Customer satisfaction with new vehicles rebounds from 2015 – survey


As if strong sales figures weren’t enough …

Customer satisfaction, which “plummeted” last year because of record vehicle recalls, rebounded in the first two quarters of 2016, according to a survey on the automotive industry.

A survey of nearly 4,000 new-car owners showed gains for 16 of 24 brands tracked by the American Customer Satisfaction Index (ACSI), while only five declined. Overall, satisfaction with automobiles and other light vehicles gained almost 4 percent to 82 on the ACSI’s 100-point scale.

“Now automobiles are the pacesetters for customer satisfaction among 43 ACSI industries, along with the typically high performing television and video player industry,” the company reported.

While surveyed drivers said the quality of mass-market cars has improved, lower gas prices and increased incentives also contributed to satisfaction. As you might expect, customer satisfaction among drivers who had a recalled vehicle was significantly lower than those who had no recall, said ACSI.

‘Pleasing to consumers’

The top 10 brands among all automobiles and light vehicles scored above the industry average of 82 points, led by Lincoln, a Ford Motor Company product, with 87 points, followed by Honda (86); BMW and Toyota (85); GMC, Infiniti, Lexus and Subaru (84), and Audi and Chevrolet (83). Honda, Toyota, GMC, Subaru and Chevrolet are considered mass-market brands and the others luxury brands.

“Most aspects of the driver experience are very pleasing to consumers, reflecting an American affinity for automobiles,” according to ACSI. “The top grades for autos (overall) relate to performance, dependability, safety and exterior design, and are identical for both luxury plates and mass-market brands. Drivers are the least satisfied with the gas mileage of their vehicles.”

Among 10 benchmarks used in the survey, mass-market and luxury vehicles finished even on five, and luxury vehicles led by only one point on two other benchmarks.

Mass-market vs. luxury

“Consumers choosing luxury vehicles give better ratings for comfort, interior quality and technology features such as audio, navigation or video systems than those driving mass-market cars, but the difference is slight,” the company reported on its website.

“With less-expensive cars nearly matching the look, feel, handling and comfort of top-dollar brands, the luxury segment may not be giving consumers as much as they would desire for the higher price.”

“The rise of mass-market vehicles may well be at the expense of luxury brands in the sense that buyers now see little differentiation between luxury cars and regular ones,” said Claes Fornell of ACSI. “If there is little difference, why pay more? Exclusivity may not be enough.”

The data has proven to be strongly related to several key indicators of economic performance, ACSI said.

“For example, firms with higher levels of customer satisfaction tend to have higher earnings and stock returns relative to competitors,” ACSI said in its report on the survey. “[And] customer satisfaction has been shown to be predictive of both consumer spending and GDP growth.”

The power of the Rehash Tool

When you think of the word “rehash,” repeating the same old thing usually comes to mind. When it comes to Santander Consumer USA’s Rehash Tool, it’s the best way to breathe new life into your deals.

Say, for instance, you need to update some information on an application for financing that best meets your customer’s needs. Maybe your customer needs a different vehicle for a smaller monthly car payment, or they didn’t factor in their bonus as a source of additional income.

While our credit buyers are always standing by, ready to help, the Rehash Tool on our Dealer Extranet lets you revise information quickly and easily.

Have an after-hours deal on the table? Don’t worry, the Rehash Tool lets you plug in the new information any time, day or night. The power to close the deal is at your fingertips. Let the Rehash Tool equip you to accomplish your goals.

Mystery shoppers, The Box, temptation and opportunity


Mysterious shoppers

Premium car dealerships provide a premium experience to prospective customers – at least in a new “mystery shopper” study.

Three of the top four automotive brands among the 33 comprising the 2016 Pied Piper Prospect Satisfaction Index (PSI) U.S. Auto Industry Benchmarking Study were premium brands, while four additional premium brands finished within the top 10 in points. Overall, 16 brands scored at or above the industry average of 103 points, while 17 scored below it.

The top-scorers were Nissan’s luxury brand, Infiniti, with 114 points, 11 better than the industry average, followed by Toyota’s luxury brand, Lexus, and Mercedes-Benz, 112 each, and Toyota at 109.

