Differences in the execution of the digital application process has contributed to a significant performance gap between top and bottom performing lenders, says J.D. Power’s latest U.S. Consumer Financing Satisfaction Study.
The study measures overall customer satisfaction in the following categories: billing and payment process; onboarding process; phone contact; and website.
When it comes to the range of services that can be performed online, top-performing mass market and luxury lenders rate notably higher than the lowest performers, the study shows rates of 8.75 versus 7.93 and 8.85 versus 7.54, respectively.
With a score of 857, Ford Credit ranks highest among mass market brands. BB&T/RAC ranks second, and Honda Financial Services ranks third. Both institutions have a score of 855, according to J.D. Power.
Among the luxury brands, Lincoln Automotive Financial Services ranks highest with a score of 890. Lexus Financial Services ranks second (875), and Acura Financial Services (869) ranks third.
“With such erratic approaches to digitalization, many auto lenders are failing to successfully capitalize on tremendous cost-cutting opportunities that have proven to boost customer satisfaction,” Jim Houston, senior director of automotive finance at J.D. Power said. “With some lenders varying widely on ease-of-use satisfaction scores for their digital offerings, a huge opportunity is going unmet by many.”
Interestingly, while digital loan applications generate significantly higher satisfaction among both mass market and luxury customers, J.D. Power found that many also wait longer for a credit decision than those who apply through dealer representatives.
Only 30 percent of customers who applied online received a credit decision within 15 minutes, compared to 46 percent who filled out a paper application.
Additionally, time given to make first payments also drives consumer satisfaction, according to J.D. Power.
The study shows high-ranking mass market and luxury lenders perform highest on time given to make first payment.
On average, top performers allow a lead time of 21.2 days for mass market customers and 18.4 days for luxury customers prior to the first payment due date.
Autopay and web-based payment drive high customer satisfaction as well, according to the study. Mass market customers who pay by hard-copy check are significantly less satisfied than those who use autopay; 800 versus 851, respectively.
The study is based on responses gathered from July to August of over 14,500 customers who financed a new or used-car loan or lease within the past four years.