Wednesday, Dec. 12, 2007, 07:00 PM UPDATED 11:59 AMBy Nick Zulovich
WESTLAKE VILLAGE, Calif. — Who takes top honors when it comes to satisfying customers in the new-vehicle financing process? J.D. Power and Associates recently measured this and released its results this week.
The factors taken into account in the ranking process included provider offering, application/approval process, payment/billing process and customer experience.
Overall, J.D. Power recognized BMW Financial Services, Ford Credit, Honda Financial Services and Lexus Financial Services for all excelling in satisfaction.
For the luxury lease segment, BMW Financial took top honors with a score of 815 on a 1,000-point scale. According to officials, the automaker's financial arm performed "particularly well" in provider offering, payment/billing process and customer experience.
The was the first time BMW Financial received such recognition in this category, its officials noted, saying that the captive jumped 47 points to take it from seventh to first.
"While competitive financial offerings are an important factor in consumer satisfaction, consumers are seeking more from their finance providers," explained Edward Robinson, president and chief executive officer of BMW Financial. "Being recognized in both the dealer and consumer studies speaks to the importance we place on the three critical elements of success in business — the dealer customer, retail owner and manufacturer all having the same expectation of peak performance.
"Consumers expect competent and courteous finance staff at the dealership, complimented by efficient servicing of their contract for the life of the loan, including accurate billing and prompt attention to questions and concerns," he continued.
Furthermore, Robinson said, "Our customers recognize the emphasis we place on their satisfaction and this ranking acknowledges our commitment to them and to process excellence. Given the wealth of choices available to the luxury consumer, we are delighted that so many BMW drivers select BMW Financial Services as their financial services provider of choice."
Coming next in line was Ford Credit, with a score of 804, followed by Mercedes-Benz Financial at 799.
In the next category, the non-luxury lease segment, it was Honda Financial that ranked highest at 813. J.D. Power pointed out that the captive showed "particularly well" in provider offering, along with billing and payment. Following Honda Financial were Ford Credit at 783 and GMAC at 777.
When it came to luxury loan providers, it was Lexus Financial that took home top marks, posting a score of 782, followed by Ford Credit at 779 and GMAC at 774.
In further analysis of the marketplace, J.D. Power found that 2 percent of new-vehicle financing customers turned to indirect loans in 2007, which led to more than $4 billion in originations.
It was credit unions who grabbed more customers deciding to refinance. These financial institutions gained 51 percent of captive customers and 58 percent of banking customers. Company officials noted that consumers' most popular reason for refinancing at 83 percent was finding a more competitive interest rate.
"There are two groups of customers that refinance, those who are self-driven and those who are solicited," Richard Howse, director of automotive finance practice for J.D. Power, indicated.
"The self-driven group provides little opportunity for the original finance provider to salvage the contract, considering these customers more than likely to have pre-existing intentions to refinance. Yet, the opportunity does exist among those customers who are solicited by another finance provider," he added.
"If a customer receives information about another lender offering a better rate, this may certainly be appealing for them," he continued. "However, if a finance provider is able to build trust and a relationship with their customer, they may be able to deflect these solicitation efforts and prevent losing profitable business."
Moreover, the study discovered that the percentage of consumers using the Internet to research financing options actually dropped since 2004. And yet, of those consumers who do look online for this information, the percentage of those who submit applications via the Web has grown.
"Online application activity for customers of both indirect and direct markets has increased, suggesting that buyer behavior in online financing is evolving," Howse highlighted. "Fewer casual shoppers are using the Internet simply to browse for information about their financing options.
"Instead, more serious and Internet-savvy customers are using this channel to access specific information about their finance options and then proceeding to apply online for a loan," he said. "This trend suggests that customers are feeling more comfortable with sharing their personal information online via these provider channels and may also prefer the convenience aspects that the Internet brings."
According to J.D. Power, its study was based on responses from 24,163 consumers who financed a new vehicle in the last five to seven months.
J.D. Power broke down all the rankings as follows:
Initial Lease Satisfaction Index Ranking: Luxury Segment
BMW Financial Services: 815
Ford Credit: 804
Mercedes-Benz Financial: 799
Luxury Lease Segment Average: 783
Lexus Financial Services: 775
Audi Financial Services: 762
Honda Financial Services: 761
Infiniti Financial Services: 745
US Bank: 676
Included in the study but not ranked due to small sample size are: Porsche Financial Services, Volvo Car Finance and Wells Fargo Auto Finance.
Initial Lease Satisfaction Index Ranking: Non-Luxury Segment
Honda Financial Services: 813
Ford Credit: 783
Toyota Financial Services: 768
Volkswagen Credit: 768
Non-Luxury Lease Segment Average: 762
Chrysler Financial: 739
Nissan Motor Acceptance: 708
Included in the study but not ranked due to small sample size are: Hyundai Motor Finance Co., Mazda American Credit, Mitsubishi Motors Credit, Subaru Motors Finance, US Bank and Wells Fargo Auto Finance.
Initial Loan Satisfaction Index Ranking: Luxury Segment
Lexus Financial Services: 782
Ford Credit: 779
Honda Financial Services: 755
Luxury Loan Segment Average: 744
Chase Auto Finance: 699
Included in the study but not ranked due to small sample size are: Audi Financial Services, Bank of America, Infiniti Financial Services and Mercedes- Benz Financial.
Initial Loan Satisfaction Index Ranking: Non-Luxury Segment
Ford Credit: 781
Suzuki Financial Services: 776
Volkswagen Credit: 764
Honda Financial Services: 762
Hyundai Motor Finance Co.: 744
Toyota Financial Services: 733
Non-Luxury Loan Segment Average: 720
Nissan Motor Acceptance: 711
Mazda American Credit: 709
World Omni: 706
Bank of America: 703
Chrysler Financial: 698
SunTrust Bank: 683
US Bank: 678
Subaru Motors Finance: 677
Wachovia Dealer Services: 676
Branch Banking and Trust: 668
Wells Fargo Auto Finance: 666
Citizens/Charter One Auto Finance: 665
Chase Auto Finance: 664
Harris Bank: 664
Capital One Auto Finance: 660
Sovereign Bank: 643
Fifth Third Bank: 630
CitiFinancial Auto: 618
Included in the study but not ranked due to sample size are: AmeriCredit, Bank of the West, Compass Bank, HSBC Auto Finance, Huntington National Bank, Kia Motor Finance, M & T Bank, Mitsubishi Motors Credit, Nuvell Credit, PNC Bank, Regions/AMSouth and Valley National Bank.