Mercedes-Benz and BMW not only are the luxury-vehicle sales leaders in the U.S., their vehicle-financing units also take top honors in a study on how dealers rate lenders.

Mercedes-Benz Financial Services ranks highest among lenders in the prime retail credit segment for a second consecutive year, with a score of 961, according to the J.D. Power 2016 U.S. Dealer Financing Satisfaction Study 

Mercedes is followed by BMW Financial Services (959); Alphera Financial Services (941); Lincoln Automotive Financial Services (936); and Infiniti Financial Services (930).

Mercedes Financial ranks highest (982) among lenders in the retail leasing segment for a second consecutive year, followed by BMW Financial, Ford Credit (913), Volvo Car Financial Services (912); and Subaru Motors Finance (911).

In floor-planning satisfaction, Mercedes-Benz Financial ranks highest (986) for a sixth consecutive year, with a score of 986. That’s followed by BMW Financial (975), Huntington National Bank (969); Hyundai Motor Finance (945) and Kia Motors Finance (945).

The 2016 U.S. Dealer Financing Satisfaction Study captures more than 20,000. These evaluations were provided by 3,100 new-vehicle dealerships.

Speed of a loan or lease approval remains critical, but there are other factors related to how dealers feel about lenders.

“Speed has been king and the area lenders have traditionally focused on, but as the market gets tougher, lenders need to center their attention on their relationships with dealers, or they are going to lose business,” says Jim Houston, senior director- automotive finance practice at J.D. Power.

“Lenders need to move beyond a transactional relationship with dealers to a richer consultative partnership. Lenders with a dealer-centric culture across their organization – not just in various pockets of the business – are the ones that are most likely to excel.”

Ironically, when the credit freeze hit in 2008 and 2009, roles were reversed: Dealers were advised on how to endear themselves to lenders who had become  fussy about what financing requests to approve. Subprime customers need not have applied.

Since then, credit has become more accessible, and it is the lenders who now competitively solicit dealer business. In a survey at this year’s American Financial Services Assn.’s vehicle financing conference, more than half of attendees said they expected to do more dealer-assisted loans compared to last year.         

The J.D. Power study finds that fewer than half of dealers receive consistent sales rep calls or visits, both of which can boost overall satisfaction by as much as 68 points and 75 points, respectively, on a 1,000-point scale.

The nature of the contact counts too, Houston says. “Dealers value a lender that can help them handle the tough issues and solve those ‘outside-the-box’ situations.”

The study identifies three areas of opportunity for lenders that will help them enhance their dealer relationships:

  • Consistent performance among dealer relationship managers.
  • Identification of their best dealers and a prioritization of those relationships.
  • Efforts that focus on areas most important to dealers.

“These are the things dealers say they want from their lenders, but are not necessarily getting on a consistent basis,” says Houston. “When the market gets tough, lenders that meet dealer expectations are going to get a greater share of the business.”

Falloff is swift when satisfaction declines: When satisfaction scores are 900 points or higher, 62% of dealers say they are likely to increase the amount of business they send to the lender over the next year.

When satisfaction falls to between 800 and 889, only 37% of dealers indicate they intend to do that. When satisfaction dips to 700-799, only 22% of dealers intend to increase business with that lender.

sfinlay@wardsauto.com