Good advance marketing pays off for auto lenders, a study of new-vehicle financing concludes.
J.D. Power and Associates' annual Consumer Financing Satisfaction Study suggests that buyers who shop with a preferred lender in mind express greater satisfaction with the financing process. And that satisfaction leads to customer loyalty, says the study, which Power released last month.
Lisa Chlubiski, Power's senior account manager for auto finance, offered lenders this advice: "Don't wait until customers are in the dealership. Get them involved early on in making the selection."
Banks and finance companies make themselves known to customers through mail and phone promotions, Chlubiski said.
Advertisements on Web sites that help customers research new vehicles and financing options are especially effective, she said, because nearly three-fifths of buyers use those sites.
According to the Power study, buyers who arrived at a dealership with a lender preference and then used that lender had an overall satisfaction score of 837 on a 1,000-point scale. Half of those buyers said they would recommend their lender to others.
By contrast, buyers who allowed the dealer to work out financing had an average satisfaction score of 746. Only 23 percent of them said they would recommend their lender.
"There is a positive impact in partnering with the customer early on," Chlubiski told Automotive News.
The Power study concludes that lenders enhance satisfaction by sending loan customers their first statements quickly. Waiting three weeks or more for the first statement creates "a lot of anxiety," Chlubiski said.
The statement's clarity and the range of payment options that a lender offers also are keys to customer satisfaction, she said.
In the Power study, Hyundai Motor Finance Co. ranked first among nonluxury lenders with a customer satisfaction score of 795. Among luxury lenders, BMW Financial Services finished first with a score of 860.
BMW Financial also topped the list of luxury lease providers with a score of 786. Among nonluxury lease providers, Ford Motor Credit Co. finished first with a score of 787.
The Power study surveyed nearly 28,000 new-vehicle buyers between May and September 2008.