When I was a green-pea salesman, I listened intently to anything and everything the closers and sales managers said. These guys were good! No matter what the customer said, they had an answer. I listened and learned. When I got my shot and became a closer, I carefully followed my sales manager’s lead. Same thing as I moved up through the ranks – I listened and learned from people who had been doing it for a long time. By the time I became a GM, I knew it all, right? Well, not exactly. Take a look below and see if any of this sounds familiar?
Sales manager to salesperson: “Your customer has great credit but the bank is going to need more income. I don’t think they’ll ask for proof”. (Falsifying credit information)
Sales manager to finance manager: “Listen, these folks are in a hurry. Let’s make them mental owners. Just have them sign a contract real quick and we’ll get the rest of the paperwork done another time. If they leave without signing something, they won’t be back”. (Improper disclosure)
Sales manager to salespeople: “Guys, that ad car is a big loser. Switch your customers to something else unless we can make a lot on the back end”. (Bait and switch)
Sales manager to finance manager: “Joe’s got this guy committed at $30 a month more then we need. Let’s make some money!” (Payment packing)
Sales manager to salesperson: “We can probably get this guy done, but there’s going to be a big bank fee. If he wants that Sentra, don’t mention the ad price. We have to sell it for a few grand more for the deal to make any sense. He’ll be happy we can get him done.” (Hidden finance charge and failure to sell at advertised price)
Sales manager to sales person: “It looks like the negative equity is her hot button. Here’s what we’ll do: Tell her that we’ll pay off her trade and get her committed at $379 a month. I’ll just add the negative equity to the price.” (Failure to properly disclose negative equity)
Finance manager to salesperson: “Let your customer know that the bank may call her and ask some questions. Make sure she tells them that the car is for her and not her brother!” (Straw purchase)
Finance manager to sales manager: “I don’t care if you take a hold check for the down payment, but the bank isn’t going to go for a deferred down, so we need to show it as cash on the contract.” (Failure to disclose deferred down payment)
Finance manager to used car manager: “We’re over-advanced on that Tahoe deal. I need a book sheet for $15,500. Doesn’t it have premium wheels or something?” (Power booking)
Many long-standing dealership practices are not necessarily legal or ethical but often times staff members have no idea they are breaking the law. The vast majority of dealership employees are well-meaning, honest people just trying to earn a living. However, if they have never been properly trained in compliance matters, they may simply rely on doing business the way it’s always been done. Dealers should not assume that employees know all the rules. F&I education is the first and most vital step towards building an ethical organization. After all, if employees don’t know or understand the rules, how can they be expected to follow them?
Contact KPA today for Sales and Finance compliance training for your team as well as F&I compliance audit services. You will be glad you did.