Tuesday, April 25, 2017

Nearly Half of Malaysian Customers Don't Know What Auto Finance Deal They Entered Into - Duh!

Nearly half (43%)of Malaysia new-car buyers do not fully understand the terms of their auto finance product, according to the inaugural J.D. Power 2017 Malaysia Auto Consumer Finance Study,SM released today. In simple English, most of you guys out there don't know what the heck you just signed with the bank. You could have signed your soul away and not realise it according to JD Power. Well, that's according to me lah. Not them. But you get my point.



The study measures customer satisfaction with their automotive finance provider by examining six key factors (in order of importance): interaction; onboarding; billing & payment; finance deal; origination; and finance advisor.

“With less than half of auto finance customers claiming the finance arrangement actually met their requirements, there is a clear need for the industry to become more customer-centric,” said Anthony Chiam, practice leader of service industries at J.D. Power. “Auto finance is a long-term commitment and it’s crucial that dealership salespeople spend sufficient time to clearly explain the services, terms and fees related to each customer.”

I truly like JD POWER reports. The last one I read on after sales satisfaction was also an eye opener. This is similiar. Malaysians do not like to do research. Like when buying a car, they don't know what buttons work what. They just want it there in the car but they don't want to understand the product but complain first before actually finding out how to operate the product. So finance documentation and how much they're actually getting from their deal is secondary. 

That being said, if there was a finance advisor, things will be clearer to some. CIMB is also the top bank in terms of customer satisfaction. Of course, there aren't too many lenders these days with the consolidation of banks (there are only 8 banks that allow you to borrow money for cars). Quite sad that it is an oligopoly of sorts. But you now know which bank is better and which is not thanks to J.D.Power! 

PRESS RELEASE
Nearly Half of Malaysia Customers Don’t Understand All Elements of Their Auto Finance Deal

CIMB Bank Ranks Highest in Customer Satisfaction in Inaugural J.D. Power Consumer Finance Study

KUALA LUMPUR, Malaysia: 25 April 2017 — Nearly half (43%)of Malaysia new-car buyers do not

fully understand the terms of their auto finance product, according to the inaugural J.D. Power 2017

Malaysia Auto Consumer Finance Study, SM released today.

The study measures customer satisfaction with their automotive finance provider by examining six key

factors (in order of importance): interaction; onboarding; billing & payment; finance deal; origination;

and finance advisor.

“With less than half of auto finance customers claiming the finance arrangement actually met their

requirements, there is a clear need for the industry to become more customer-centric,” said Anthony

Chiam, practice leader of service industries at J.D. Power. “Auto finance is a long-term commitment

and it’s crucial that dealership salespeople spend sufficient time to clearly explain the services, terms

and fees related to each customer.”

Satisfaction levels during the purchasing process vary greatly between customers whose finance

application was handled by a finance advisor vs. a car salesperson. On a 1,000-point scale, a finance

advisor has an average score of 777, compared with a salesperson’s average score of 735.

Among customers who selected an Islamic auto finance product, more than 30% say they “definitely

would” use the same finance provider for their next purchase, compared with 22% among customers

who purchased a conventional auto finance product.

“Malaysia’s Islamic finance industry has been growing rapidly over the past 30 years,” Chiam said.

“Higher customer satisfaction levels from within Islamic auto financing underscore the industry’s

impressive and continuous expansion.”

The following are additional findings of the study:

 Higher satisfaction drives loyalty: With a country average of two cars per household, 55% of

customers who were delighted with their experience (overall satisfaction scores of 852 or

higher) say they “definitely would” use the same provider for their next auto finance product,

compared with only 5% of those who were dissatisfied (650 or below).

 Islamic auto finance products: Overall satisfaction is higher among customers buying such

products than among those buying conventional auto finance products (758 vs. 744,

respectively).

 Finance company vs. dealer financing: Nearly one-third (32%) of new-car buyers who

purchase a finance product directly from a finance company are more satisfied than those going

through a dealer to arrange financing (759 vs. 742, respectively).

Study Rankings

CIMB Bank ranks highest with an overall satisfaction score of 772. CIMB Bank performs highest across

all six factors.

Maybank ranks second (759), performing particularly well in the onboarding and billing & payment

factors. AM Bank ranks third (757), performing well in the finance advisor factor.

The 2017 Malaysia Auto Consumer Finance Study is based on responses from 2,683 new-car buyers

who financed a vehicle in the past 12 months. The study was fielded in January-March 2017.

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