Welcome to the exciting world of F&I. I can’t think of a better role inside a dealership, and I’ve worn a few hats in my time. But there is a lot to learn. I thought I’d shed some light on the profession for those of you preparing to make the jump to the finance office.
In February 2013, I wrote a “Newbie’s Guide to F&I.” The article was mainly comprised of sage advice from seasoned veterans about what to avoid. But there is so much more about the profession than avoiding problems, so I thought I would expand on that original column with a two-part series on becoming an F&I manager.
This month, I’m going to cover the compliance side of F&I. Before I dive in, I need to remind you that I am not an attorney, so the following should not be taken as legal advice. Now let’s get to it.
If you’re serious about a career in F&I, you first need to know the rules of the road. Most product providers partner with a compliance firm to educate their customers’ F&I teams. Since you’ll be representing their products, you can bet your provider properly vetted the training firm. So take advantage.
I’d also suggest visiting the website of the Association of Finance & Insurance Professionals (AFIP). Founded in 1989, the organization’s certification program provides F&I managers with a working knowledge of the state and federal laws associated with the profession.
So you have a sense of what you need to know, I recommend looking up a November 2010 article published in Auto Dealer Today, F&I and Showroom’s sister publication. The headline appropriately reads, “19 Laws, Rules and Regulations That Can Cost You More Than Money.” As you’ll see, the rules detailed in that article focus heavily on disclosures. That’s because the words we use mean everything in the box. Say the wrong thing and you could trigger hefty fines and penalties.
Hey, this is serious stuff, folks.
Yes, the F&I role does have some perks. You get a nice office and get to wear expensive clothes. You also get taken to nice restaurants by product reps. But with those perks comes a lot of responsibility.
Let me put it this way: Have you ever experienced the wrath of an F&I manager because information on the credit app was missing or incorrect, or because you wrote down the wrong odometer reading? He wasn’t trying to ruin your day. He was simply trying to get the right information before vetting it through various compliance portals to ensure your store isn’t dealing with an identify thief or someone on the Office of Foreign Assets Control’s list of “specially designated nationals.”
And that’s just the beginning. There are also the agreements your store signs with various finance sources. They contain each lender’s own set of rules and expectations for what happens before they take assignment of a deal.
There’s more. See, all those forms we ask customers to sign contain information we F&I managers must memorize and comprehend. And it can take hours to digest all that legalese. You can’t just wing it, although there are some F&I managers who try. If they don’t know the answer, they’ll lie or give incorrect information. Problem is, even the smallest lie can run afoul of the Federal Trade Commission Act’s prohibition on unfair or deceptive acts or practices. Even states employ UDAP statutes that require us to make accurate disclosures to customers.
“Wait,” you say. “We’re not bankers, are we?” Well, under several laws enforced by the Federal Trade Commission, we are considered creditors because we participate in the decision to extend credit. In fact, check out the retail installment sales contract you ask your customers to review and sign. There you’ll find language that binds the customer to the “seller-creditor,” which is the dealership.
Why am I drilling this so hard? Because F&I isn’t some game with sleight-of-hand parlor tricks. The position demands a keen understanding of all the rules that govern it.
If I haven’t scared you off, tune in next month for Part Two. I’ll be covering the meat and potatoes of the job, including deal structure, time management and dealing with finance sources. Until next month, good luck and keep closing!
Marv Eleazer is the F&I director at Langdale Ford in Valdosta, Ga. Email him at [email protected]