The study measures treatment of car shoppers who visited 6,157 dealerships across the United States, according to Pied Piper, with mystery-shopper measurements and scoring related to sales success.


Outside The Box

The Box is going the way of the dodo.

That’s the impression you could get from headlines such as Plan ahead the Box is dead and The elimination of F&I and Is the F&I manager an endangered species? At least, the Box is going through an evolution – if not a revolution – some recent articles contend.

“There is no question that an evolution is brewing,” wrote Candice Crane in Dealer Solutions magazine. “Early adopters are examining ways to create a new and efficient buying process. One concept gaining momentum is to eliminate the traditional F&I process.”

Automotive News Access F&I offers a similar perspective on the subject: “Although experts are divided over whether finance and insurance managers will become extinct, they agree the F&I process is evolving, pressured by consumers’ preference for an interactive experience.”


Reducing temptation

Most employees are trustworthy, but it only takes one to wreak havoc on your business.

“Dealers who become victims of employee fraud tend to place unrestricted trust in those they shouldn’t,” wrote John Buelow, dealerships principal at Clifton Larson Allen consulting firm, in Reducing Risk: Top 10 Best Practices for Preventing Internal Fraud in Dealerships.

Victims shared four distinct preventive shortcomings, according to Buelow:

  • They were caught off guard.
  • Part-time or absentee owners, especially, often trusted their employees completely.
  • They either did not have internal controls or their controls were not followed consistently.
  • The perpetrator was caught by chance, not through systematic fraud controls.

“I’m not suggesting that you place suspicion on each of your dealership’s employees or categorically regard people as crooks,” Buelow wrote. “But unless you recognize that internal theft is a risk inherent in every business and take measures to keep it from happening, you leave yourself vulnerable.”


Window of opportunity

Are you plugged into the needs of your older customers?

Introduction of new vehicle technologies provides dealerships several opportunities to influence customers 55 and older that they may not have as often with younger customers.

And the differences can be significant, reported a Massachusetts Institute of Technology white paper, Autonomous Vehicles, Trust and Driving Alternatives: A survey of consumer preferences, which was based on a survey of 3,034 drivers in seven age groups.

The bottom line for dealerships: Older customers prefer interacting with dealer staff – either during the sales process and/or at vehicle delivery – using the vehicle owner’s manual or studying other material provided by their vehicle’s manufacturer to figure out new technology.


Yes! We can help your dealership bring the big picture into focus


Look at the big picture.

You want to work with a lender that has the programs, platforms and systems in place to meet your customers’ financing needs and the people with whom you can build a long-term working relationship.

The bottom line – our bottom line – is providing your dealership the wherewithal to make more deals. Here’s what a finance director of one dealership said about working with Santander Consumer USA (SC):

“Santander has been a great financing partner of our dealership for quite some time now. We would not be able to sell as many cars as we do without their unique brand of auto finance. While other lenders give you turndowns, Santander always gives you a way to go.”

And here are some reasons you should consider working with Santander Consumer USA:

The big picture

  • Finance programs that cover the full spectrum of credit
  • Strong operating platforms in originations, funding and servicing
  • Executive management with decades of direct dealership experience
  • Incomparable financial backing with billions in assets

Multi-tiered underwriting

  • Consistent approach to deal structuring
  • Every application is processed by our proprietary, risk-based scoring and pricing model
  • Simplified “one stop” approach offering multi-tier programs

Dealer-friendly underwriting

  • Automatic approvals possible with 24/7 decisioning via the Extranet
  • 48- to 72-hour purchasing for clean deal packages
  • Communication with a dedicated buyer and complete deal structuring

Sales & marketing support

  • Lead-generation programs such as direct mail and RoadLoans
  • Dedicated field sales representatives and hands-on problem resolution
  • Expert program education for dealership personnel (F&I, sales and accounting)

Funding support

  • Assistance in gathering stipulations
  • Online tools such as the Dealer Extranet to rehash/review status of deals
  • Electronic funds transfer

SC has relationships with most of the 18,000 franchise dealers in the United States and two decades of experience in auto lending across the full credit spectrum.

That means our area, regional and inside sales teams, along with experienced buyers, are ready to answer your questions about working with SC and to help you navigate the process in any way they can.

Of course, you need to be part of our franchise dealer network, which you can accomplish easily by requesting a visit from a representative who will contact you promptly. As soon as we have confirmed that your application has been accepted, you can start submitting contracts to us.

It’s when the big picture really comes into focus.

Learning the secret to fast funding with Santander Consumer USA

When it’s time to fund a deal, the last thing you want it to take is more time.

One of the more frequent consumer complaints about purchasing a vehicle is the time it takes to complete the process.

In this instance, time is not your friend.

Santander Consumer USA (SC) understands the importance of fast funding. A quick turnaround could mean the difference in keeping or losing a customer.

With other lenders, it could take up to a couple of days to fund your deal. Santander works to fund every deal within 24 hours. With a complete funding packet and all of the necessary paperwork, you could find yourself on the right side of time.

Here’s what you need to know about funding a deal quickly with Santander.

Santander can help boost your run through the rest of the 2016 campaign

Billy Burleson, area sales manager for Santander Consumer USA, works with Denise Roland, finance director at Mac Churchill Auto Mall.

Billy Burleson, area sales manager for Santander Consumer USA, works with Denise Roland, finance director at Mac Churchill Auto Mall.

We’re in the home stretch.

With just about two months left until the election – and less than four until the end of the year – dealers are scrambling for sales like political candidates scrambling for votes.

Every one matters when it’s time to take the final tally to decide who the winners are in 2016.

Even if year-over-year sales are flat the rest of 2016, it’ll be another record (or near-record) year, based on data compiled by the U.S. Bureau of Economic Analysis.

Like the presidential candidates, it helps dealers to have a great running mate such as Santander Consumer USA when it’s time to close the deal. And nobody on your campaign will work harder than SC’s sales team to support a successful run at the top prize through Election Day and beyond.

“The ASMs are always available and willing to help, and the buyers work to help close deals,” one dealer said recently. “And Santander gives fast approvals [which] is key when trying to work a deal.”


Why your dealership should consider direct mail marketing – studies

Proof of direct-mail program’s impact is in the numbers

And in the mold of great campaign staffers, the SC sales team keeps dealers’ goals front and center.

“My everyday focus is to give my dealers the solutions they need while holding fast to the business model that has made Santander so successful,” said Diane Owen, senior area sales manager.

ASMs are out front for SC, answering questions when you’re trying to close a deal, assisting in structuring a deal or advising on direct mail. Their knowledge, training and experience can help guide you through the toughest of deals with fewer mistakes and faster funding.

Combined, Santander, RoadLoans and inside sales have about 230 specialists to take care of your indirect and direct financing requirements.

“Our unique ability to furrow out the specific needs of each dealer gives us the power to find real-world business solutions,” said Eleni Egoville, SC regional sales manager. “That ability will continue to drive our goal of doing as many deals with as many dealers as possible.”

Find out for yourself that these are not just campaign promises by contacting your area sales manager or our sales department and let Santander Consumer USA boost your stretch run.

Are your customers driving around with uncorrected recall issues?

It’s not a good idea for your customers to gamble with their safety.

But that’s what millions of American drivers are doing right now by failing to heed recall notices, endangering themselves, their passengers and/or other road users.

More than 45 million vehicles subject to safety recalls issued between 2013 and 2015 – almost two in 10 vehicles currently on U.S. roads – have not been repaired, according to J.D. Power (JDP), which analyzed data from the National Highway Traffic Safety Administration (NHTSA). More than 100 million cars, trucks and SUVs were recalled during that three-year period.

083116 IL Are Your Customers Driving Around with Uncorrected Recall Issues

“During the past 20 years, more than 428 million vehicles have been affected by safety recall decisions in the United States, with more than 51 million vehicles impacted in 2015 alone, more than in any previous year,” said Renee Stephens, vice president of U.S. automotive at JDP.

“The steady surge in recalls, combined with NHTSA’s goal of 100 percent recall completion rates has made the number of un-remedied recalls still on the road a critical statistic for automakers and dealers.”

