J.D. Power recently published the J.D. Power 2021 Canada Dealer Financing Satisfaction Study. I sat down with Canadian Auto Dealer to discuss the key findings from the recently.
Here's an excerpt:
Automotive lenders need to adapt to a changing landscape in which new vehicle sales and dealerships in Canada continue to quickly shift their game online, according to a new report from J.D. Power.
The recently released J.D. Power 2021 Canada Dealer Financing Satisfaction Study found that 49% of Canadian dealerships experienced an increase in online sales during the past year, and 41% expect at least one-fifth of their sales to be digital in the next year.
“The dealers needed to make sure that they had a well-developed channel that customers can go on to their websites, or credit application, and get approved for a loan or lease to be able to get their car,” said Patrick Roosenberg, Director of Automotive Finance at J.D. Power, in an interview with Canadian auto dealer.
He said the same situation was visible in the United States in 2020, as consumers demonstrated a greater interest in transacting digitally.
Lenders can improve on meeting dealer needs by building and launching digital platforms and channels to streamline and help grow business opportunities. The goal would be to enable the process from origination to funding — and be supported by the sales reps and credit analysts.
“There’s a lot of opportunity to capture customers who are out there researching prior to even visiting the dealership,” said Roosenberg, adding that a lender who “effectively responds to this shift by developing and offering a digital solution is poised for future success.”
However, less than one-third of lenders took action on initiatives like increased availability and support from sales reps and credit analysts that drive greater dealer satisfaction. Dealers in the study indicated that 33% of non-captives and only 15% of captives provided online/digital credit application support/training during the pandemic.
The study points to the importance of sales representatives in helping to cultivate lenders’ digital business opportunities, as dealers look to their reps to provide sales and technology training. But less than 50% of sales reps surpass dealer expectations on what J.D. Power considers to be a key performance indicator.
The company said sales reps and credit analysts “need to become subject-matter experts” to take advantage of these opportunities.
Asked why lenders appear sluggish in this area, Roosenberg said lenders were able to provide support in a number of ways that drove higher levels of satisfaction with dealers, such as increasing availability support from sales reps through calls and emails. That was the main thing they did during COVID that drove the highest level of dealer satisfaction, according to Roosenberg — they provided open and consistent communication, and increased availability around support from credit analysts.
“But if we look specifically at the numbers provided for online digital credit application support and training, the 33% and 15% mentioned earlier, the captives did a better job on that aspect than the non captives in providing online, digital credit application support and training,” said Roosenberg.
“Whatever digital platforms lenders have, if any at all, they have to make sure that the dealers are well-trained on how to capture that customer,” said Roosenberg.
Read the full article and see the rank charts here.
See below for more coverage of the study findings. Learn more about Canada Dealer Financing Satisfaction Study here.
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