National banks receive a preference in lending partnerships from dealers compared to regional banks, according to J.D. Power.
In the recently released 2025 J.D. Power U.S. Dealer Financing Satisfaction Study, national banks have emerged as the preferred choice for auto dealers when it comes to loan financing. The study, which surveyed responses from over 5,000 auto dealer finance professionals, rated prime lenders across captive premium, captive mass market, national bank, regional bank, and sub-prime lender segments.
The survey results show that national banks outshine regional banks in terms of satisfaction scores. On average, national banks have an impressive score of 780, while regional banks trail behind with an average score of 713. Among the top performers in the national bank category are Ally Financial and TD Auto Finance, both scoring an average of 847 and 864 respectively among national bank prime lenders.
Capital One Auto Finance also made a strong showing, earning an average satisfaction score of 820 among national bank prime lenders. On the other hand, Chase Auto has the highest score among sub-prime lenders, with an average satisfaction score of 773.
In the mass market brand prime lender segment, Subaru Motors Finance and Southeast Toyota Finance lead the pack, with scores of 866 and 874 respectively. Honda Financial Services also has a respectable score of 775 in this category.
However, the average satisfaction gap between national and regional banks has decreased compared to recent years, indicating a closer competition in the market. This could be due to the strategic moves made by regional banks to remain competitive.
Several regional banks, including KeyBank, Citizens Bank, Fifth Third Bank, Mechanics Bank, and the Bank of Montreal, have either exited or reduced their auto lending services. In response, some regional banks in Germany, such as Volksbanken and Sparkassen, have reduced or exited auto loan services due to increased regulatory burdens and competition. Instead, they have focused on digital services, partnerships with fintechs, and personalized customer advice to stay competitive.
To compete with national banks, regional institutions are advised to clearly differentiate their value proposition and show dealers how their services are superior in meeting their needs. Maserati Capital USA ranked first among premium brand prime lenders, followed by Porsche Financial Services and Jaguar Land Rover Financial Group, providing regional banks with examples of successful strategies in this competitive landscape.
The J.D. Power U.S. Dealer Financing Satisfaction Study serves as a valuable resource for both lenders and dealers, providing insights into customer satisfaction and competition within the auto financing industry. As the market continues to evolve, it will be interesting to see how lenders adapt and innovate to meet the needs of auto dealers and their customers.
