F&I administrators and dealerships should put price ceilings on F&I products to protect themselves from overregulation, a group of executives from F&I providers suggested last week.
“We can police ourselves and keep this from happening,” Ken Tomaro, president of dealership software provider OptionSoft Technologies in Malta, N.Y., told audience members during a panel discussion on compliance at the Industry Summit in Las Vegas.
Alan Bond, vice president of national sales at GSFSGroup in Houston, agreed F&I administrators need to work with dealerships to set target markups and markup ceilings.
He said GSFSGroup offers compliance training. “As a product provider, dealers look at us as a trainer as well. We felt it was incumbent on us to make sure they are complying,” he said. “We want to make sure our dealers are as protected as they can be.”
Panelists were frank about what they described as mostly past abuses that have come back to haunt the industry’s reputation. On average, they said, today’s dealerships are more compliant with rules and regulations.
Joe Amendola, senior vice president of sales and marketing for the Warranty Group in Chicago, said, for instance, that in the past some dealerships gouged customers on anti-theft etching. “If it costs $47 and they sell it for $800, $900, $1,000, that’s not right,” he said. “It doesn’t look right, it doesn’t smell right, it’s not right.”
Tony Wanderon, CEO of National Auto Care in Ponte Vedra Beach, Fla., said payment packing still happens: “As much as we want to say we don’t do that in the industry, we do, and that’s why the regulators are interested in it.”
There are different versions of payment packing. But the one that came up in the panel discussion was the practice of adding features without customer approval, then telling the customer that the features are “included in the monthly payment,” without disclosing that they’re optional.
Wanderon said F&I administrators and dealerships should promote their success stories more aggressively. “I don’t think we do a good enough job of making sure people know how we take care of them,” he said. “We all pay a lot of claims, and customers are taken care of.”