A call for auto finance apps
When financing a car, today's customers are more likely to wonder, "Is there an app for that?"
If there's not, there should be.
An easy-to-use mobile app is one of the main drivers of customer satisfaction with auto lenders, according to J.D. Power's 2018 U.S. Consumer Financing Satisfaction Study. For captives, the ability to design a financing app that integrates payment and vehicle information in one place could give them an advantage over banks and credit unions.
The study, conducted from July to August 2018, was significantly overhauled this year to capture the full auto finance customer journey, which meant that for the first time J.D. Power asked about customers' experiences with lenders' mobile apps.
The reason? That's how customers demand to do business, said Jim Houston, senior director of J.D. Power's automotive finance practice.
Almost every lender will tell you they have a mobile app, Houston says, but, "there's a difference between having a mobile app where you put the website link into your phone and traditional app-store-like activity."
Overall satisfaction scores for the 23 percent of auto loan and lease customers that completed a digital application were 55 points higher than those who completed applications verbally or on paper.
When customers used the website and mobile app for the entire loan application, onboarding and payment process, J.D. Power found that use of the website and mobile app was the biggest influencer of satisfaction, accounting for 32 percent of the score.
Still, launching an app just to have one does not serve auto finance customers. If the program requires frequent updates, delays payments, freezes often or experiences other glitches that aren't promptly resolved, customer satisfaction declines. This is especially true when trouble with the app prompts customers to call an 800 number — defeating the purpose of an app.
The study notes that while mobile apps play the largest role in digital satisfaction, customer use is generally limited to monthly transactions. Additionally, customers said approval times on digital channels were longer than those on traditional methods.
Captives should work to extend the features of their auto finance mobile apps to drive even further value.
The goal, Houston said, should be a fully integrated mobile app that encompasses the details of both the vehicle and the financing. Rather than a separate app for their vehicles, customers are asking for a one-stop shop where they can check their balances, schedule payments, set due-date notifications, and receive payoff quotes on their phones, as well as automaker alerts when their car needs to be serviced, or when the vehicle is recalled.
"The captive finance companies are going to have a leg up on that," Houston said. "If [captives are] going to integrate with the OEM, [banks] may not have the same abilities that a captive would have."
Captives and lenders working to launch or enhance a mobile app are wise to meet consumers where they are -- on their phones. But even though lenders aren't technology companies, they should give customers what they've grown to expect -- an app that is fully integrated, easy to use and reliable.
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