Volvo Financial Gets Hammered
Car companies and dealers sometimes make money selling new cars. Usually, they make money on car service. Another source of revenue is the financing of cars, either via loans or leases. Often, these car loan divisions compete with banks. According to new research, Volvo has a problem. Volvo Car Financial Services ranks behind several banks and the lending divisions of luxury brands.
The new J.D. Power 2019 U.S. Consumer Financing Satisfaction Study used five metrics to judge lending institutions: billing and payment process, mobile app experience, onboarding process, origination process, and website experience. The total possible score in the survey is 1,000. The average score for luxury brands was 856. Lexus Financial Services ranked first with a score of 867, tied with Mercedes-Benz Financial Services and Lincoln Automotive Services. Volvo ranked last among luxury car lenders, with a score of 832, the same as Bank of America.
Jim Houston, Senior Director of Automotive Finance Intelligence at J.D. Power, pointed out what is likely to be Volvo’s problem:
Auto finance customers are more educated than ever and, as a result, they have a much higher expectation for a seamless digital experience that enables them to effortlessly search for vehicle features and local inventory as well as financing options and terms. The benchmark for a good digital experience is no longer other auto finance companies; rather, it’s consumer-facing sites like Amazon and Netflix that recognize what users are looking for and deliver the right information within one or two clicks.
Volvo has tried for a comeback in the United States. The originally Swedish car company was founded in 1927. Ford took the company over in 1999 and held it until 2010. At that point, it was sold to China’s Zhejiang Geely. Despite a well-recognized brand and a reputation for quality, its sales continue to lag the European and Japanese luxury cars. That trend is not changing. What J.D. Power found won’t help.