When you walk into your local barber/hair salon to get a haircut, you know you are dealing with a certified professional. This individual has acquired a license, passed a certification process, and received hours of training to trim or style your mane. Similarly, when you go to a doctor’s office, you aren’t meeting with someone with no related experience in the medical field. However, that could be the case for your average consumer when they walk into their local dealership to buy a car. For some reason, F&I Managers are not required to be licensed, trained, or have any known experience related to their job. If this is the business model your dealership employs, you might as well sell your customers a car without breaks. It’s that dangerous.
That’s why as someone who has over 10 years of experience working in various capacities at several larger dealerships, including another five as a consultant, I’m proposing that we eliminate any questionable practices, and people, that may bring additional negative attention to our industry. The best way is to establish a ‘Bill of Rights’ for car dealerships and F&I Mangers.
All F&I Managers should be licensed. It’s not required in our industry, but at IDDS Group, we believe that it should be. This will improve the industry, benefit both dealerships and consumers, and weed out all the bad apples in the field who give car dealerships and salesmen a bad name. If lawyers, accountants, and the aforementioned and other professions require a license and certification process to operate, F&I Managers should as well.
This isn’t an innovative development. We wouldn’t be the first industry to step up to the ‘Bill of Rights’ plate. Several familiar names have already ventured down this path. In 2014, major NYC-based retailers such as Barney’s, Macy’s, Bergdorf Goodman, and Saks Fifth Avenue agreed to and signed a “Customers’ Bill of Rights.” These stores wanted to alleviate customer concerns and gain back consumer trust. This ‘best practice’ has been applauded by the media and public for its effectiveness and innovation.
In order to succeed, we must demand that every dealership commits to specific standards for F&I Managers and show-off their business ethics. Car dealerships can arguably considered, along with the real estate market, the lifeblood of the U.S. economy. There’s a reason why every dealership in the U.S. has an American flag outside its building. Car dealerships are as ‘Americana’ as it gets. So why not take after our forefathers and establish this ‘Bill of Rights’?
It starts with three simple best practices for every car dealership and dealer principle to adhere to:
- Licensing/Certification process: The first thing you see when you walk into a lawyer’s office are his/her degrees on the wall. This is not an accident and serves two main purposes. First, it puts you an ease knowing you are dealing with someone who passed the bar, is legally allowed to practice law, isn’t going to rip you off, and knows what he/she is doing. Second, it provides you with a background on his/her impressive body of work. Think about it how likely are you to hire a lawyer who graduated from a well-known, respectable college as opposed to Night School University of Small Town, USA?
Now imagine walking in your local dealership, meeting with the Finance Manager, and seeing his/her degree from an accredited industry governing board. Consumers would feel completely different then they do now. This will help cultivate a better relationship between the dealer and consumer, and lead to a better chance of a repeat customer.
- Cut ties with questionable F&I Managers: If you have an F&I Manger who is not certified, it’s up to the dealer principle to ensure they meet the necessary requirements. After all, would any consumer want to deal with an F&I Manager who is not licensed? If an F&I Manager has a poor reputation, it’s most likely for a reason. Those reputations would either be cleaned up with these best practices in place, or these bad apples wouldn’t last long unless they got with the times. With a licensing system in place, dealer principles would also see customer complaints decrease significantly. To receive your certification, you must score at least an 80 percent. The requirements to pass the test are difficult; as they should be. This is not something you should be able to breeze through.
If you don’t care about your dealership’s online reviews, it’s time to get out of the Stone Age. Consumers value online reviews and read everything about a dealership before they step foot in the door; if they do at all. The biggest complaint people have about dealerships involves financials. With a certification process in place, negative online reviews could become ancient history.
- Require it; then promote it: Bonus points if a dealer is Association of Finance & Insurance Professionals (AFIP) Certified. The AFIP is the sanctioning body for the F&I trade. The testing process consists of three modules – Federal Rules and Regulations, State Rules and Regulations, and Ethics. It takes six months to finish studying and become certified, and you must have no prior felony convictions for pecuniary or fiduciary crimes. There is a continuing education component to it as well.
However, for some reason an AFIP Certification is not required across the industry. Very few dealer principles actually require this. That has to change immediately. Requiring certification throughout your dealership is the first step to mass acceptance, and the first step in allowing consumers to know they can trust you.
It doesn’t just end there. Having a license in place is great, but it’s what you do with it that mattes more. Anyone can frame a piece of paper and hang on the wall. It’s meaningless unless it is used properly. Dealers should be letting customers know that their F&I staff is certified. Share this information on social media channels and on your company website to provide extra credibility and watch your customer traffic grow.
The need for a Bill of Rights
Car dealerships have survived for nearly 100 years; they aren’t going anywhere. However, it’s wrong to take the approach “If it ain’t broken, don’t fix it.” The car dealership model is broken. For too long, too many dealers and F&I Managers have been taking advantage of consumers and giving our industry and profession a bad name. There’s a reason why the term “car salesman” has a negative connotation. That’s why our current model needs to be fixed.
Establishing industry best practices and turning our reputation around won’t be done overnight. We need other industry leaders to step-up, help us create a governing body to spread the message and regulate, and have dealerships implement these policies. We also need to educate consumers so they know what to look for when they shop for a car. Right now, what we need is to turn the key and start the engine on this process. Otherwise, in our current state, the industry is stuck in park and isn’t doing anything to improve, innovate, or go anywhere.