F&I In The Line of Fire – Can You Take The Heat?
F&I is a hot topic. The media, consumer advocacy groups and the legal system have all turned up the heat on dealership F&I functions. Are you exercising ETHICS in your F&I process? Here’s a quick way to gauge your fitness level.
Enthusiasm based on a strong belief that the products you present to your customers are solutions to their expressed needs and a result of your positive interaction with the customer to build a long-term relationship with the dealership.
True representation of the products, services, customer, deal, and vehicle to your lenders. Dealer agreements begin with the phase, “We are entering a business relationship in good faith…” The dealership makes certain warrants to the lender, including accurate information on a credit application, accurate list of equipment on both the sold vehicle and the trade, and accurate statement that down payment monies are unencumbered.
When dealership personnel violate this trust they test the limits of the working relationship between the dealership and the lender. Misrepresentations can be viewed as bank fraud and trigger an audit of all outstanding dealership loans.
Honesty really is the best policy, just as Ben Franklin said. F&I policies add value but do not cover everything. The policies do have limitations, just like health insurance. Service agreements operate like health coverage for vehicles – protection for the major items with a small co-payment.
What do you say when your customer asks, ”Is this the best rate?” An honest answer is: “Probably not. If you look hard enough, far enough and long enough you might find something better. This is the rate we are prepared to provide for you today. Do these arrangements meet your budget?”
The word “best” is getting everyone into trouble. It is best to remember that better and worse are best partners.
Integrity begins with I and ends with You (with apologies to the grammarians among us). On a recent flight, I sat next to a gentleman who was preparing a presentation on leadership. I asked him what he thought was the key ingredient to making a great leader. He smiled and said, “Integrity in thought, actions, and deeds. He went on to say that a good test for anyone is this: “How would you feel if the people you loved most read about what you do and how you do it?” I want to feel proud, don’t you?
Consequences follow actions. As an industry we should hold ourselves accountable for what we do and how we do it. Audit deals and take corrective actions when you discover any hint of impropriety. Most errors are honest mistakes that can be made right if we take action immediately. On the other hand, intentional and willful misrepresentations hurt the dealership and its allied partners and deserve swift and just remedies.
Service after the sale is a key in building customer retention. Be sure to under promise and over deliver. Our customers want service, they will pay for service, and they will return for service. F&I products and policies are the tools that allow the dealership to provide world-class service without straining a customer’s budget.
If Marshall McLuhan was right and the medium is the message, we have our marching orders. While we all agree the media is showing the worst and not the best, the fact remains that the unethical practices recently portrayed have put a black mark on our industry. Redeeming ourselves in the eyes of the public will take our full time best efforts.
Is your EIQ (Ethical Intelligence Quotient) as fit as your SIQ (Sales Intelligence Quotient?)
Test your dealership against the NADA Code of Ethics at www.nada.org.
World of Special Finance , June 2004