Page 4 - MIADA-Q1-2022

Tips to Stay Compliant

During F&I Presentations

BY JEREMY BECK

Today, more than ever, it's critically Your dealership could be subject to Warranties are a great value add that gives
important to train dealership staff to give state and federal enforcement action, your dealership a competitive advantage and
consumers the right information in a potentially unfair and deceptive practice provides customers with peace of mind and
compliant manner. The best way to ensure claims, and potentially be held liable higher levels of customer satisfaction.
that your staff maintains compliance is to cover repair costs. Scare you? It
through proper training. In addition, take shouldn't. It should help you ensure that However, sometimes staff will use the
the time to sit and listen to sales and F&I you and your employees are using the word “warranty” when referring to a VSC
presentations. The most common mistakes correct verbiage and terminology when because it’s a commonly used word that
we see, and where staff need the most properly describing products to the the average consumer understands. Using
training, are as follows. customer. It's no different than telling a the wrong word in this situation can lead
customer the car is red when it's yellow or to big misunderstandings, especially if
USING THE TERM ‘WARRANTY’ that it's a premium trim model when it's the consumer walks away believing that
INCORRECTLY a mid-range trim model. The difference something on their vehicle is covered that
is knowledge. Knowing what you don't isn't. Ultimately, this results in higher
Sometimes salespeople use the word know, but will be held liable for, is critical. levels of customer dissatisfaction and bad
“warranty” when referring to a vehicle reviews for both the dealership and their
service contract (VSC). This is a definite It is becoming more common F&I product vendor, as well as the potential
no-no. If the word “warranty” is in the for independent dealerships to federal violations I mentioned above.
product, the dealership is not legally
allowed to sell the product to the consumer offer warranties with vehicles During F&I presentations, it's important to
— warranties must be free of charge. This that have a certified pre-owned clarify the difference between a warranty
violates the Magnuson Moss Warranty Act (CPO) status. and a VSC so the consumer does not think
to interchange the words “warranty” and they are getting a warranty when they
“service contract.” purchase a VSC, or vice versa, when the

4 | MIADA MISSISSIPPI DEALER Q1 2022