Study: Auto Lenders Find Customer Retention Key to Generating New Loans

To continue generating new lease and loan volumes, automakers have found customer retention to be essential, according to new research from JD Power. // Image bank

According to the 2022 JD Power U.S. Consumer Finance Satisfaction Study, released today, rising interest rates, slowing lending and leasing volumes and increased competition are causing lenders automobiles to realize that their most valuable future customers are the ones they already have.

The report from Troy-based JD Power shows that customer loyalty has become a focal point for auto loan providers, highlighting specific actions lenders can take to increase loyalty and brand promotion. .

“Consumers have more loan choices than ever before,” said Patrick Roosenberg, director of automotive financial intelligence at JD Power. “They do more research and do that research earlier in the vehicle buying process. This is why the customer experience they have with their current lender is so important. For lenders who want to retain their existing customers, it is essential to anticipate and constantly respond to their needs at key points in the customer journey. »

Here are the key findings from the 2022 study:

  • Captive lenders significantly outperform non-captives in customer advocacy: For the second year in a row, automotive captive lenders significantly outperform non-captive lenders in brand promotion to existing customers. The average Net Promoter Score (NPS) for captive lenders is 56 and the average NPS for non-captives is 40. [on a 0-10 scale]) are nearly twice as likely to say they will “definitely” consider their current lender for their next vehicle compared to customers who are passive (those who say their likelihood of recommending their current lender is 7 or 8).
  • Most car finance searches start a month before a purchase: Among car loan customers who research financing options before a purchase, most start the search process more than 30 days before buying or leasing a car. a vehicle. Effective use of both requested and unsolicited pre-approvals can lead to higher customer retrieval and win-over opportunities.
  • Key actions to drive brand promotion: Specific actions taken by auto lenders that have the most positive effect on customer advocacy include easy-to-use websites, helpful account review information, and easy to set up electronic statements.

Ranking of studies

Capital One Auto Finance ranks first 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 first among mass-market brands for the second year in a row, with a score of 877. Southeast Toyota Finance (874) ranks second, while Capital One Auto Finance (870) and Honda Financial Services ( 870) each tied for third. .

To view leaderboards for each segment, Click here.

The US Consumer Finance Satisfaction Study measures overall customer satisfaction with auto finance across 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 have financed a new or used vehicle with a loan or lease over the past three years.

For more information on the US Consumer Finance Satisfaction Study, Click here.

JD Power is a global leader in consumer insights, advisory services, data and analytics. A pioneer in using big data, artificial intelligence and algorithmic modeling capabilities to understand consumer behavior, JD Power has been providing industry insights into customer interactions with brands and products for over 50 years.

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