Paperwork occupies about 80 percent of an F&I manager's day. CSI scores and bounced contracts bear witness to the fact that few managers enjoy the paper part of their job. However, the last statement in the F&I prime directive is to complete all legal documentation for a transaction, so let's get started on the paper trail.
There's a Method to the Madness
Documentation begins with the sales manager's deal structure sheet, when management authorizes the deal and sends it to the financial center for processing. Since different lenders have different advance guidelines that yield different advances, structure the deal with a particular lender in mind and make sure the sales manager communicates this information to the financial center.
If your store uses a system in which payments are discussed before the customer meets with the F&I representative, your sales managers should have a copy of lender buy rate notices and they should know how to read credit bureaus beyond the credit score line.
If your store's system requires the sales department to treat every sale as a cash deal and secure the sale on a difference figure, it is the F&I representative's responsibility to secure the financing, obtain the credit application, and then present the products. (While many dealerships use this system, they may not factor in the extra time it adds to the F&I process.)
Divide & Conquer
Many stores choose to implement a two-visit process. The first visit is used to secure the sale, sell the financing, obtain the credit application, receipt the deposit and complete the purchase order. In the first visit, the product presentation is limited to anything that may need to be physically added to the vehicle, such as protective coatings. Other insurance products such as service contracts, credit insurance and GAP protection are reserved for the actual contracting appointment or financial delivery.
During the financial delivery, many of you have been counseled to prepare the title documentation ahead of time and to get the customer signing right away. A word of caution here: A recent 60 Minutes exposé suggested that this practice indicates a system designed to get the customer into a signing mode and minimize the time for contract disclosures.
A better practice is to have the contract sitting in the printer when the customer comes into the office. After you secure commitment on a plan that fits both the customer's needs and budget, you are ready to type the contract. Pull it out of the printer, separate the customer's copy of the contract from the original and place both copies side by side on a cleared desk and proceed to disclose the entire document. Full disclosure also requires that you explain the signature sections as opposed to just using a highlighter on them.
Make a List and Check it Twice
The balance of the documentation will be easy. It will work best to group the documents:
(You might refer to these as "we owes" or "adds and removals")
Before you page the sales consultant, take a moment and compare your pile of signed documents with a checklist. A few extra seconds now can prevent funding delays and poor CSI marks as a result of inconveniencing the customer.
In an age of discrimination lawsuits, it is critical that the dealership can prove that every customer had the opportunity to purchase the extra services and protections available to them at the point of delivery. If the deal file does not have a policy or form showing purchase of an F&I center's product or service, the file should contain a signed "Customer Declination" form.
Bring out the form and fully disclose the item in a non-threatening manner. This step merely provides an audit trail should the dealership need it later.
Getting It Straight
A new F&I representative should read the front and back of every deal document to have a clear understanding of what it is and what it does. If you have questions, ask. If you miss a signature, get the customer back in sooner rather than later. When dealership office personnel ask you for a missing document, deliver it. When it comes to documentation, the longer it takes, the less urgent is seems and the more penalties there may be at stake.
Jan Kelly is the president of Kelly Enterprises. She is a sales trainer and consultant, convention speaker and frequent contributor to industry publications. For information about training opportunities call 800/336-4275 or visit the Kelly Enterprises Web site at www.JLKelly.com.