How to Avoid Trouble

At least once a year, a news outlet does a story about how car dealers “cheat” customers. It is generally a cheap and easy ratings grabber. And because of their past reputations, dealers can be easy targets.

Usually the investigative work of these local reporters focuses on why paint protection and undercoating may not be worth the $995 charged by the dealer, or shows the customer how to learn the invoice price of a vehicle before shopping.

However, the recent Dateline NBC news feature on a Sonic Automotive Inc. dealership in North Carolina raises additional questions. Is the pressure to get to the magical $1,000 per deal finance revenue causing some of these problems, or is it just unskilled salespeople who take illegal shortcuts to get deals done?

As we know, there are a wide variety of tricks and non-disclosures that can take place in the finance department during the sales process. There is also a significant difference between the gray area and outright fraud.

Having been in hundreds of different dealerships in my career, I have seen an incredible range of finance office talent. I have seen exceptional F&I managers. Then I've seen others who wouldn't be able to get Bill Gates approved for a loan.

To be at $1,000 by selling product, converting cash and credit union deals, and holding reasonable rate participation represents real talent and should be well rewarded. To get to $1,000 per contract by fraud is not skill; it is the refuge of losers.

The F&I manager needs to be the gatekeeper in the sales process to protect the dealership from potential problem and legal situations, not an abettor to getting bad deals done or doing whatever is necessary to increase penetration levels in order to score bonuses.

Here are steps that can be taken to help support and protect the F&I department:

The F&I position is not easy. It carries significant responsibilities. That can never be an excuse for committing fraud. Unfortunately, the type of actions that Dateline caught happen more often than we'd like to admit, even though it is confined to a small minority of rogue F&I and sales personnel.

Regardless, dealers should institute changes and monitor practices to prevent their dealerships from possibly being next in the news.

Bryan Dorfler is an F&I consultant. E-mail: [email protected]