JDP found that:

  • Newer vehicles are more likely than older models to be repaired, with the total recall completion rate for vehicles from model years 2013-17 around is 73 percent, compared with a rate of just 44 percent for vehicles manufactured from 2003-07.
  • The type of vehicle influences the repair rate, with large work vans having the highest overall rate of 86 percent, followed by compact premium SUVs at 85 percent. Those are considerably higher than rates in the mid-premium sports car segment and among large SUVs, with recall completion rates of 31 percent and 33 percent, respectively.
  • The larger the recall, the greater the chances affected vehicles won’t get needed repairs. The completion rate for recalls affecting more than one million vehicles is 49 percent, while rate for recalls affecting fewer than 10,000 vehicles is 67 percent.
  • Some major safety components are more likely to be repaired, such as powertrain (71 percent), electrical system (62 percent) and hydraulic brakes (66 percent), while airbags and suspension issues have the lowest completion rates at 47 percent and 48 percent, respectively.

“By understanding the behavioral trends of vehicle owners, as well as recall completion rates among different vehicle and recall types, as an industry we can better tailor communications to improve those completion rates,” said Stephens. “This is a critical level of intelligence for the industry, which we believe will ultimately help reduce the number of un-remedied vehicles on the road.”

JDP released the findings analyzed with its SafetyIQ program, which integrates NHTSA data with the company’s automotive data, searchable by vehicle make, model, year, age and component.

Need help? Your ASM is ready.

Some deals are easier to maneuver than others. You get the perfect buyer with good credit, and you have the perfect vehicle to meet their needs. Done deal!

But every once and while, there are the deals that need a little more man or woman power to make something happen.

Look no further! Santander Consumer USA’s team of area sales managers is on the job and ready to give our deals the push they need.

Sometimes, the challenge is in structuring the best deal. Other times, it can be providing the correct paperwork necessary for funding. Either way, your ASM is the person to call when roadblocks hinder the path to a closed sale.

Your ASM has the knowledge and the training to guide you through the hard deals. The right coaching can lead to faster funding, expand your earning potential, and make life a whole lot easier.

Go ahead … make the call.

Costs of fuel economy could produce ‘dramatic effect’ on dealers

Automakers and other industry insiders are sounding an alarm over the “dramatic effect” of increasing fuel economy requirements on new-car sales.

One group, the National Auto Dealers Association (NADA), argues that rising standards will hurt consumers along with the industry by raising prices beyond Americans’ ability to pay for new vehicles.

082416 IL Costs of Fuel Economy Could Produce 'Dramatic Effect' on Dealers

The warnings come as the mid-September deadline nears for official comments on a federal government report that 2025 fuel-economy targets are about right as they stand.

The report also said automakers would fall short of the fleet-wide target of 54.5 mpg by up to 4.5 mpg.

“The drastic upswing of the miles-per-gallon compliance curve from now until 2025 is going to have a dramatic effect on vehicle prices – and not just the most fuel-efficient vehicles in the fleet, but up and down the entire lineup,” Wes Lutz, NADA regulatory affairs chairman, said recently.

“Every car, every truck, every SUV could soon be $5,000 more expensive than it is today,” said Lutz, who also is president of Extreme Chrysler/Dodge/Jeep, RAM Inc. in Jackson, MI. “On an average 60-month contract, $5,000 increases the monthly payment approximately $100.”

(The average monthly car payment runs about $500, based on data from Experian Automotive.)

Spending maxed out?

“Americans are maxed out, and can barely afford new cars as is,” Lutz said, citing a recent study by which shows that even in the most affluent of 50 U.S. cities, San Jose, CA, the median-income household falls about $1,000 short of being able to pay the average price of a light vehicle.

This reality is clearly reflected in current buyer behavior, according to Lutz:

“I’m seeing this every day at my dealership in three major ways: consumers driving their current vehicle longer; buying used vehicles, or buying a vehicle that doesn’t fit their needs.”

Lutz was quoted by the Detroit Free Press as saying that an increase of $5,000 on a new vehicle “would crush my customers … would crush me as a dealer.”

‘Daunting challenge’

Mitch Bainwol, CEO of the Alliance of Automobile Manufacturers, said it will be a “daunting challenge” to meet the 2025 fuel economy standards and that “excessive regulatory costs could impact both consumers and the employees who produce these vehicles.”

