Customers' auto finance choices can have a big effect on their brand loyalty. And dealerships that exploit those choices can raise their own loyalty rates, Experian Automotive says.
It's well known that lease customers are more loyal than customers who take out a loan. Lease customers must return to the dealership at the end of their lease.
But other factors affect customer loyalty, too, said Experian Automotive President Scott Waldron, who spoke at the NADA/IHS Automotive Forum last month in New York.
For example, Waldron said, subprime customers often are the most loyal customers for volume brands.
Subprime finance customers were more loyal than prime-risk customers for American Honda Finance Corp., Toyota Financial Services, Ford Motor Credit Co., Nissan Financial Services and Infiniti Financial Services.
Jeff Anderson, Experian's director of consulting and analytics, said separately that dealerships can push the finance deals that correlate with loyalty. They can do this by optimizing their "mix of lenders based on their specific brands, vehicle/segment mix, and the demographics of their customer base," he wrote in an e-mail last week.
Loyalty rates also show captives' finance customers are more loyal than noncaptives' customers for various brands, Waldron said.
Loyalty was higher among captive finance customers for the Ford, Toyota, Honda, Hyundai, Chevrolet, Nissan and Dodge brands, he said. Factory incentives often enable captive finance companies to offer the best deals. Captives also can send marketing messages to customers with their monthly statements.
Anderson said captives are especially likely to have the best lease deals. And, he said, captives' comprehensive communication programs also are a plus.
"Many captives also have strong owner communication programs in place, tracking the customer through their life cycle, marketing the right vehicle when it is time for them to be back in market."