According to J.D. Power and Associates, consumer satisfaction with initial automotive financing increased two percent this year, due in large part to consumer perceptions that they got the infamous "good deal." Power’s 2002 Consumer Financing Satisfaction Study (SM) released at the end of September, reports satisfaction increased year-over-year for loan and lease consumer across all provider segments: banks, credit unions, independent finance companies and captive finance providers. The 2002 Consumer Financing Satisfaction Survey is based on 39,315 responses from consumers who purchased or leased a new vehicle in 2002. Financial providers are graded on new-vehicle initial financing, end-of-term financing, leasing satisfaction on a consumer’s prior vehicles, and contact with a provider’s service center.

J.D. Power measures overall consumer satisfaction in four areas: how well a loan or lease is set up; the person who handles the finance processing and where it occurs; timeliness and accuracy of billing; and, the perception of receiving a "fair deal." The study for 2002 separates luxury vehicle consumers from non-luxury vehicle consumers. Power believes luxury vehicle buyers have different needs and priorities when financing an automobile, therefore, the results are analyzed separately.

Luxury vehicle loan and lease consumers appear to be "much more satisfied" than non-luxury loan/lease consumers, according to David McKay, senior director of auto finance for JD Power and Associates. Generally, luxury vehicle consumers are more satisfied with the finance providers, the finance set-up process, the finance and insurance manager and environment, billing and the fairness. As expected, finance providers see luxury vehicle consumers as desirable, due to higher credit ratings. Better credit ratings, along with increased competition lead to lower finance rates, making it easier for luxury buyers to have their loans and leases completed.

Overall, the study found that lease customers, of luxury and non-luxury vehicles, are less satisfied than loan consumers. Because lessors have absorbed substantial losses on their off-lease vehicles, says McKay, this has caused many banks and independent finance companies to leave the auto lease market. Those financing firms that have remained in the leasing market are generally pricing the vehicle residuals lower than before, which leads to higher monthly lease payments. This all makes leasing less attractive to consumers.

Ranking highest among financial providers in initial lease satisfaction in both luxury and non-luxury segments, according the 2002 study, is Ford Credit. USAA Federal Savings Bank ranks highest in initial loan satisfaction in the non-luxury segment, while Infiniti Financial Services ranks highest in initial loan satisfaction in the luxury segment.

Consumers rate Ford particularly high in its billing process in the non-luxury segment, and in the luxury lease segment, Ford Credit performs well in the lease setup process, the setup person and environment, and the perception of getting a "fair deal." USAA receives high marks across all four factors in the initial loan non-luxury segment, and Infiniti Financial Services receives high marks for loan setup and perceptions of a "fair deal" in the initial loan luxury segment.

Additional information on this and other JD Power and Associates studies can be found on the JD Power website at www.jdpa.com.