Monday, November 19, 2007

5 Legal Drawbacks to a Unified Front-End ( Page 3 of 3 )

Getting F&I Involved at the Start

Is there a solution? Absolutely.

Instead of moving the F&I processes out into the sales department, why not integrate F&I personnel into the sales process?

A good example of this concept is the use of an F&I administrative assistant. This is a person who typically comes out of the back office environment and is familiar with the paperwork flow and F&I process. This person’s job is to assist in the administrative functions of F&I, which include ensuring that all the required paperwork is properly executed, acting as a liaison to the office, fulfilling lender stipulations and putting the funding packages together.

The bottom line result is that the F&I director and managers have more time to sell products and get deals approved. Not to mention, this approach can help reduce contracts in transit.
Instead of having a salesperson take a credit application, let an F&I professional be a part of your qualification process, and let him or her coach the customer on completing a properly executed credit application.

Instead of letting the desk manager run the credit report, review it and structure the deal, let an F&I professional work with the desk manager. This will ensure that the credit information is properly secured, that the credit report is reviewed for fraud alerts, that the customer was cleared through the Office of Foreign Assets Control (OFAC), and that the deal is properly structured and falls within compliance and underwriting guidelines.

Instead of the salesperson reviewing warranty-related information at delivery, have an F&I professional take over this responsibility to ensure the forms are properly executed and the warranty terms are properly explained. Customers will appreciate someone who is proficient in explaining the differences between an “AS IS” vs. “IMPLIED” warranty, the differences between a “FULL” and “LIMITED” warranty, a “REMAINING FACTORY WARRANTY” or “PRE-OWNED CERTIFIED FACTORY” warranty, and between a warranty and service contract.

F&I professionals who are more involved with the sales process are also going to be able to train sales personnel on planting seeds and eventually selling more products.

As an example, during the appraisal process, do you ask the customer if there is a service contract on the vehicle?

This technique is very effective when the appraiser asks the question. If there is a payoff on the trade, do you try to get a copy of the previous RISC to see what products the customer purchased and if you can help with the refund process?

Do you work with the service advisors to have them check to see if customers have purchased a service contract?

Does an average salesperson know that offering GAP to a person who is financing 30 percent of the Manufacturer’s Suggested Retail Price (MSRP) is akin to selling credit insurance to a cash customer?

Being more visible in the sales process will also remove some of the fear and anxiety customers have when they are turned over to F&I.

Consider this scenario: Your dealership is sued by a customer who claims the dealership ran his credit without consent. It is documented that a salesperson was involved in the credit application process. The salesperson is being deposed by the plaintiff’s attorney and is asked to describe what training he or she received regarding credit applications. How would your salespeople respond?

It’s time for a paradigm shift.

Joe Bartolone is an associate with gvo3 & Associates, a nationally recognized sales and F&I compliance consulting and training company. For more information, visit

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