The Finance and Insurance or F&I Department is a hub of activity and major profit center at any automobile dealership.
Understanding the importance of F&I helps to ensure productivity and profits.
The busy F&I Department is a major profit center at an automobile dealership. The manager of this department has a variety of duties prior to the delivery of a new vehicle:
– Reviewing the credit application of a purchaser
– Pulling and reviewing credit reports
– Preparing a suitable budget
– Structuring a loan according to bank or finance company underwriting guidelines
– Explaining loan details to the customer
– Collecting a down payment for the auto along with required documents
– Advising customer of available products, such as an extended service contract
Knowledge of responsibilities
The manager who runs the F&I Department must have an in-depth understanding of his or her responsibilities toward the customer as well as the dealership itself. There are rules to follow, such as using the word “competitive” rather than “best” in reference to finance charges and ensuring that markups remain within acceptable margins. Proper training in policies and procedures will ensure that a dealership remains in compliance with F&I and other regulations in order to avoid legal missteps.
Compliance and ethics
A dealership must comply with many government regulations and steer clear of dubious practices that could bring on questions from regulatory officials. Compliance and ethics go together, and alert personnel will establish a culture that will work within all dealership departments. Training will become part of a code of conduct that is a combination of ethics and F&I practices to ensure company integrity, productivity and continuing profits.