Profile of the Finance and Insurance or F&I Manager at an Automotive Dealership:
C.
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The Automotive Finance and Insurance Manager - also referred to the Business Manager, F&I Manager, Finance Person, or my favorite - " The guy who's gonna do your paperwork " has gotten a less than positive reputation over the years because of the unethical activities of a few.
This site will enlighten you on the reality of what it is like to be a Finance Manager at an automobile dealership and will provide real advice on what to look for in an Ethcal F&I department.
My finance experience comes from fourteen long years - and counting - in the car business. I served for five years at a high volume domestic dealership, five years at an even higher volume import dealership, and am currently serving as a Finance Director of a medium volume luxury import store. I work a minimum of 47 hours a week which is low for this profession. (I had put in many years of 70+ hour weeks.) Getting promoted has it's con's though, but I'll elaborate on that in a different post.
The point is, if you've had a negative experience in the Finance Office - there is a very good chance that the Finance Manager was experiencing some degree of fatigue, (especially if it's well after the dealership's scheduled closing time.)
Now fatigue is a bad excuse for why some people might have been treated less than professionally in the Finance Office, but it sometimes is just human nature responding to the the stresses of working in the car business. The way to have an fantastic car buying experience is to be civil and decent to the salesperson and the Sales or Finance Managers. Think about how you feel when you interact with someone who is just really nice, you would do anything for them.
That is how you should come into a car dealership. Don't come in with your arms folded and a scowl on your face spitting venom and expect an awesome experience.
A car salesperson on the other hand is trained to try and make a customer comfortable - in fact you will get a satisfaction survey from the manufacturer after your purchase and if the dealership does not earn a high enough score on this survey, the dealership could lose a considerable amount of money. So it is demanded of all team members who interact with customers to be on their best behavior (i.e. butt kissing is mandatory at a car dealership.) It really makes doing our job easier when the customer comes in and also has a good attitude.
Times are rapidly changing and the day of the once pushy car salesman or pushy F&I Manager is rapidly winding down. This is a very good article from WardsDealer.com to illustrate this point: Pushy Car Salespeople - more Fiction than Fact.
*** Insider Secret #1 The NICE customer get's the best deal.
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There is so much information about every detail concerning the cars and trucks that we sell available for free on the internet. Customers who use the internet to research their purchase are, in many cases, more knowledgeable on our models than some of my salespeople.
Just by using Google You can find out the Factory Invoice, Trade-in values, and the best Interest Rates in a couple of minutes. We know there are no secrets and the car business has been forced to change with the times.
Frankly it is a more pleasant experience to sell a car knowing that the customer is on the same page. We like the fact that knowing our invoice makes it obvious how little mark-up there really is in these cars.
We can't keep the lights on selling cars for invoice - the little bit of factory money that we get usually pays the interest payments on all the inventory we stock. Basic economics proves that for a dealership to stay in business it has to make a profit. If there were no more independant franchised dealerships, you would be left dealing with the manufacturer - and paying the sticker price.
They don't negotiate when they sell cars to us - they are making their fixed profit on every unit sold to their most valuable customers, the Dealerships. If every manufacturer cancelled every franchise agreement, bought out every owner and re-opened shop as manufacturer outlets - the sticker price would immediately go up $3-5,000 to pay for retail operating expenses, the consumer would lose. Let the dealer make a little money, take the deal at $1500 over and know that we'll have your back if you have any problems.
*** Insider Secret #2 Ask for and expect a FAIR deal.
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Once you've received a fair deal on the vehicle you want to own, the salesperson will ask "Would you like to take advantage of the fantastic interest rates available through our Finance Department?"
"What are these fantastic rates" you would respond.
He or she would then produce a credit aplication and say "Let's complete this customer statement so that our Finance Manager can tell you the fantastic rates and terms that you qualify for." He or she will probably hold a pen to the top line, look down at the application and ask "will the car be titled in one name or two?" They are trained to not look up until you answer. (This is ok.)
Backing up to "how you prepare to enter the dealership." Before you even walk in the door, ALWAYS ALWAYS ALWAYS obtain a pre-approval at your Bank, Credit Union or have in your possession a BLANK CHECK from a lender such as RoadLoans
or up2drive.com
(a division of the BMW group).
Salespeople appreciate you having the pre-approval because they know you can definately buy the vehicle and their time with you will be spent getting a sale. Finance Managers appreciate it also because once they know the rate you are approved for, they can usually find a source to give better terms which will save you money.
The blank check programs are fantastic, after a quick pre-approval, you'll be mailed a blank check so that you can go shopping as if you were paying cash. The check will have stipulations on it, for example, "not valid for vehicles older than 2002 or for more than $30,000." Also enclosed with the check is loan paperwork you'll sign before it's use specifying the interest rate and payments for 60, or 72 month financing etc., the rates are fairly based on your credit.
