Believe it or not, a lot of sales managers still ask me how much “leg” they need to leave in the payment for the F&I manager. In fact, as recently as last month, a manager messaged me to say that his general sales manager was demanding he leave a $30 a month leg in the payment he quotes consumers to help out the F&I department.
Regardless of how many years you’ve gotten away with payment packing, I’ll tell you this: If you get caught just once, it will ruin your life and career.
Let me repeat myself: You may not offer the customer a financial package with products included — even though you disclosed the existence of those products as being included in the payment. The one exception is if the customer has been clearly told he or she can buy the vehicle for the base payment at the base interest rate without the products.
Bottom line, there are no loop holes. Don’t like it? Get out of the industry.
Regulation Z of the Truth in Lending Act requires the provider of the loan (believe it or not, that means you — at least until the bank purchases the contract) to make the consumer aware of exactly how much it costs to finance his or her vehicle purchase. This allows the consumer to compare the cost of financing vs. paying cash. It also allows them to compare the cost of financing at your store vs. alternative sources.
Click below to read the full article: