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Essential Insights for Automotive Professionals
MARCH , 2013
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Motivating Salespeople for Increased Performance Creative ways of recruiting highly effective sales people Know your obligations as a Dealer Principal
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Motivating Salespeople for Increased Performance We expect salespeople to be self-motivated; but like everyone else, they have “down time” and “morning blues”, and the ‘up and go’ may not be all that good on some days. There are days when they seem completely lost just as there are days when they are on fire and no deal is too difficult to handle.
Creative ways of recruiting highly effective sales people
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Having a team of effective sales people is the key to a successful dealership. Top sales people are self motivated; they are consistent in delivering sales results, and generally afford you more time to develop strategies and plans to grow the business. Effective sales people also tend to stay longer with the business, and since they are focused on doing their job well, are also absent from office politicking and creating problems for the management team.
Know your obligationS as a Dealer Principal As a Dealer Principal, it is necessary that you know everything that goes on in your F&I office, especially the consequence when your F&I Managers to do not follow critical guidelines when dealing with customers. The responsibilities that comes with the role also imply being held personally liable for “malpractices” in your F&I office, especially the risk of massive fines and possible jail terms when F&I operators break or ignore the rules.
About Us Fusion Business Solutions is a performance-focused consulting group that offers a range of client solutions, including training, consulting and in-business coaching. We also operate a wholly-owned software division called Op2ma, which provides leading-edge web-based management and customer feedback tools. With our Head Office in Adelaide, Australia, we operate in most markets throughout Australia, New Zealand, the Pacific and Asia. We have offices in Melbourne, Sydney, Perth and Shanghai (China). Our philosophy is to offer our clients profit-enhancing solutions, which are both costeffective and innovative. With the business and retail landscape becoming increasingly more complex and challenging, companies must adapt and change, or risk falling further behind. Our clients see an ever increasing need to enhance skills and processes such as pro-active financial management and employee performance management.
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Motivating Salespeople for Increased Performance are the only motivators, both short term and long term, that move the sales person towards excellence.
Unless you are running a religious cult, you can begin by assuming that your sale employees are not motivated by opportunities to help you realise your goals and make your dreams come true. Sales people, like everyone else, are motivated by benefits and purpose, whether it is providing for their families, or a sense of personal achievement. They will show up every day to face rude customers for 2 reasons: to ensure that they and their families do not starve (both physically and emotionally) and to make their own dreams come true. These
Having identified these two key motivators is the first step towards improving your company’s sales performance, and one of the main goals of a sales manager is to make the salesperson want to do what the company wants them to do. Strategies for motivating your team Start each day with this timeless quote from Dale Carnegie: “You can get everything you want in life by helping others get what they want.” This powerful insight is as relevant today as it BUSINESS SOLUTIONS
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But what really drives sales people? What makes them get up each morning and face rejection after rejection after rejection, and still have the energy to come back the next day for more? Is it just for the money and recognition? Or the burning desire to overcome obstacles and win? Whatever it may be, as the sales manager, you have to know, not just what
motivates your salespeople but HOW to motivate them effectively if you are to bring out the best in them.
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We expect salespeople to be selfmotivated; but like everyone else, they have “down time” and “morning blues,” and the “up and go” may not be all that good on some days. There are days when they seem completely lost just as there are days when they are on fire and no deal is too difficult to handle.
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Essential Insights for Automotive Professionals
was in 1936 when “How to Win Friends and Influence People� was first published. It is a simple yet powerful concept that is as relevant for motivating sales people as it is for building empires.
it is clearly defined with steps within a timeline. Doing this will help you and them achieve clarity and purpose as well as an expected outcome. Here are some examples of how you might do this:
For sales people to be enthusiastic about your business objectives and goals, you first need to be committed to their goals. As a sales manager, you have to find a way to align their goals to yours, and one of the most effective ways to do this is for you to help them turn their dreams into achievable outcomes that they can be committed to.
1. Identify short-term rewards like buying a dream car or taking the family for a month-long holiday, then setting the conditions to achieve these. For example, to fund a 10-day dream holiday in Thailand (short-term goal), Jack will need $10K in additional commission which he can achieve in 3 months if he does what you want him to (Your goal).
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Once they have identified their long term goals, help them break them into short-term steps with a clear timeframe. A goal is just wishful daydreaming until
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2. Identify career objectives. Where does Nick sees himself in 3-5 years
(a promotion), and/or 5-10 years (becoming his own boss)? Then work with Nick to create a pathway towards to his career goals. Doing this enables the sales employees to sustain years of effort, making progress and moving closer to their ultimate objectives. 3. Use an open scorecard with meaningful incentives. On a day-today basis, this allows the individual sales person to achieve peer recognition in friendly competition with his or her teammates. It is important that these competitions take place in a supportive environment without the sales team deteriorating into cut-throat, backstabbing, individuals who will do anything to win.
Learn to tune in to the language of your salespeople; talk about their dreams, and align their goals to yours. Often, sales managers tend to focus on why the sales team isn’t selling more without considering how and why the sales person should want to do that. Instead, show them how by achieving more, they can achieve their individual goals in a win-win proposition. How to get salespeople to do better Employees do their best work when they feel good. Similarly, they perform poorly when they are unhappy. As a sales manager, do you have your sales employees’ happiness on your radar when managing their performance? Build up their confidence. Confident sales people will outsell those lacking in confidence any day. Give them the information and training they need to present your company well. Recognise that even the best sales person will hit a dry spell every now and then, so don’t beat them down just because numbers are slow for the quarter. Encourage them, help them get through rough spots, show that you understand. Show appreciation. While monetary rewards are important to sales people, acknowledging effort for an achievement is equally important. Too often, sales managers tend to criticise poor performance and ignore good performance. “It’s their job to deliver! It’s expected of them!” A few well-timed words of appreciation will not only reinforce the good behavior, it will go a long way towards building positive morale.
Make them feel needed. Most people like to feel that they matter; that they are making contributions as part of the team. One of the worst things to do is to treat sales people as if they are at the bottom of the corporate food chain when in fact they are some of the most important people in the organisation. Seek their opinion; ask them for help, and make them feel like they are truly a part of the team - not just expendable order takers. Create a nurturing work environment. Selling is a tough job, and as a sales manager, you can appreciate the effort and talent it takes to be a great sales person. You are also instrumental in setting the tone for the workplace. Are your sales people working as a team or are they stepping on each other to close a deal? Are they sufficiently equipped with the tools and training to do their job well? Are they supported by other departments, and protected from meddlesome managers and senior executives? Conclusion Motivation is not just linked to monetary compensation, though it is an important reason. Other reasons include a complex blend of personal ambition, peer recognition, and the desire for human interaction and appreciation. To ensure that they are motivated, sales managers must be a diagnostician, an encourager, an enforcer, a giver, as well as a mentor. You must be innovative and open to change. Your success depends on your employees achieving theirs. Thus you must keep them motivated through a blend of new and traditional ideas, ever changing but always effective.
Is FEAR a good motivator? While fear of starvation or losing one’s job can motivate a sales person to do amazing things, it is neither sustainable or desirable. Fear leads to unhealthy stress and resentment of those who inspire fear, and while sales people may achieve spectacular results as long as you have a gun pointing to their head, they will extract themselves from the situation when the opportunity presents itself. Fear also only works with those currently near the lower rungs of *Maslow’s hierarchy of needs. The moment basic physiological (food and shelter) and security needs are met, fear no longer motivates. In the long term, it will be social and psychological needs like friendship, peer approval, and self esteem that will bring out the best in each individual. *SOURCE: A Theory of Human Motivation (1943) by Abraham Maslow
We help you scale new heights As Australia’s leading provider of automotive training solutions to dealers, manufacturers and financiers, we help your employees help YOU achieve more. Call 1300 807 177 to find out how.
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How to recruit highly effective sales people As a Dealer Principal or Sales Manager, you know the importance of having a team of effective sales people: Self motivated, consistent in delivering sales results, and generally afford you more time to develop strategies and plans to grow the business. Effective sales people also tend to stay longer with the business, and since they are focused on doing their job well, they are usually absent from politicking or creating problems for the management team. They are helpful and positive; always presenting your company in the best light.
