According to the J.D. Power 2016 Canadian Dealer Financing Satisfaction Study, Canadian auto dealers are now more than ever bridging the relationship between themselves and finance providers. Instead of relying on the finance companies to simply provide financial services, the new-vehicle dealers in Canada are seeking consultative advice as well.
“Dealers are seeing a partnership that’s helping them sell, make payments affordable to consumers, and give the dealers a profit opportunity. Dealers are really focused on a great consumer experience at the dealership. The lenders by and large have focused on faster credit decisions, so the dealer can get the approval to the consumer and deliver much quicker,” said Mike Buckingham, Senior Director of the Automotive Finance Practice at J.D. Power in an interview with Canadian auto dealer.
According to data collected by the Power Information Network (PIN) from J.D. Power, the average loan terms from bank lenders grew from 69 months to 78 months. The average amount a customer finances a vehicle also went up from $27,566 in 2010 to $37,794 in 2016, found J.D. Power.
“We see from our data from the new vehicle side, a close to 80 per cent of the retail sales have a financing relationship between the dealer and automobile lenders.The lenders have done a great job in supporting dealer sales,” said Buckingham.
According to the study by PIN, lenders who fund error-free contracts on same day submission notice a 72 point satisfaction level. Automatically approved applications see a 75 point increase in satisfaction.
“Consumers can buy a car at a very attractive rate with low financing. They’re able to get pricing at the wholesale level. The dealer has been able to bring better financing for the consumer then they could get on their own, said Buckingham. “Working with sophisticated dealers in their process makes it much more efficient,” he added.
BMW Financial Services ranked the highest in prime retail credit at 971, followed by Mercedes-Benz Financial Services at (922), and in third, Ford Credit Canada at (918).
