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Study CUs gained majority of auto customers who refinanced
WESTLAKE VILLAGE, Calif. (12/13/07)--Credit unions acquired the majority of consumers who refinanced their initial vehicle contracts in 2007, according to J.D. Power and Associates 2007 Consumer Financing Satisfaction Survey, released Tuesday. Credit unions gained 51% of "captive" customers and 58% of banking customers who refinanced, said the firm. In 2007, roughly 2% of new-vehicle financing customers refinanced their indirect loan, resulting in $4 billion in originations. The most common reason for refinancing--provided by 83% of refinancing customers surveyed--is to find a more competitive interest rate. The survey, in its 12th year, measures customer satisfaction with new-vehicle financing process on four factors: provider offering, application/approval process, payment/billing process, and customer contact experience. BMW Financial Services, Ford Credit, Honda Financial Services and Lexus Financial Services each ranked highest in satisfying customers with certain aspects of the new-vehicle financing process. Credit unions were not among institutions ranked in the survey. The percentage of consumers using the Internet to research finance options has declined since 2004. However, among consumers using the Internet for research, those who submitted an online application increased. According to Richard Howse, director of the automotive finance practice at J.D. Power, "Fewer casual shoppers are using the Internet simply to browse for information about their financing options. Instead, more serious and Internet-savvy customers are using this channel to access specific information about their finance options and then proceeding to apply online for a loan." He noted the trend suggests that "customers are feeling more comfortable with sharing their personal information online via these provider channels and may also prefer the convenience aspects that the Internet brings."
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