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Your company’s profitability also hinges on the overall effectiveness of your sales team. Effective sales people “sell the
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price” rather than sell through price, often protecting your margins instead of constantly asking for discounts to close the deal. They also deliver excellent customer experience which in turn generates referrals and repeat business. While hiring the right salespeople should not be left to chance, there are ways to improve your odds of finding the very best in the industry. This article explains how you can develop a process that will help put the most effective salespeople on your team. Meet-the-Family Session Invite sales applicants to your dealership for a visit. Explain that this is not an interview but an opportunity for them to get to know your organisation and
meet some of the key people. Consulting startup, I Love Rewards Inc., describes in an article for the Wall Street Journal that of the 1,200 applicants who were invited, only 400 actually came. While it is easy to put in an application, you may be surprised to know how many applicants are really interested enough to take the first step. This exercise identifies candidates who are truly interested in working with your company. This additional event wedged between submitting an application and the oneon-one interview can sieve out those who are truly interested from those who are just applying for the sake of applying. The process of self-elimination helps reduce the number of candidates that you have to go through to identify suitable candidates for interview.
You can also take this a bit further and set up various events or activities that will give you a better indication of each applicant’s personality, knowledge and passion for the industry. The idea of a group session is so that you and your current employees can interact with them in an informal environment. Actively court the best candidates When you come across an excellent candidate, let them know you want them. Sometimes, the best candidates are already employed and not actively looking to change their jobs. These are usually your dream hires, but you’ll never
You can do that by reaching out in a really personal manner to get their attention. Get to know them by researching their social profile on LinkedIn or connect with them on Facebook, send a personal note from the Dealer Principal or Managing Director. Look for potential candidates outside your industry Most dealerships focus only on industry experience when recruiting, hiring only those who have previously worked in the automotive industry as sales employees. When you do this, you miss out on all the other potential avenues where you can find excellent employees. One Melbourne-based dealership seeks out hotel concierges in 5-star hotels to work as sales employees, while another frequents car rally and motor sports events to find prospective candidates. While you can teach a new sales employee about selling the product, you can’t teach passion, good attitude, and a willingness to put in more than required.
Go beyond job fairs and job portals Since the best candidates usually already have a job, looking for great candidates at a job fair can be a waste of time and effort. Similar to looking outside the industry, find events that are not jobhunting related. This applies to online job portals as well. Look in forums such as http://australia. meetup.com/ for group events that are likely to be attended by people suitably qualified. Car clubs and bike clubs, motor racing forums, networking groups, etc... are all excellent platforms to meet potential candidates. Here, you will know that they are genuinely passionate about what they do, and you’ll get a feel of what they are really like as individuals - unlike when placed in a job interview situation. Use non-traditional media Most dealerships do not put much effort into creating a unique brand experience for a potential candidate or try to differentiate themselves from the other dealerships. The most common practice is to put an ad with a standard job description on a job portal or newspaper.
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Observe how they interact This is an excellent way to observe their character, level of interest, industry knowledge, and most importantly, communication skills. Have your managers and other sales employees mix-and-mingle with them to get a feel if they are a good fit with your corporate culture.
attract them without letting them know how much you want them.
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You can also use this opportunity to see how potential candidates interact in groups; one of the most critical skills to look for in an effective sales person.
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Implement referral incentives One of the most reliable ways to find good candidates is actually through a referral from a business associate or an employee. Getting people in your network to refer potential candidates usually outperforms traditional methods of hiring. The challenge is to constantly let everyone know that you’re looking, and maybe offer an incentive if they send a candidate your way and you end up hiring their referral: For employees, nonmonetary perks such as extra leave days or dining vouchers works well.
That won’t make your company stand out. And if you’re just like everyone else, why should top candidates bother investigating? A video or a podcast, at least for the moment, will set you apart from the rest. Using non-traditional recruiting media is also a chance for you to convey something about your corporate culture, differentiate you from other dealerships, and hopefully making you more appealing to the cream of the crop. Search for profiles on LinkedIn and other social networking sites. Instead of relying on applications from resumes through email, take control of the search. Prepare a list of qualities and search for candidates who have the criteria that you want for your sales team. Ask for referrals and access to new networks from your current networks to get the word out that you’re seeking first class candidates. You’ll not only be able to screen for excellent candidates, but you’ll also have a chance to learn a little more about them before the interview.
Advertise where top candidates are Consider focusing your recruitment message in places where your dream candidates may hang out, whether it is an outdoor banner along the dealership belt, or Google ads for keywords associated with your company or your competitor’s. Online communities are also good places to target your recruitment process at a specific demographic. If you’re looking for a proactive sales person currently working with a competitive brand, try searching for them in forums where they hang out to meet prospective customers and engage new owners. Consider past candidates If you have access to past applications, this may also be a good resource to find suitable candidates. While you may have passed over a good candidate for one reason or another, there is no reason why some cannot be groomed to be excellent sales employees. It can’t hurt to get in touch with them now to see if they’re interested.
