Ford Credit Scores Again in Survey of Dealers

Dealers have again ranked Ford Credit, the largest automotive lender in the country, as among the best, according to a survey.

J. D. Power Associates polled 15,000 dealers in the second quarter and got 3,000 responses. Ford ranked among the top six, according to David McKay, manager of auto finance research for Powers in Detroit.

Ford, based in Dearborn, Mich., was No. 1 in the 1995 and 1994 surveys. But Power will disclose this year's pecking order among the top companies only to buyers of the survey, Mr. McKay said.

He revealed, however, that Ford won its high overall rank this year despite a "below average" score on credit and terms.

"Dealers will accept and will sell higher rates if it comes with superior support and liberal consumer qualification," Mr. McKay said. He singled out Ford as a standout in leasing and inventory finance.

The other five lenders in Power's top six this year are First Chicago NBD Corp.; Huntington Bancshares, Columbus, Ohio; Nissan Motor Acceptance, Torrance, Calif.; National City Corp., Cleveland; and Chase Auto Finance, New York.

Last year's top scorers after Ford were Wachovia Corp., Winston-Salem, N.C.; First Security Corp., Salt Lake City; National City; First Chicago NBD; and Norwalk, Conn.-based Mercedes Benz Credit, in that order.

The survey also found that car dealers seem slightly less satisfied with their credit providers this year than last, particularly in retail leasing.

In this third annual survey of dealerships throughout the country, Power found a 3-point drop in satisfaction with retail leasing and a 1-point decline in satisfaction with capital financing.

But dealers continue to express strong approval of their lenders in inventory financing and account management.

"Overall, it's fairly stable," said Mr. McKay.

He added that the survey's timing might have contributed to the slightly negative results.

Auto manufacturers reported erratic sales in the first quarter. That, combined with a modest rise in interest rates, contributed to an atmosphere of uncertainty. And major lease financiers, such as Ford, were trying to reduce their leasing portfolios.

"As they tightened down, dealers were voicing their opposition to that," Mr. McKay said. "Given the role that leasing now plays, it's critical for moving metal for a lot of dealers."

Industry sources estimate that leasing accounts for 28% to 30% of all sales of light trucks and cars. The Consumer Bankers Association recently calculated that automobile credit outstanding in the United States - not including leasing - reached $354.3 billion last year.

John P. Peterson, president of the National Automobile Dealers Association and a Pontiac-GMAC dealer in Bloomington, Minn., said Wednesday that he had not seen the survey.

"I'm not aware of any decline in the satisfaction of dealers regarding their financial arrangements, especially with the manufacturers," Mr. Peterson added. "It could involve some independent banks, but we're especially pleased with the support we get from GM and GMAC."

The 1996 study also looked at lending to customers with impaired credit, the "subprime" category. Of the dealers who evaluated a subprime provider, 74% said they thought subprime would become more important to their business in the next few years.

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