J.D. Power: Dealer Satisfaction with Financers at 5 Year Low
9 September 1998
J.D. Power and Associates Reports: Overall Dealer Satisfaction with Finance Providers Hits Five-Year Low Captive Finance Providers Rank Higher Than Banks for First Time
AGOURA HILLS, Calif., Sept. 8 -- Overall dealer satisfaction
with finance providers has reached its lowest level in five years as a result
of declines in the performance of independent finance providers and banks,
according to the J.D. Power and Associates 1998 Dealer Financing Satisfaction
Study(SM).
While the bank and independent segments declined, the captive segment
improved, ranking higher in satisfaction above banks for the first time in the
history of the study.
The study shows that high-volume dealers with annual new-vehicle
sales/lease volumes of more than 700 units are the least satisfied. These
dealers account for 79 percent of all indirect financing/leasing, although
they account for only 39 percent of the dealer population.
"An opportunity exists for finance providers to gain market share by
focusing on the needs of the large dealership population," said David McKay,
director automotive finance at J.D. Power and Associates. "Those who are
willing to take the initiative and cater to the needs of large-volume dealers
will gain a competitive advantage."
The study reveals that super-regional banks are well positioned in terms
of dealer satisfaction and value to expand their share of the floor planning
market. This shift will take place at the expense of the Big Three captives
who currently cover 75 percent of the market.
"Nearly half of all dealers report that they guarantee a share of their
retail business to their wholesale finance providers," said McKay. "Finance
providers who want to achieve a competitive advantage should also establish or
strengthen wholesale finance relationships with dealers."
Awards were given to the providers who achieved the highest levels of
satisfaction in Floor Planning, Prime Retail Credit and Retail Leasing. Ford
Credit received the award for Floor Planning for the third consecutive year,
which named them the highest-ranked provider in this product area. For the
second straight year, First Security Bank received the Prime Retail Credit
award. BMW Financial received the award for Retail Leasing for the second
year. Awards are determined by the ability of major providers to meet the
J.D. Power and Associates sample criteria set for the Dealer Financing
Satisfaction Study.
"The automobile and finance industries are both going through immense
structural changes," said McKay. "Even though customer satisfaction is not
necessarily the primary determinant of intended future business, it can be
used as a leveraging tool to capture new business in an unsettled industry."
The J.D. Power and Associates Dealer Financing Satisfaction Study is an
annual study, and this year's study is based on a mail survey conducted in
April and May of 1998. The study includes responses from more than 2,500 new-
vehicle dealer principals.
J.D. Power and Associates is an international firm best known for its
marketing information services in key business sectors including market
research, forecasting and customer satisfaction. The firm's quality and
satisfaction measurements are based on actual customer responses from more
than one million consumers annually. Headquartered in Agoura Hills, Calif.,
the company has U.S. offices in Torrance, Calif., Michigan and Connecticut.
The firm also has international offices serving Canada, the United
Kingdom/Europe and the Asia Pacific region.
J.D. Power and Associates can be accessed through the World Wide Web at
http://www.jdpower.com. Media e-mail contact: john.pepitone@jdpower.com.
This press release is provided for editorial use only. No advertising or
other promotional use can be made of the information in this release or J.D.
Power and Associates survey results without the express prior written consent
of J.D. Power and Associates.