Dealer satisfaction with automotive finance providers has again reached record highs, according to the J.D. Power and Associates 2003 Dealer Financing Satisfaction Study(SM) released July 30.

The study finds that 74 percent of dealer principals are satisfied with their financial providers -- the highest level of satisfaction since the inception of the study in 1994. The previous high was 73 percent set in the 2002 study.

Among the three major market segments, auto manufacturer finance companies, also known as "captives," lead the way in dealer satisfaction, with 87 percent of dealers indicating they are satisfied with their captive finance provider.

"The captives have continued to provide consistent support of the auto finance market through improved service levels, low interest rates and the continued use of new-vehicle financing incentives," said James Lohmann, director of auto finance at J.D. Power and Associates. "These have combined to earn captives their highest ranking in the 10-year history of the study."

Notable improvements are observed among the captives for PRIMUS's private labels, Mitsubishi Motors Credit of America and Audi Financial Services.

Banks continue to close the gap with the captives as dealer satisfaction with banks has increased to 78 percent -- up from 75 percent in the 2002 study. SouthTrust and PNC Bank realize the largest improvements among banks.

Dealer satisfaction with independents, which typically finance vehicles for consumers with lower credit ratings, decreased to 58 percent -- down from 61 percent in 2002.

"Due to increased default rates, most lenders in the marketplace were forced to tighten credit standards, and this action has had the most impact on the independents," Lohmann said. "As a result, dealer satisfaction for this segment has declined year over year."

Among the independents, large improvements are noted for Nuvell Finance and TransSouth Financial.

For the third consecutive year, Audi Financial Services ranks highest in dealer satisfaction in prime retail credit and retail leasing. Volvo Finance ranks highest in floor planning, which is associated with the dealer's ability to finance and insure their dealer inventory.

Based on responses from more than 4,300 dealer principals, the study measures satisfaction levels with finance providers in four areas: prime retail credit, non-prime retail credit, retail leasing and floor planning.

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.

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