The market-chilling effect of low inventory and higher prices has nonetheless led to warmer feelings towards lenders by auto dealers, says J.D. Power’s newest report. “Dealers really have their pick of lenders to choose from,” says Patrick Roosenberg, director of automotive finance intelligence at J.D. Power, in an interview with Canadian auto dealer on Thursday. “With these low numbers of transactions, lenders are really going to have to step up and prove to dealers why they deserve the lion’s share of their financing business.”
This decrease in transactions has led to higher rates of dealer satisfaction, according to the survey released on Thursday, likely due to the fact that being less busy gives lenders more time for customer service. Says Roosenberg, “This rising rate, inflationary environment isn’t great for the consumer, but this does give dealers more competition for those deals that are happening. Lenders are going to give the highest level of service possible to dealers to capture that business.”
According to the study, “Dealers are looking for a seamless, speedy interaction with a lender, and lenders need to be laser-focused on satisfying that need—especially when the volume of transactions is reduced.” Even with increased automation in the approval and funding processes, lenders must find a way to differentiate themselves from other lenders, whether it’s system-related or actions taken by funding, retail credit or sales reps.
On-site visits are also becoming increasingly unnecessary for lenders to build relationships. The study shows that just four per cent of dealers say on-site visits are their preferred method of contact with their sales rep and may not lead to additional opportunities. Says Roosenberg, “With dealer preference shifting towards phone, email and text interactions—and away from onsite visits—sales reps need to know which channel a dealer prefers to be more effective in a hyper-competitive market. In other words, the right message through the right channel at the right time.”