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So Here's the Deal

No Friend of Mine

F&I trainer details a foolproof method for convincing your next ‘third basemen’ to switch teams.

May 6, 2016

Our question this month comes from Kyle in St. Louis, famous for baseball, beer and the Compton Hill Water Tower. And let me tell you, that is one impressive water tower.

Kyle says, “I had a customer bring a friend in to co-sign on his loan. The buyer was all-in on the service contract, GAP and maintenance. His buddy, trying to be a hero, told him he didn’t need it. I worked with them for 45 minutes, but his buddy finally convinced him not to buy anything. What would you recommend I do the next time a friend is telling my customer not to buy anything?”

Kyle, I’m really glad you asked, because this is a very common situation. Even with a world of information at their fingertips, today’s car buyers still want someone they know and trust to help them make the big decisions. That means you have to build value in the product for the friend just as you would for the buyer — but for a vehicle the friend might never drive. This can be difficult, because, in his mind, if he doesn’t need the protection for his own car, neither does his friend. Of course, it’s not his car, and he won’t be directly affected if the vehicle breaks down, gets stolen or is totaled in an accident.

My advice is to remind your next friend that not having this protection could cost the buyer thousands of dollars. If that were to happen, it could jeopardize their friendship. If he doesn’t feel there’s any chance of his friend ever needing this protection, then he should be willing to assume the risk.

You need to help both parties realize there is a significant amount of risk involved, and that the buyer’s trusted adviser doesn’t want to take the risk either. We do this by offering to allow his buddy to assume all the risk on behalf of the buyer. Once he declines to assume the risk, it’s clearly hypocritical for him to recommend that the buyer assume the risk. We do this with a simple tool called an acknowledgement of financial responsibility form. Here’s how it works:

F&I manager: Lloyd, I understand. You don’t feel this additional coverage is necessary, and you don’t want Harry to spend money on something he doesn’t need. And you’re not about to recommend he do something you wouldn’t do, right?

The friend: Right.

F&I manager: I’m glad to hear that. We don’t want him to either. So this is an agreement that allows you to assume financial responsibility for any repairs on Harry’s car for the next seven years, provide him with substitute transportation if his car is inoperable, cover any deficiency in the event his vehicle is stolen or declared a total loss, and reimburse him for his insurance deductible. Are you willing to accept financial responsibility for these costs on his behalf?

The friend: No way!

F&I manager: I don’t blame you. I wouldn’t either. It’s too much risk. That’s why this protection is absolutely critical. As long as he has a car payment, even one repair could be financially devastating. In fact, the lender feels this protection is so important, they’re willing to advance the funds to allow Harry to obtain the coverage. And the last thing you’d ever want is for your advice to cost Harry money, damage his credit or jeopardize your friendship, am I right?

The friend: That’s true.

Kyle, thanks for your question. Your YETI is on the way! You can watch the video response to Kyle’s question and check out the Compton Hill Water Tower on my blog at And don’t forget to submit your own video for a chance to get your question answered and a free YETI! Until next month, remember, it’s a beautiful day to help a customer … and save a friendship!

Ron Reahard is president of Reahard & Associates Inc., a training company providing F&I classes, workshops, in-dealership and online training. Got a question or objection for Ron? Use your mobile phone to record a brief video (shot landscape style!) of your question and upload it to:


  1. 1. Dan [ May 09, 2016 @ 09:18AM ]

    You would honestly advocate driving a wedge through a friendship for the sake of a sale?

  2. 2. RICHARD CREMO JR [ May 10, 2016 @ 07:40AM ]


  3. 3. Buddy [ May 11, 2016 @ 04:53AM ]

    Seriously, as a buyer, I would not tolerate being forced to spend 45 minutes with an F&I manager "working" me to sell a product? If the F&I person did not accept my NO and kept "working" me to sell a product, the F&I person would be explaining to the sales manager why his customer with an 800 plus FICO was walking out the door long before 45 minutes passed.

  4. 4. F&I Dude [ May 12, 2016 @ 03:54PM ]

    I'm normally a big fan of your methods of overcoming objections, but no so much with this one. First, this is very aggressive. Second, this is not "apples to apples" logic. The co-signing friend (who is doing his buddy a big favor here) is not receiving any consideration to insure his friend's vehicle for future repairs. The company that would insure the product is going to receive thousands of dollars. If I were the co-signer, I'd say "have the bank give me the money you would pay to the insurance company and I'll gladly insure it." These insurance companies would never insure a service contract for free, so why should the co-signer? I agree with Buddy - if an F&I manager pulled this nonsense with me after taking a few hours out of my day to co-sign a loan (and take on a huge risk just by co-signing), I would walk.

  5. 5. Ron Reahard [ May 23, 2016 @ 11:11AM ]

    Thanks for your comments. While the buyer’s ‘friend’ was co-signing the loan, he was also advocating the buyer not purchase the coverage. The idea here is merely to establish that the friend does not want to assume that risk. Neither does the lender, which is why they’re willing to advance the money for the protection. Nor does he want to jeopardize their friendship because his 'advice’ might turn out to cost the buyer money. I agree, if someone spent 45 minutes trying to sell me something I don't want, I'd walk too. However, if a customer feels the F&I manager is genuinely trying to help them evaluate their options, and willing to give them all the time they need to ask questions to ensure they make the right decision for them and their family, the time it takes is irrelevant. Obviously, in every customer interaction, it's not what you say, it's how you say it. This form is merely a tool. Used properly, it can help make your job easier. However, as with any tool, used incorrectly, you can hurt yourself. Again, thanks for your feedback!

  6. 6. MORGULON [ May 23, 2016 @ 12:26PM ]

    Obviously the previous comments are by people who've never made their living in F&I and had their customers swayed by an overzealous friend or relative trying to live up to being "protector". I myself have encountered this with varying degrees of success. This was a great article and I would like a copy of the financial responsibility form. Please.

  7. 7. Ron Reahard [ May 23, 2016 @ 04:29PM ]

    Thanks for your comments. Glad you liked the article. I have already had a ton of requests for the form. Be glad to send it to you as well. Contact our office during business hours at 866-732-4273, or email me directly so I have your email, and I'll get it right to you.

  8. 8. Joe Martinez [ May 26, 2016 @ 02:28PM ]

    Great article and you are 100 percent correct. It how you present the product and if you've built trust. Thanks for sharing.

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