Financing Grows in Digital Space

By Staff Writer November 16, 2020

More vehicle buyers than ever have turned to digital channels when it comes to pre-transaction research and lining up financing options for a new vehicle, according to the J.D. Power 2020 U.S. Consumer Financing Satisfaction Study.

A growing percentage are securing direct financing prior to their purchase. While some of this behavior has been driven by the COVID-19 pandemic, an increasing number of buyers say they prefer a digital loan origination process for their next vehicle purchase.

The study rankings show Lincoln Automotive Financial Services ranks highest in customer satisfaction among luxury brands, with a score of 899. Capital One Auto Finance (885) ranks second and BMW Financial Services (881) ranks third.

BB&T, now Truist, ranks highest among mass market brands, with a score of 879. Capital One Auto Finance (870) and Ford Credit (870) are tied for second.

The study found nearly one-third (32 percent) of auto loan borrowers completed a digital credit application, with 22 percent using the lender’s website and 10 percent using a mobile app. The frequency of digital loan applications has increased eight percentage points from last year. The average customer satisfaction score for those applying for an auto loan digitally is 887 (on a 1,000-point scale), while the average customer satisfaction score for those applying at a dealership is 842.

A total of 40 percent of borrowers say they prefer at least part of the loan origination process to be digital when they purchase their next vehicle.

While 85 percent of auto loan customers still secure their financing through the dealership, more borrowers than ever are pursuing direct financing. A total of 15 percent of borrowers in this year’s study secured direct financing, up three percentage points from a year ago. In the luxury segment, that number is up six percentage points to 26 percent of all borrowers.

Customers have the highest levels of overall satisfaction (884) when using a lender’s mobile app.

 

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Last modified on Friday, 20 November 2020 13:21