Consumer satisfaction with initial automotive financing increased 2 percent this year in large part due to consumer perceptions that they received a "fair deal," according to the J.D. Power and Associates 2002 Consumer Financing Satisfaction Study(SM) released on Sept. 30.

Satisfaction increased year-over-year for loan and lease consumers across all provider segments -- captive finance providers, banks, credit unions and independent finance companies.

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."

The study this year separates luxury vehicle consumers from non-luxury vehicle consumers.

"Luxury vehicle consumers have different needs and priorities when selecting their auto finance provider, and given this, we decided to analyze the results separately," said David McKay, senior director of auto finance for J.D. Power and Associates.

The study finds that luxury loan and lease consumers are much more satisfied than non-luxury loan/lease consumers with their finance providers. Luxury loan and lease customers are more satisfied with the finance set-up process, the finance and insurance manager and environment, billing and the fairness of the deal that they receive.

"Finance providers find luxury vehicle customers very desirable, as their credit ratings tend to be higher than non-luxury vehicle buyers," McKay said. "The increased competition and better credit ratings lead to lower finance rates and make it easier for luxury customers to have their loans and leases set up."

The study finds that lease customers -- both luxury and non-luxury -- are less satisfied than loan customers.

"The lessors have absorbed substantial losses on their off-lease vehicles," McKay said. "This has led to a number of banks and independent finance companies to leave the auto lease market. The firms that have remained in the leasing market are generally pricing the vehicle residuals substantially lower than they did in the past, which usually increases the monthly lease payments and makes leases less attractive to consumers."

Among financial providers, Ford Credit ranks highest in initial lease satisfaction in both the luxury and non-luxury segments. USAA Federal Savings Bank ranks highest in initial loan satisfaction in the non-luxury segment, while Infiniti Financial Services ranks highest in initial loan satisfaction in the luxury segment.

Consumers give Ford Credit particularly high marks for its billing process in the non-luxury lease segment. 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." USAA receives high marks across all four factors in the initial loan non-luxury segment, while Infiniti Financial Services receives high marks for its loan set-up process and perceptions of getting a "fair deal" in the initial loan luxury segment.

The 2002 Consumer Financing Satisfaction Study is based on 39,315 responses from consumers who purchased or leased a new vehicle in 2002. The study 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 a global marketing information services firm operating in business sectors including market research, forecasting, consulting, training and customer satisfaction.