Staying out of the News

Staying out of the News

If you listen to the negative reporting about automobile dealerships, it focuses mostly on two areas: The first area is mishandling of customers’ non-published information (NPI) and the other is lack of disclosure. Both of these areas should be addressed in every dealership.

Today, identity is the most valuable target for theft, not paper money. Non-published information should be treated as if it were currency. When currency is worn, the Department of the Treasury has specific guidelines it adheres to regarding its disposal. Think of your customers’ NPI in the same way; establish specific guidelines and procedures for the disposal of non-published information.

You keep your cash in a secure place, and you need to do the same thing with your customers’ non-published information. Retaining and disposing of customer and employee records should be outlined in the company policy and procedures manual. This topic should also be covered in the safeguard orientation meetings held for new hires.

Do you know how your policies and procedures are holding up? When was your last safeguard audit? Do you documenting the audits?

Proper disclosures by the F&I producers is essential too. Do you have a separate disclosure sheet that identifies the customer, the vehicle purchased, and the terms other than the retail installment contract? The state of California has made it law that dealerships provide a separate disclosure statement to each customer. The document identifies the payment details without any F&I products or services, additionally it itemizes all the products the customer chooses to purchase with the retail prices and the new payment, including all the Regulation Z requirements.

The separate disclosure form is a great idea, even if it is not required in your state. It eliminates any hint of non-disclosure. If you do not use a separate disclosure form, I would advise F&I personnel to have customers initial in the margins of the itemization section of the retail installment contract for anything that the customer purchased other than the vehicle.

With a little monitoring and self-evaluation of policies and procedures, you can avoid any negative press and maintain a positive image for your dealership.

Dealer Marketing, November 2007, P. 43