J.D. Power and Associates Reports: Dealer Satisfaction with Finance Lenders in Canada Improves Notably As Service and Relationship Building Become Increasingly Important

BMW Financial Services Ranks Highest in Dealer Satisfaction in the Prime Retail Credit and Retail Leasing Segments; Scotiabank Ranks Highest in the Floor Planning Segment

TORONTO, May 2 /CNW/ - 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 StudySM released today.

The study examines dealer satisfaction with finance lenders in four segments: prime retail credit; retail leasing; floor planning, and sub-prime retail credit1. 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 increased focus on service coincides with improved satisfaction with finance lenders in all four segments. Compared with 2010, dealer satisfaction in 2011 has increased as follows:

Segment 2010
Dealer Satisfaction Average
(on a 1,000-point scale)
2011
Dealer Satisfaction Average
(on a 1,000-point scale)
Difference
Prime Retail Credit 771 841 +70
Sub-Prime Retail Credit 681 766 +85
Retail Leasing 734 805 +71
Floor Planning 791 851 +60

Prime Retail Credit Segment Rankings

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 and performs particularly well in the application/approval process factor. Mercedes-Benz Financial Services follows in the ranking 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.

Retail Leasing Segment Rankings

BMW Financial Services ranks highest in dealer satisfaction with retail leasing with a score of 899 and performs particularly well in two of four factors: application/approval process and sales representative relationship. Mercedes-Benz Financial Services follows BMW Financial Services closely in the rankings (898) and performs particularly well in the sales representative relationship factor. VW Credit Canada (835) ranks third in the segment.

Floor Planning Segment Rankings

Scotiabank ranks highest in dealer satisfaction with floor planning, achieving a score of 888 and performs particularly well in three of four factors: finance provider credit line offering, floor plan portfolio management and floor plan support. Following Scotiabank in the floor planning rankings are Ford Credit Canada (872) and Honda Financial Services (858). Ford Credit Canada performs particularly well in the sales representative relationship factor.

"We have found that lenders who focus on providing dealerships with high levels of satisfaction are likely to benefit from enhanced future business," said Paul A. Cuevas, director of global automotive finance at J.D. Power and Associates. "For example, in the prime retail credit segment, 67 percent of dealerships with the highest levels of satisfaction—averaging 901 or higher—indicate they definitely will increase the volume of business with their lender during the next 12 months. In comparison, only 8 percent of dealers with the lowest levels of satisfaction—with scores averaging 700 or less—say the same."

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.

Prime Retail Credit Segment    
Dealer Satisfaction Index Ranking    J.D. Power.com Power Circle Ratings
(Based on a 1,000-point scale)    For Dealers
BMW Financial Services  921  5
Mercedes-Benz Financial Services  919  5
     
Bank of Montreal  880  4
Honda Financial Services  863  4
VW Credit Canada  863  4
Ford Credit Canada  855  4
     
Scotiabank  853  3
Prime Retail Credit Segment Average  841  3
Desjardins/Caisse Populaire  834  3
Toyota Financial Services  828  3
RBC Royal Bank  826  3
TD Financing Services  824  3
     
Ally Credit Canada  791  2

NOTE: Nissan Canada Finance is included in the study but not ranked due to small sample size.

Retail Leasing Segment

Dealer Satisfaction Index Ranking    J.D. Power.com Power Circle Ratings
(Based on a 1,000-point scale)    For Dealers
BMW Financial Services  899  5
Mercedes-Benz Financial Services  898  5
     
VW Credit Canada  835  4
     
Ford Credit Canada  825  3
Honda Financial Services  820  3
Retail Leasing Segment Average  805  3
Toyota Financial Services  804  3
     
Nissan Canada Finance  741  2
FinanciaLinx  666  2

Floor Planning Segment

Dealer Satisfaction Index Ranking    J.D. Power.com Power Circle Ratings
(Based on a 1,000-point scale)    For Dealers
Scotiabank  888  5
     
Ford Credit Canada  872  4
     
Honda Financial Services  858  3
Floor Planning Segment Average  851  3
Bank of Montreal  845  3
     
RBC Royal Bank  814  2
Ally Credit Canada  803  2

Included in the study but not ranked due to small sample size are: CIBC, Toyota Financial Services and VW Credit.

Power Circle Ratings Legend:
5 - Among the best
4 - Better than most
3 - About average
2 - The rest

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company providing forecasting, performance improvement, social media and customer satisfaction insights and solutions.  The company's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies is a leading global financial information and education company that helps professionals and students succeed in the Knowledge Economy.  Leading brands include Standard & Poor's, McGraw-Hill Education, Platts energy information services and J.D. Power and Associates.  The Corporation has approximately 21,000 employees with more than 280 offices in 40 countries.  Sales in 2010 were $6.2 billion. Additional information is available at http://www.mcgraw-hill.com.

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com/corporate

1 No awards are presented in the sub-prime retail credit segment due to insufficient market representation.

SOURCE J.D. Power and Associates

For further information:

Media Relations Contacts:
Katie Gates; Cohn & Wolfe; Toronto, Ontario; (647) 259-3292; katie.gates@cohnwolfe.ca
John Tews; J.D. Power and Associates; Troy, Mich.; (248) 312-4119; media.relations@jdpa.com

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