According to the J.D. Power 2022 U.S. Consumer Financing Satisfaction Study, released today, rising interest rates, slowing loan and lease volumes, and increased competition are causing auto lenders to realize their most valuable future customers are the ones they already have.
The report from J.D. Power, based in Troy, shows customer retention has become a key focal point for auto loan providers, putting the spotlight on specific actions lenders can take to drive increased loyalty and brand advocacy.
“Consumers have more lending choices than ever before,” says Patrick Roosenberg, director of automotive finance intelligence at J.D. Power. “They’re doing more research and doing that research earlier in the vehicle-buying process. That’s why the customer experiences they are having with their existing lender is so important. For lenders that want to secure repeat business with existing customers, it is critical to consistently anticipate and meet their needs at key points in the customer journey.”
Following are key findings of the 2022 study:
- Captive lenders significantly outperform non-captives for customer advocacy: For a second consecutive year, automotive captive lenders significantly outperform non-captive lenders when it comes to brand advocacy with existing customers. The average Net Promoter Score (NPS) for captive lenders is 56 and the average NPS for non-captives is 40. Industry-wide, customers who are promoters (those who say their likelihood to recommend their current lender as a 9 or 10 [on a 0-10 scale]) are nearly twice as likely to say they “definitely will” consider their current lender for their next vehicle when compared to customers who are passive (those who say their likelihood to recommend their current lender as a 7 or 8).
- Most auto financing research begins a month before a purchase: Among auto loan customers who research financing options prior to a purchase, most begin the research process more than 30 days prior to purchasing or leasing a vehicle. Effective use of both applied for and unsolicited pre-approvals can lead to a greater customer recapture rate and conquest opportunities.
- Key actions to drive brand advocacy: Specific actions taken by auto lenders that have the most positive effect on customer advocacy include easy-to-use websites, useful account review information, and electronic statements that are easy to set up.
Capital One Auto Finance ranks highest in customer satisfaction among luxury brands, with a score of 879. GM Financial (865) ranks second, and BMW Financial Services (858) ranks third.
Ford Credit ranks highest among mass market brands for a second consecutive year, with a score of 877. Southeast Toyota Finance (874) ranks second, while Capital One Auto Finance (870) and Honda Financial Services (870) each rank third in a tie.
To view the ranks charts for each segment, click here.
The U.S. Consumer Financing Satisfaction Study measures overall auto financing customer satisfaction in five factors (listed alphabetically): account management; application/approval process; billing and payment process; customer orientation process; and customer service experience.
The study was conducted in July-August 2022 and is based on responses from 10,199 customers who financed a new or used vehicle through a loan or lease within the past three years.
For more information about the U.S. Consumer Financing Satisfaction Study, click here.
J.D. Power is a global leader in consumer insights, advisory services, and data and analytics. A pioneer in the use of big data, artificial intelligence, and algorithmic modeling capabilities to understand consumer behavior, J.D. Power has been delivering industry intelligence on customer interactions with brands and products for more than 50 years.