Financial firms standing to gain the most future business with auto dealers are ones that keep them happy, beyond merely offering low interest rates and balanced risk.
That's according to a J.D. Power and Associates 2006 Dealer Financing Satisfaction Study.
It urges providers interested in high satisfaction from dealers to offer them:
- Minimal paperwork.
- Quick application processing.
- Terms that allow customers to afford the monthly payments for their new vehicles.
- Reasonable low interest rates.
- Appropriate spread between high- and low-risk customers.
Providers who do those things create dealer advocates who will continue to send business their way, according to the study.
“A common misconception is that the only way to satisfy dealers is to buy deep and cheap, but rates and spread of risk are not the only considerations that entice dealerships to send more business your way,” says David Lo, senior manager of automotive finance research at J.D. Power and Associates.
He adds: “Dealerships still want low rates and risk diversity, but they also want a seamless experience with the provider's credit desk, quick funding and a strong business relationship. When this is effectively packaged, dealerships tend to reward the provider with more business.”
The study says 42% of dealers who are “very satisfied” and 21% who are “somewhat satisfied” with a finance provider indicate that they plan to do additional prime retail credit business with that provider over the next year.
Conversely, only 10% of dealerships that have “neutral” feelings about a financial provider plan to send additional business that way.