Sales Performance Reporting like you’ve never seen before Picture this: Number of inquiries by models, closing ratio for the used car department, total gross for this quarter by sales employees, forecast for this month... All delivered to your PC or smartphone 24/7. No more spreadsheets or paper logs. For online demo, call 1300-807-177!
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Include a note in your e-mail signature or business card indicating that you’re hiring and what you’re looking for so that it is easy for your contacts to be reminded. Conclusion In the difficult task of recruiting high performing sales people, hit-and-miss methods based on traditional resume review, and the impressions created in a face-to-face interview, are no longer sufficient. What you need is a system or strategy to reach the best candidates in the market. They may already be working for your competitors, or in a completely unrelated industry. They may be fresh graduates who know nothing about the automotive industry, or veterans with decades of experience. The best way to find them is to look beyond traditional methods of hiring.
Know your obligations as a Dealer Principal The Financial Services Industry The rules governing the Financial Services Industry are broadly demarcated by three sectors: •
Guidelines - These are the general rules or principles about what is or isn’t allowed, and why.
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Procedures - These are established or official ways of doing something designed to help you stay within the boundaries of the law.
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Legislation - These are the laws governing the practices within the Financial Services Industry.
Currently, there are more than a dozen Acts, Codes, Guidelines and Regulations that affect the sale of Finance & Insurance in a dealership. The Business Manager that handles customers should have adequate and up-to-date training on what these are so as to operate within the guidelines. Do you know the Penalties? As a Dealer Principal, your obligations are covered by a wide range of legislation among which these are the more critical: •
NCCP - National Consumer Credit Protection Act
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Privacy Act
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AML/CTF (Anti-Money BUSINESS SOLUTIONS
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So what precautions can you take to safe-guard your business, your employees, and yourself ? What must you know to protect yourself and your business?This article highlights the key regulatory
requirements from various government agencies, and explains the principles behind these guidelines.
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Do you know everything that goes on in your F&I office? Are you familiar with the consequence when F&I Managers to do not follow critical guidelines when dealing with customers? The responsibilities that come with the role of Dealer Principal also imply being personally liable for “malpractices” in your F&I office, especially the risk of massive fines and possible jail terms when F&I operators break or ignore the rules. In this case, ignorance, on your part or those of the Business Managers can really hurt you and your business.
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Laundering and CounterTerrorism Financing Act 2006) •
PPS - Personal Property Securities Register
•
FSRA - The Financial Services Reform Act
Knowing these, and how they can affect your dealership, is your first duty as Dealer Principal. It will also help you stay in control of your F&I operations to prevent legal actions by eliminating or arresting bad practices. The main consideration arising out of this legislation is outlined in the following: National Consumer Credit Protection Act (NCCP) The NCCP covers credit protection for personal, household or domestic, and residential investment purposes. The Act serves to introduce the concept of “responsible lending” to those who sell F&I to their customers, and the subsequent civil and criminal penalties when there are breaches.
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Dealer Principals should leverage on
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technology to help monitor the activities of their Credit Representatives within the dealership. These systems, like Op2ma’s Finance Accelerator, should be capable of doing the following effectively and efficiently:
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Anyone who aids or abets an offence, whether directly or indirectly, can also be fined.
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Serious breaches also put the Financiers’ credit licence at risk.
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Aggregate and monitor operational processes to identify issues.
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Combine in-office audits with frequent observations of the behaviour and activities of Business Managers or your F&I operations.
If the Credit Provider is held liable for damages relating to a warranty, customers can seek compensation from the supplier and/or a penalty can be imposed.
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Misleading or deceiving a customer can attract up to A$1,100,000 in fines for the company.
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Include a standard set of procedures and policies for Business Managers, and ensuring that they adhere to them.
The failure to meet NCCP guidelines could lead to hefty compensation for the customer, avoidance of contracts, and enforceable undertakings such as: •
Fines of up to A$220,000 for individuals and A$1,000,000 for companies with up to two years imprisonment for accountable staff.
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Civil penalties of up to $500,000 for each breach.
Privacy Act The Privacy Act essentially serves to protect the privacy of consumers, and covers all areas of information relating to people and what is done with information about them. It is put in place to ensure that businesses do not abuse or misuse the personal information of their customers gathered in the course of a transaction. Essentially, the underlining principle is that when you collect information from your customers, you are ultimately
responsible for the following: •
How the information is collected
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What information is collected
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How the information is used
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How and where the information is stored
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Who has access to the information?
