July 29, 2021

Communication key in dealer, lender relationships in 2020

Adaptability and resilience during the pandemic drove dealership satisfaction with consumer lenders this year, according to J.D. Power. As constraints prompted by the coronavirus pushed more buyer financing activity online and limited lender visits to dealerships, reliable communication between lenders and dealership employees never was so important.

That is the takeaway from 3,960 dealership finance personnel who took part in J.D. Power’s 2020 U.S. Dealer Financing Satisfaction Study and cited issues reaching lender representatives late in the summer. Lenders were short staffed, according to dealers, who reported exceptionally long wait times, said Patrick Roosenberg, director of automotive finance intelligence at J.D. Power.

“Dealers are looking to their lenders to be open, honest, and communicate on a regular basis,” Roosenberg said. “They need to be able to reach you — especially the credit staff and the funders.”

Lenders were less reliable as a result of the pandemic, compared with previous studies, J.D. Power said. Dealers reported in August and September — when the study was fielded — that with fewer sales on the line, lenders were harder to reach. In 2019, 67 percent of dealer respondents said they could “always” get hold of captive finance representatives when needed. That figure dropped to 43 percent this year.

For noncaptive lenders, 43 percent of dealers said they had no trouble reaching representatives, down from 57 percent last year.

When the survey was fielded, “dealers were opening up again and getting an influx of digital opportunities from the consumer,” Roosenberg said. “But a lot of lenders were still — and continue to be — working remote.”

Top lenders

Volkswagen Credit and Citizens One Auto Finance ranked highest in retailer satisfaction among mass-market captive and noncaptive auto lenders in 2020. The study was significantly retooled this year, adding categories such as noncaptive subprime.

The latest study measures auto dealer satisfaction in six auto lender segments: captive luxury prime; captive mass-market prime; lease; noncaptive national prime; noncaptive regional prime; and noncaptive subprime. Dealership respondents could rank up to eight lenders. Dealership respondents could rank up to eight lenders, resulting in 18,541 evaluations. J.D. Power did not publish the results or rank luxury captive lenders because of a small sample size.

Volkswagen Credit ranked highest among lenders in the mass-market category for overall dealer satisfaction, with a score of 939

on a 1,000-point scale, followed by Subaru Motors Finance, with 934, and Honda Financial Services, with 902. Subaru Motors Finance is the consumer-facing name for Chase Auto, which has supported a private label partnership as Subaru’s captive since 2001.

For national banking partners, T.D. Auto Finance led the pack, with 931, followed by Ally Financial, with 922, and Chase Automotive Finance rounding out the top three, with a score of 872. Ally Financial ranked highest among subprime lenders, with a score of 913, followed by Chase Automotive Finance, with 878, and Capital One Auto Finance, with 820. Audi Financial Services led the leasing category, with 970, followed by Subaru Motors Finance, with 946, and Volkswagen Credit, at 941.