The changing landscape of the dealer financing market has led to an increase in the importance of service and relationship building, which are now more influential than product offerings in dealer satisfaction with lenders, according to the J.D. Power and Associates 2011 Canadian Dealer Financing Satisfaction Study released today.
The study examines dealer satisfaction with finance lenders in four segments: prime retail credit; retail leasing; floor planning, and sub-prime retail credit.
BMW Financial Services ranks highest in dealer satisfaction with prime retail credit services for a second consecutive year with a score of 921 on a 1,000-point scale. The study suggests the captive performs particularly well in the application/approval process factor.
Mercedes-Benz Financial Services came in second with a score of 919, and performs particularly well in the provider offering factor.
Bank of Montreal ranks third in the segment with a score of 880.
BMW Financial Services also ranks highest in dealer satisfaction with retail leasing with a score of 899, beating Mercedes-Benz and VW Credit Canada (835).
Scotiabank ranks highest in dealer satisfaction with floor planning with a score of 888. According to J.D. Power, Canada’s most international bank performs particularly well in finance provider credit line offering, floor plan portfolio management and floor plan support.
Ford Credit Canada took second (872) and Honda Financial Services at 858 captured third
Within the prime and sub-prime retail segments, three key factors contribute to satisfaction: provider offering; application/approval process; and sales representative relationship. Four factors are measured in the retail leasing segment: provider offering; application/approval process; vehicle return process; and sales representative relationship. In addition, four factors are measured in the floor planning segment: provider credit line offering; floor plan support; floor plan portfolio management; and sales representative relationship.
For the first time since the inception of the study in 1998, the importance of the application/approval process factor outweighs the importance of provider offerings in all three retail segments including prime, sub-prime and leasing.
“The increased importance of the application and approval process underscores the changing market environment and dealer needs,” said Lubo Li, senior director and financial services practice leader at J.D Power and Associates, Toronto.
“Product offerings by various lenders have become increasingly similar and competitive in recent years. As a result, it has become critical for financing providers to differentiate themselves by offering a seamless process and superior, value-added services.”
The 2011 Canadian Dealer Financing Satisfaction Study is based on responses from more than 1,700 new-vehicle dealers. The study was fielded between February and March 2011.