As professional trainers in the Automotive, Powers Sports, Recreational and Marine industries, it's our legal and moral duty to train and guide our dealers and managers down the road to legal compliance in the dealership. This type of training and guidance is what establish our worth to the dealer, establish that we are experts in our field, and forms an bond of trust with the dealer. Often times we find dealers out of compliance; knowingly or unknowingly, and we strive to learn more about the the wants, needs and challenges of the dealership, and if the dealership concerned about being legally compliant, how we can help correct the situation, reestablish legal policies in the dealership and ultimately get the dealership back to being legal again.
We often hear about dealers not being legal, getting fines, being sued and dealers and employees going to jail. But, how often do we hear about vendors or lenders no being legal or compliant? Well, it happens more often that you think, and it is happening today. I'm talking about aggressive lending practices that are talking place in dealerships nationwide, and being perpetrated by two major lenders. During a period of about eight years have run across a very disturbing tend that I consider to be unfair business practice and could be could be considered illegal. These two lenders; lets call them lender 1 and lender 2, are using there ability to buy loans from dealers; franchises and independent, to forcibly control which F&I products the dealership sells. In others words, These two lenders are using advance as a tool to force the dealership to selling the lenders vsc and gap insurance. Now, I have been told in almost every instance I have run into that is ultimately the F&I managers has the decision as to whether not to sell the lenders F&I products; however, if the F&I manager chooses not to, they have been told there call backs, advances will be cut back. For example, Lender 1 call back is for 125% of book with lender 1 vsc and gap, or 115% without lender vsc and gap. This example, tactic, is being played out all across the country today.
These business practices in my opinion are unfair. Dealers, lenders, vendors are all accountable for being compliant in today's consumer driven industry. Legal compliance and bidding by lending, insurance and RED FLAG LAWS are not an option. If this were happening in your dealership how would feel? What would you do about? How would stop it? What do you think?