F&I and Showroom, December 2015

34 F I and Showroom December 2015 D ont let the title fool you as this isnt the usual holiday fare In fact you may strongly disagree with who and what I count among the industrys blessings But let me explain why you shouldnt See I believe we should all be thankful for the state and federal regulators who establish the rules we are required to follow and monitor our actions We should also be thankful for the lawyers who prosecute those who break those rules Bah humbug you say Consider this If it werent for this troika the F I process and the retail automotive industry as we know it would not exist Even the most ardent proponents of free enterprise recognize that it cannot serve the needs of all involved without rules oversight and the presence of an overarching authority That hasnt always been the case Technological advancements between 1820 and 1870 stoked the embers of free enterprise in the United States However it was the ruthlessly powerful industrialists of the late 19th century who capitalized on and exposed the flaws of unbridled capitalism The Progressive Era between 1900 and 1917 saved capitalism from itself The federal government dismantled the powerful trusts and regulated the railroads and other key industries Yes imperfections inherent inequities and personal and institutional biases continue to exist And at times the interplay between the state and federal governmental bodies and the icons of capitalism has been rancorous but we do enjoy an economic engine and standard of living that ranks in the upper echelon of the worlds economies Thats why the three aforementioned government generated touchpoints in the auto industry warrant our thanks For those working in the F I box whether the rules oversight and legal repercussions are a blessing or a curse depends on whether youre being naughty or nice The naughty should be mindful that the Consumer Financial Protection Bureau CFPB Federal Trade Commission and state attorneys general are in the process of performing what they believe is a long overdue high colonic on every facet of the retail automobile industry Evidence suggests that their forays will extend well beyond the usual suspects of noncompliant advertising and prima facie scams A case in point is the CFPBs pursuit of disparate buy rate practices though recent revelations suggest theres a lack of empirical data to justify the initiative and nebulous methodology for gauging discrepancies Another is the bureaus interest in subjecting aftermarket products to a retail cost consumer benefit analysis On a broader front action is being taken against dealers who pack payments Its a passé practice that negatively impacts new and usedcar gross and rarely translates into a deal closing spur for the customer It also exposes the store to regulatorinitiated administrative action with the potential for unfair deceptive or abusive acts or practices claims filed by disgruntled customers If anyones looking for a New Years resolution dropping payment packing should be first on their list If theres a blessing in any of this its that the car buying public will benefit from the federal and state actions against errant dealers How Well a significant number of consumers will enjoy an improved car buying experience with the decline in nefarious practices both in dealerships responding to legal or administrative action and stores in which the operators were scared into changing their ways Reports of unscrupulous dealers being identified and summarily dealt with will also strengthen consumer faith in franchised dealer transactions Yes there will always be dishonest operators and F I practitioners wholl consider it a blessing they didnt get caught and their duplicitous dealings will continue until inevitably they are exposed The good news is the in depth coverage in the popular press accorded illegal dealer activities will put prospective buyers on alert and educate them about specific practices that work to their detriment However if you have a working knowledge of the state and federal rules are well versed on product knowledge and solicitation techniques and maintain the ethical bearing to structure deals to the benefit of all involved you will be blessed with the personal and pecuniary rewards that come from doing it right David Robertson is the executive director of the Association of Finance Insurance Professionals AFIP Email him at david robertson@ bobit com The AFIPs executive director gives thanks to the regulators and the regulations they enforce He explains why dealers should do the same By Dave Robertson Tis the Season to Count Our Blessings AFIP