In a recent issue of a trade magazine, the FTC issued a reminder to auto dealers that they are very much laser focused on deceptive advertising practices, spot-deliveries, and the products that are sold out of the F&I office.
Since the F&I Department does not normally get involved in the advertising that the dealership uses, this article will focus on deliveries and products.
In their recent roundtables, consumer workshops, and in-person interviews, the FTC discovered that many consumers were confused by the desking practices. With rebates on some cars, the focus on monthly payments rather than price, and even using a tablet to discuss the price, consumers were not sure of what the vehicle actually cost, felt that the sales person was hiding the price, or just felt that the sales person was going too fast for them to understand. The bottom line is to reinforce the out-the-door price often. For F&I, it works well to follow the traditional menu presentation that begins, “This is the payment that you agreed to and I want to assure you that you can drive out of here at that payment. It is based on (the out-the-door price of $XXX).
In line with this, consumers were confused over the financing terms that were expressed by the sales person, especially when they were changed or reversed in the F&I office. This happens when the lender’s decision is not the same as the terms that were used to calculate the payment from the floor. In this case, it is best to go to the sales person’s desk to discuss the base payment with the customer. In some cases, you may want to have the customer initial the base payment. This removes the products from the equation and assures that the customer understands, plus it shows the F&I Manager as the person who is the professional expert and not another sales person.
With regard to the products that are sold from the F&I office, the FTC is recommending total transparency, full disclosure, and customer signatures that acknowledge that they know what they purchased, what they declined, what the products cost, and that they are optional. Take a close look at your menu and your menu disclosure. All of this information should be on it. If it isn’t check with your menu provider or your JeramGroup representative and we can help you make these changes.
The ever-present time issue again came up in the FTC’s discussions. In some cases it was that the process took too long. In others, the process was rushed. I’m not sure that there is an answer to this dilemma. I would suggest that if you keep the customer engaged in the process and ask questions such as, “Does that make sense?” and “Do you have any questions so far?” that you would limit customers feeling overwhelmed or rushed.
Finally, with the use of digital information delivery, it is critical that the consumer understands what they are agreeing to, what their rights are with regard to paper copies and wet ink signatures. This is still a newer part of the F&I experience both for the F&I Manager and for the customer. Take your time. Give the customer time and give them information that reassures them. It’s a new idea to many of them, and it’s still 2020 – so proceed with caution!
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