Desking Deals From the Same Page
Now more than ever, sales managers and financial representatives must work in unison to secure the sale. The current litigious environment demands that we pay as much attention to how we carry out tasks as we do to the results we achieve.
Sales managers can support the F&I process by requiring sales representatives to ask about the existence of service agreements and aftermarket products on the trade before they obtain a trade figure from the used car manager. No sales manager is expected to pack payments, a practice that violates the consumer protection laws of 1968.
Time is money nowhere more than in the F&I environment. Rewriting opportunities are limited. The initial deal structure will quite often dictate success or failure in obtaining funding.
Senior management should set APR policy at 1 point or 2 points (which may well turn into “moot” points since most lenders are capping dealer participation between 2.5 and 3 points). Sales managers should use a consistent rate spread to avoid any appearance of discrimination regarding APR.
The sales manager’s priority is to secure the sale, then work to obtain the financing, identifying the specific lender they had in mind when quoting an APR. For example, one lender will advance 125% of invoice and another will advance 125% of retail. An experienced F&I manager recognizes the clock is ticking with respect to lender approvals and knows each lender’s advance policy. However, a new F&I manager may not know which lender to submit the deal to for faster approval. The sales manager’s directions can make a huge difference. Sales managers should also know how to read a lender’s guidelines and keep a copy of each lender’s guidelines at their desks.
When a sales manager quotes a monthly payment they also need to disclose the APR used to calculate the payment, as well as the length of the loan. Full disclosures remove any hint of impropriety and give the customer all the information necessary to make an informed choice.
All sales representatives should post a clear and conspicuous sign in their offices stating that all payments quoted depend on final lender approval.
A sales consultant recently told me that he was not the bank and should not be asking the customer for any down payment funds. My response to his assertion was straightforward: Down payment money should equal the gross profit in the deal. Lenders do not want to fund dealer profits. If you want to correct the negative equity trends in your customer trades you must require down payment.
The F&I representative obtains the customer’s credit history. The credit history directly affects the loan terms and the down payment requirements. Equity is the best way to lubricate a lender’s squeaky wheel.
Sales managers and F&I managers must work in concert to support each others’ efforts to secure the deal, collect the down payment, and accurately represent the customer and the vehicle to the lenders.
When you desk deals from the same page there’s no need to ask, “Who’s on First?”
Dealer Marketing, April ’04 Issue. P. 12