J.D. Power auto finance study: Dealers still favor face-to-face relationships
When it comes to building business relationships, J.D. Power experts see that there is no substitute for an effective face-to-face sales meeting.
According to the J.D. Power 2023 U.S. Dealer Financing Satisfaction Study, 77% of dealership F&I teams say in-person meetings with sales reps are the key to increased business with finance companies.
That assertion came even as auto financing has become an increasingly electronic process, and dealership finance teams are generally supportive of new technologies like artificial intelligence being used in the underwriting process.
“Finance teams overwhelmingly prefer one-on-one interaction with lending sales reps in the dealership, but there is a catch,” said Patrick Roosenberg, senior director of automotive finance intelligence at J.D. Power. “Those sales reps need to be prepared and the meetings need to be highly effective.
“When sales reps can clearly communicate current and upcoming programs and speak to the specifics of the dealership customer base, dealers are four times more likely to send more business within the next 12 months,” Roosenberg continued. “The problem is, today, lender reps miss the mark on delivering a highly effective sales meeting nearly 40% of the time.”
While dealers are clear with their preference for interpersonal relationships in the sales process, J.D. Power noticed some dealership F&I teams are embracing new technology options as well.
“When it comes to the introduction of AI and machine learning in the loan adjudication and approval process, 30% of dealership finance teams say they are comfortable with the process,” Roosenberg said. “However, half say they are not, so it really is about striking the right balance between people and technology as the industry evolves.”
So, which finance companies are excelling at using technology and their human resources?
Southeast Toyota Finance ranked highest in overall dealer satisfaction the Captive Mass Market—Prime category with a score of 901, followed by Subaru Motors Finance (819) and Mazda Financial Services (766).
In the Non-Captive National—Prime category, TD Auto Finance ranked highest in overall dealer satisfaction for a fourth consecutive year, with a score of 878. Ally Financial (854) came in second and Wells Fargo Auto (778) landed in third.
For Non-Captive Regional—Prime, Huntington National Bank took the top spot in overall dealer satisfaction with a score of 753. Santander Auto Finance (746) ranked second and Fifth Third Bank (703) came in third.
Among Non-Captive—Subpime, Ally Financial ranked highest in overall dealer satisfaction for a third consecutive year, with a score of 852. Chase Automotive Finance (762) landed in second and Wells Fargo Auto (718) came in third.
The 2023 U.S. Dealer Financing Satisfaction Study is based on responses from 3,552 auto dealer financial professionals.
The study, which was fielded in April and May, measures dealer satisfaction in five segments of finance companies.