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And how personal information is corrected and updated?
Fines relating to breach of the Privacy Act vary depending on the severity and number of breaches. These can be up to A$220,000 for individuals and A$1,000,000 for companies. Unsigned Privacy consent forms can attract up to a A$50,000 fine for each instance with no maximum penalty. Anti-Money Laundering and CounterTerrorism Financing Act 2006 (AML/CTF) This act was put in place to prevent the proceeds of crime and other illegal activity from entering or being passed through the Australian financial system. It is designed to identify, mitigate and manage money laundering and terrorism financing risk by detailing the requirements for customer identification. The AML/CTF Act imposes a number of obligations on reporting entities when they provide designated services:
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Customer identification and the verification of identity
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Record-keeping
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Establishing and maintaining an AML/CTF program
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Ongoing due diligence and reporting (suspicious matters, threshold transactions and international funds transfer instructions)
Due to the possible international effect of these laws, there are both civil and criminal penalties for all involved. Criminal offences include imprisonment for up to 10 years and fines of up to A$1,100,000. Civil penalties can be up to A$2,200,000 for individuals and A$11,000,000 for Companies. Personal Property Securities Register (PPS) The legislation that established PPS reform is the Personal Property Securities Act 2009. The PPS Register is administered by the PPS Registrar, whose office is within the Insolvency and Trustee Service Australia (ITSA). The Register is the central part of PPS reform. A search on the PPS Register will enable a consumer to find out whether there is a security interest registered against personal property that is over A$5,000 including boats, cars, artwork, collectables, etc... The Financial Services Reform Act (FSRA) The Financial Services Reform Act (FSRA) is a Federal legislation introduced to bring various financial
services and products under one licensing regime. It introduces a new disclosure regime for most financial products and establishes a standard of conduct for financial service providers. The key objective is to increase the level of compliance and competency in the financial service industry. The FSRA covers issues such as pressuring customers to buy insurance, maximising commissions to the Dealerships, and providing a standard dispute resolution process. The risk of a breach comes about when a Business Manager offers advice to a customer on products they should buy, or when they choose not to offer products to customers because the commission is too little. These breaches carry heavy penalties that you must be aware of as Dealer Principal. Individuals can be fined from A$5,500 to A$22,000, and serve up to 2 years in jail. Companies can be fined from A$110,000 to A$1,000,000. Conclusion The extensive knowledge needed to be compliant with all legislation relating to a dealership can be overwhelming for a Dealer Principal, but not knowing it inevitably increases the risk of breaches that can lead to hassles, fines and jail terms for the Dealer Principal. While installing F&I Managers that are trained and trustworthy reduces the risk, having a good handle on what goes on daily within your F&I office begins with knowing what to look out for and how to manage it, minimising your exposure to lawsuits and penalties.
Grow your F&I profit today!
Australia’s best F&I selling system from only *$49/mth.
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“We investigated many options over a 3-year period, and several had some great features but none could match the complete features found with Finance Accelerator from Op2ma.”
Greg Motley Group F&I Manager Smith Motor Group (18 locations)
* Based on single-user account. Price excludes GST. Setup fees apply,
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• Calculates all commissions • Adapts to your needs • Optional link to Pentana Solutions • Add multiple insurers and financiers
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• Web-based 24/7 accesss • iPad compatible • Tracks all quotes • Add your company’s logo
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Know Your Obligations as
DEALER PRINCIPAL A short online course designed to help protect you against the liabilities of bad F&I practices.
ONLY $75 (incl. GST) As Dealer Principal, it is absolutely necessary for you to know what’s going on in your F&I office. You don’t need to know EVERYTHING, but you should be aware of what may happen if you don’t! DID YOU KNOW...that as the Dealer Principal you could be held personally liable for what happens in your F&I office? That you are open to the real risk of financial hardship and jail term if your F&I operators does not follow the rules? Did you know that “I didn’t know” can really hurt you and your business? Know your obligations is a short online course for Dealer Principals that provides the following:
A basic outline of the key rules governing F&I
What to look out for to reduce the risk of liability
What your Dealership is accountable for
Links to Government sites for more information
PLUS a Dealer Principal checklist that you can use to instantly audit your F&I department to ensure compliance!
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