealer principals, the study ranks finance providers in three key segments: prime retail credit, retail leasing and floor planning.

Audi Financial Services ranks highest in dealer satisfaction for the prime retail credit measure. Strong performance on competitiveness (rates, reserves and plans offered), dealer support and consumer qualifications earned Audi Financial the highest ranking. BMW Financial ranks second.

Audi Financial Services also ranks highest in the retail leasing measure of dealer satisfaction, with strong performance on competitiveness, lease initiation and lease-end support. BMW Financial also ranks second in this segment.

For both prime retail credit and retail leasing measures, American Honda Finance, Volvo Finance and Nissan Motor Acceptance Corporation (NMAC) showed the largest improvements when compared to 2000 study results.

VW Credit ranks highest in dealer satisfaction for floor planning, followed by Comerica Bank.

"Floor planning is a strategic product that, while profitable on its own, can be leveraged to increase a lender’s share of retail financing," McKay said.

The study shows that dealers give 29 percent more of their prime retail credit business to the finance provider that handles the dealer’s floor planning. Toyota Financial Services and Wells Fargo Bank made the largest improvement in floor planning, compared to 2000 study results.

Among other factors that contribute to overall satisfaction with finance providers, GMAC has shown substantial improvement in building its non-prime retail credit satisfaction.

"Dealers see the high level of consumer debt, the economic slowdown and the loss of high-paying jobs in sectors, and recognize that the need for non-prime credit will grow in the future," McKay said.

The study indicates that 55 percent of all new-vehicle dealers report non-prime credit will increase in importance in the future, while only 2 percent indicate that it will decline in importance. Along with GMAC, Nuvell and WFS demonstrated the most improvement in non-prime retail credit satisfaction performance, compared to 2000 study results.

BMW Financial Services shows the strongest performance in the area of account management, which is based on sales satisfaction, service and support, and general relationships. Also demonstrating solid performance in this area are Audi Financial Services and VW Credit, according to the study.

About J.D. Power and Associates

Headquartered in Agoura Hills, Calif., J.D. Power and Associates is a global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction.

The firm’s quality and satisfaction measurements are based on actual responses from millions of consumers annually.

J.D. Power and Associates can be accessed through the Internet at www.jdpa.com.