If your credit is less than perfect, a pre-approval like this might prevent some embarrassment at the dealership. Either way, by being pre-approved, you know you can buy the vehicle you want and what the interest rate and payments will be before talking to the Finance Manager. I have accepted over a hundred checks combined from RoadLoans
and up2drive.com
and endorse both programs.
Even with your preapproval check in hand, you should still fill out the dealership's credit application and let the salesperson submit it to the Finance Department.
Tell the salesperson exactly what you have been pre-approved for and request that in addition to the credit bureau pulled by the Finance Manager, you ONLY want it submitted to ONE OTHER LENDER in order to try and match or beat your pre-approved rate. For any additional submissions, you request the Finance Manager to come out and personally tell you the reason(s) why.
The Finance Manager, if he or she is the trained professional you want to do business with, should know by looking at your credit bureau which lender will produce the best terms and should only need to submit it to one lender.
By requesting this you are trying to prevent a new or not properly trained Finance Manager from taking your application and "Shotgunning" it to every lender they have - right now, I have FOURTEEN different sources to send an an application to. Each lender will pull a credit bureau of their own in turn adding an additional inquiry for credit to your bureau. You want to have as few inquiries as possible to maximize your credit score.
*** Insider Secret #3
Obtain a pre-approval from your own bank, credit union, or a
"BLANK CHECK" from
or
before going into the Dealership.
RoadLoans - Auto Finance Made Easy!
.
Click here to apply for person to person auto financing.
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Request the qualifications of the Finance Department. Is it an ethical well-run Department? You can ask this at any time during the sales process. Specifically you should ask exactly what the dealership's policy is on securing customers non-public, personal and private information. What is the dealership's policy on identity theft and what safeguards are in place to keep your identity secure.
Is the Finance Department certified through A.F.I.P. - The Association of Finance and Insurance Professionals? If so, you can be completely relaxed an assured that you are dealing with a licensed and trained professional. Please thoroughly reaseach AFIP through their website at www.AFIP.com.
Does the Finance Department hold any Ethics certifications? Feel good if they are certified through the Institute for Ethical Behavior.
What, if any, are the dealership's personal code of ethics and mission statement?
These questions should make you feel very comfortable or very UN-COMFORTABLE with this dealership. If the dealership has no policy in place to protect your identity, you should not even let them photocopy your drivers liscense. How do you know where the copy will end up if the dealership has no safeguards in place? The salesperson should initially make you feel comfortable that your information is secure, but the Finance Manager is really the one to ask.
I like it when customers ask what my dealerships policies and procedures are concerning identity theft and how will I safeguard their personal information - I will take a customer and show him (her) our policy and procedure manual. I will thoroughly explain the process that is in place to protect their personal information.
This is one of the things that defines an Automotive F&I Professional.
If you ask the Finance Manager what the dealership's policies and procedures are to protect your identity and he or she has to think about it for longer than a couple of seconds, or worse yet, gives you the "deer in the headlight" look before answering - the dealership either doesn't have any kind of system in place or it was never properly installed and probably not being followed.
This should cause a major concern - do you leave your doors unlocked at your home? how about your car? This dealership is at risk for multiple violations of the "Safeguards Rule."
The Safeguards rule went into effect May 23, 2003. It sets out specific steps dealerships and other financial institutions must take to protect nonpublic customer information from unauthorized access.
The Federal Reserve Board provides links to the full text of every Regulation that affects the Automotive industry. Visit the "Electronic Code of Federal Regulations" which is updated daily: www.gpoaccess.gov/ecfr/index.html . See Safeguards rule: Title 16 Commercial Practices Part 314 (G-L-B Act). Unless you are a lawyer, reading this will be "less than riveting" at best, but at least you know I'm not making this stuff up. By the way, the dealership could be penalized up to $11,000 per violation.
As it could be YOUR drivers liscense copy or credit application that get's photocopied and sold to identity thieves...
*** Insider Secret #4
Make sure the dealership has a Policy and Procedure in place to protect your confidential nonpublic personal and financial information.
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DEALERS:
Let's get something straight before you start e-mailing me, calling me a traitor or similar garbage. I said at the very beginning that my reason for hosting this site, spending my own hard-earned F&I comission to pay for this domain and my time spent writing all this stuff down - was to help improve the Automotive Industry as a whole.
You know that what I am saying needs to be said. Do the research yourself. If you don't want a customer coming in knowing these things, there is something you're trying to hide. You could be one of the reasons for all the recent lawsuits giving the car business a bad name. You're probably one of the reasons the Fed has forced Regualtions on us to begin with.
Look at the mortgage industry with the collapse of the sub-prime lending market. It's a shame shat happened in that fiasco - all because of greed. I will do everything I can do to not let that happen to the Automotive industry. Email all you want - I'll be happy to debate on this. AutoFinanceInsider@yahoo.com.
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A FREE COPY of the Auto Finance Insider E-book will be sent to those who link to this site or to the informative Laws and Regs blog: http://www.autofinanceinsider.blogspot.com/.
Send an E-mail after you link to the site. AutoFinanceInsider@yahoo.com
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Until we eventually meet,
AFI
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