He cited a survey conducted by the AAM that showed just 7 percent of consumers would spend $5,000 more for a vehicle, while 70 percent would pay $2,000 or less.

“So the appetite to buy is really, really low,” Bainwol said, according to the newspaper.

However, federal officials believe the auto industry has made more progress than expected since 2012, demonstrating that it can make even more progress by 2025.

Chris Grundler of the Environmental Protection Agency thinks the current plan is working “spectacularly,” contending that “automakers are outperforming these standards while hitting new sales records … So, we think the industry is very well-positioned to meet the customer expectations while reaching significant new levels of environmental performance.”

We only have nine years – and about 150 million vehicles – to see which prediction is correct.

Reduce temptation, employee fraud with these 10 best practices

Most employees are trustworthy.

You know you can run your dealership without worrying about them committing fraud or theft which could cost you thousands of dollars a year.

But … it only takes one to wreak havoc on your business.

“Dealers who become victims of employee fraud tend to place unrestricted trust in those they shouldn’t,” wrote John Buelow, dealerships principal at Clifton Larson Allen consulting firm, in Reducing Risk: Top 10 Best Practices for Preventing Internal Fraud in Dealerships.


“In their belief in common decency, they fail to remove all temptation from their financial and operational protocols,” the consultant wrote. “This makes it just a little too easy and all too irresistible for less honest employees to rob them from right under their noses.”

RELATED: The everyday language of building a better business model; Steering a New Course: Watch out for signs of fraud on the road to a better business model

Victims shared four distinct preventive shortcomings, according to Buelow:

  • They were caught off guard.
  • Part-time or absentee owners, especially, often trusted their employees completely.
  • They either did not have internal controls or their controls were not followed consistently.
  • The perpetrator was caught by chance, not through systematic fraud controls.

“I’m not suggesting that you place suspicion on each of your dealership’s employees or categorically regard people as crooks,” Buelow wrote. “But unless you recognize that internal theft is a risk inherent in every business and take measures to keep it from happening, you leave yourself vulnerable.”

Following are Buelow’s 10 best practices to help prevent or uncover employee fraud:

  1. Segregation of all accounting duties, but with shared knowledge of them. One individual should not control all functions in the finance department – accounts payable and receivable, cash and bank reconciliations, receivables write-offs, customer credit card refunds, titling, etc.
  1. Monthly cash reconciliation to the penny. Train multiple people in your finance department to perform this essential duty, and change the individual who performs this task from time to time.
  1. Mandatory controller vacation. Cross-train personnel so they can cover for the controller, then require the controller’s absence on several consecutive days each year so that “other staff have to get their hands and eyes on the controller’s business.”
  1. Mail control. Personally open all invoices and payments that are sent to your business. “These should never be delivered directly to the AR and AP departments still sealed up.”
  1. Annual vendor audit. Pull a list of your vendors and corroborate each corporate name, DBA, address, owner’s name, and phone number, then call to verify the vendor’s authenticity.
  1. Journal entry and general ledger reclassification reviews. Scour the books for “financial acrobatics” and “tricky maneuvers” that might indicate fraud.
  1. CPA spot checks by bringing in “hired guns” on occasion. Engage a CPA to drop in with a day’s notice – or no notice at all – to inspect the books onsite.
  1. Parts department controls. Monitor purchasing, look for excesses and imbalances in vendor patterns, and hire an outside party to manage parts inventories. Lock parts rooms and only permit access in pairs with strict, written checkout protocols.
  1. Used and rental/loaner vehicle controls. Conduct regular spot checks of vehicles and their management protocols to ensure vehicles are physically present.
  1. Welcome and encourage whistleblowers. Assure confidentiality for employees who suspect or witness fraud by taking steps such as establishing a fraud-tip hotline.

“As a trusting business owner, it can be difficult to enforce such wary measures, but the value of these controls can’t be overstated,” Buelow wrote. “When you understand and practice the power of prevention, you may not have to suffer losses, prosecute employees, and incur other costs of fraud.”

These best practices may take you a long way toward that goal.