“Old school” dealers might heed a warning about changing tolerance levels of finance and insurance practices from David Gaul of Ferman Motor Car Co.
“Yesterday's business practices are today's felonies,” says Gaul, corporate compliance officer for Ferman dealerships, based in Tampa, FL.
He and others from dealership groups, speaking at an F&I Management and Technology conference, stress the importance of a strong business mandate that is as fail-safe as possible when seeking F&I compliance across a chain of stores.
They offer these tips:
- “Sell the same products for the same price so no one can later say you sold at a different price to a particular group,” says Gaul. A few years ago, some dealerships and captive finance firms got slapped with discrimination suits filed by minorities who alleged they unduly were charged higher auto-loan interest rates.
- “Document your process, showing all key things that must be done to make deals flow smoothly and to ensure you're in compliance,” says Gaul.
- General managers must inspect a certain number of deals a month to ensure compliance by F&I staffers, he says. “Audit deals and other processes.”
- Develop a covenant that tells staffers what's right and wrong, says Gaul. “A lot of it is common sense, such as ‘Thou shall not commit forgery.’” Minor acts of non-compliance draw warnings. But staffers who commit major violations “are gone.”
- Hold compliance meetings once a month for new hires, says Chip Doessch, President and CEO of Apple Ford Inc. in Columbia, MD.
- Develop an F&I menu that staffers “want to use vs. have to use,” says Pat Kroneberger, F&I director at the Larry H. Miller Group in Salt Lake City, UT.
- “There are rights and wrongs, and new hires need to know what you stand for,” says Kroneberger.