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Compliance

The Compliance Side of Menu Selling

October 2007, F&I and Showroom - Feature

by Joe Bartolone - Also by this author

It wasn’t too long ago that my grandchildren went through that faze of not wanting to try food they hadn’t eaten before. It was easy to get them to eat just about anything when they were toddlers. All you had to do was make some airplane noises and wave the food around in the air. They’d open their mouth and it was mission accomplished. Then all of a sudden they developed this skill set that allowed them to determine whether or not they wanted to venture into a new food group by simply looking at their plate.

The process was probably similar to the one the industry experienced when menus were first introduced. All it took was for F&I managers to give menus a chance. Once they did, they probably learned to like it. Over time, F&I managers became more comfortable with the tool and saw their product penetration and incomes go up. Throughout this time, the F&I menu also evolved into a great compliance tool. In fact, from my auditing experience, I can say unequivocally that there is a direct correlation between how well the F&I menu is executed and the overall compliance level of the dealership’s sales and F&I departments.

In this article I’m not going to focus on the menu as a production tool. We all know the 100/100/100 rule: Present 100 percent of the products to 100 percent of the customers 100 percent of the time and you will sell more products. What I would like to focus on is the compliance side of the F&I menu, and look at it from two different perspectives — the design of the form and the execution of the form.

Menu Benefits and Design

New and improved menu features are being added all the time. However, there are several components required for a well-designed menu. Let’s take a look at what makes for a well-groomed menu.

Electronic vs. Manual: When first introduced, all menus were manual or pre-printed so all of the variable information had to be handwritten. Today, most menus are Web-based and are integrated into dealer management systems (DMS), making it much easier to generate a professional and personalized menu. The electronic version is recommended because it provides more selling time, makes it much easier to customize the product offerings to the customer’s needs, minimizes errors and makes it virtually impossible to manipulate the menu to the customer’s disadvantage.

Customer’s Name and Vehicle Description: Confirms for whom and what vehicle the menu was created.

Review of Agreed-To Deal Terms: For this discussion, we have to back up into the sales process. If the dealership is using some type of desking system, I look for two things. First, does the dealership have a well-documented first pencil payment methodology? Second, are the final deal terms clearly disclosed and agreed to by the customer? The deal terms should include the cash selling price, trade allowance, payoff, down payment, and, if a payment was quoted, the payment, term and rate. Assuming they are properly disclosed, the final agreed-to terms on the sales documents should be the same as the deal terms at the top of the menu.

In addition to the deal terms, the top of the menu should also disclose the tax, title and license fees, as well as the DOC fee — which, when added to the deal terms, equals the amount financed. This is a very important part of the menu because it can help provide a very defensible position should you be accused of payment packing — the practice of including room in the payment for F&I products without full disclosure to the customer.

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