GMAC is now Ally. For car buyers getting auto loans at their dealership, the paper their loan is written on will have a different name on it. While some dealers, particularly those in the GM network, may miss the "GM" part of "GMAC", consumers really just want the best interest rate and loan terms they can get. There's probably not a big affinity to the bank underwriting the loan, per se. I'm curious if there really is much brand equity with a captive finance company.
This last point makes me think about something our OEM customers try to figure out: what degree of customer retention does their brand get by securing repeat sales to the captive finance company? In other words, does having another sale "funded" by BMW Financial Services or Nissan Motor Acceptance Corporation really help overall loyalty to BMW or Nissan? The dilemma with this is assuming the auto buyer walks into a dealership seeking a loan with that specific captive finance organization. Which isn't the case. You and I know that we want the product at the best deal/price we can get. Let the dealer worry about (in most cases) who they use to help me secure a loan. Unless I already did the legwork and secured my loan at my personal bank or credit union, I don't really care who underwrites the auto loan.
So instead of asking whether there is "captive or non-captive finance loyalty," a better question is "do aspects of my financing process and the interactions that finance organizations have with the end-consumer help my brand?" Have you heard of the stories of unpleasant suprises when someone turns in a leased vehicle only to be shocked at the fees they get for unknown "damages"? Or the finance company continues to call the customer for payment after the vehicle was turned in months ago when the lease expired. THESE situations matter more to the consumer and THESE types of issues will erode customer loyalty.
GMAC...Ally...Bank of Joe...won't matter to the general auto buyer. Make the experience strong, relevant and ensure the customer feels they get the best deal possible.
Posted by Lonnie Miller, Vice President, Marketing & Industry Analysis, Polk (07.15.2010)
This last point makes me think about something our OEM customers try to figure out: what degree of customer retention does their brand get by securing repeat sales to the captive finance company? In other words, does having another sale "funded" by BMW Financial Services or Nissan Motor Acceptance Corporation really help overall loyalty to BMW or Nissan? The dilemma with this is assuming the auto buyer walks into a dealership seeking a loan with that specific captive finance organization. Which isn't the case. You and I know that we want the product at the best deal/price we can get. Let the dealer worry about (in most cases) who they use to help me secure a loan. Unless I already did the legwork and secured my loan at my personal bank or credit union, I don't really care who underwrites the auto loan.
So instead of asking whether there is "captive or non-captive finance loyalty," a better question is "do aspects of my financing process and the interactions that finance organizations have with the end-consumer help my brand?" Have you heard of the stories of unpleasant suprises when someone turns in a leased vehicle only to be shocked at the fees they get for unknown "damages"? Or the finance company continues to call the customer for payment after the vehicle was turned in months ago when the lease expired. THESE situations matter more to the consumer and THESE types of issues will erode customer loyalty.
GMAC...Ally...Bank of Joe...won't matter to the general auto buyer. Make the experience strong, relevant and ensure the customer feels they get the best deal possible.
Posted by Lonnie Miller, Vice President, Marketing & Industry Analysis, Polk (07.15.2010)
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