F&I Menu Presentation

F&I Menu Presentation

F&I departments offer a variety of optional products and services that are completely separate from vehicle financing. Such products may include, for example, service and maintenance agreements and insurance programs. There are a variety of methods to ensure consistent presentation and pricing of these optional F&I products to each and every customer. Each dealer must make an individual choice, consistent with applicable laws, of the method of presentation. A trend that is currently popular among some dealers and consultants involves a menu-based approach to presenting such non-finance F&I products and services.

Menu presentation is intended to introduce the products and services in a methodical, comprehensive manner, with consistent description and pricing of the products for all customers. A carefully and thoughtfully prepared F&I product menu, when combined with appropriate personnel training, can reduce the chances of misleading product presentation, because it imposes discipline on the selling process.

Although menu presentation methods vary, the general idea is to describe each product or service separately, following a printed menu, and to state a price for each product. The customer may then make a well-informed decision about which products to purchase and order from the menu.

Dealers and F&I managers must understand, though, that F&I menus do not automatically assure legal and ethical compliance. Failure to exercise proper care in preparing the menu and training those who present it can result in significant liability exposure.

Accordingly, any dealership interested in employing a menu-based approach to F&I sales should consult with an attorney who is knowledgeable about the various consumer protection and finance-related laws applicable to F&I products. Although business advisors can be helpful, dealers should not rely solely on their assurances that a particular menu approach is legally sound.

The menu and related oral presentation must not be unfair or deceptive to the consumer. (Your attorney can help you with application of these legal terms under your state law and federal law.)

The description of products on the menu must be accurate and provide sufficient information for the customer to make an informed choice.

The customer must be informed that he or she has the ability to purchase each product separately, even if you also offer packages.

The price of each product must be separately and individually listed; merely listing the total monthly payment or package pricing is insufficient.

The sale or financing of a vehicle is not contingent upon the purchase of any F&I products. To suggest in any way such a contingency would likely result in a Truth-In-Lending Act violation, and be considered a deceptive practice.

Legal counsel should review all forms and waiver statements for compliance with all applicable state and federal laws and regulations.

The impact of F&I on both your customer and your bottom line requires that F&I managers and staff act with the highest level of integrity. The above was excerpted from NADA Management Bulletin SL.34, F&I 101: Selling to All Customers. You can order the bulletin from the National Automobile Dealers Association (NADA) by calling 800-252-6232, ext.2, or 703-821-7227. The cost is $2.50 for NADA members and $5.00 for non-members, plus shipping.