F&I Q&A with Jan Kelly
Q. What is the most cost-effective source of loan documents?
A. Most state associations have up-to-date forms that members can purchase and use. Associations stay current on state legislation and can verify that their loan documents are written to comply with all federal and state statutes. When you obtain forms from other vendors, you may find that the forms are outdated.
There are many companies who specialize in standard F&I software and/or special finance programming. This software will save you time and money and reduce your errors. If you cannot locate an F&I software vendor, call us for a list of vendors.
Q. What do you think about the practice of videotaping F&I transactions?
A. The state of Alabama utilizes videotaping to reduce the number of lawsuits customers file against dealerships. With the customer’s permission, the entire F&I transaction is videotaped. The tape is then time- and date-stamped and transferred to a safe. Should a customer sue the dealership, the tape provides a history of the transaction.
Although videotaping can make participants uncomfortable, the tape does provide a permanent record of the F&I transaction and verifies proper disclosures and presentations. The videotape extends protection to both the customer and the dealership.
Q. What is the time limit for submitting title work to the state?
A. In most states, a dealership has 20 days to provide a purified title to the lender. With bankruptcies on the rise, I encourage you to give title work high priority to protect the store. If staffing does not permit you to meet this deadline, hire a service writer to complete the paperwork on time. Never underestimate the risk you eliminate and the protection you gain from properly filed paperwork.
Q. How can special finance be viewed as mainstream finance in the current economy?
A. A record number of bankruptcies were filed in the United States and Canada this past year. Over 70% of Americans now have credit problems dating from 1995. Take a look at the credit scores of your customers. How many 700+ scores do you see? How does that number compare to the type of credit customer your advertising targets?
In today’s marketplace, special financing is losing its “special” status. Lenders now require proof of income, proof of residency, and additional references to fund loans. You will be futher ahead if you ask your customers for this documentation while they are in the finance office instead of waiting for your lenders to request it.
RV Executive Today, April 2002.