Over the past few years, you’ve probably heard a lot about the importance of documenting your processes. Even with the changes at the CFPB, this importance is not diminished. Remember, the CFPB does not have jurisdiction over most dealerships (except Buy Here Pay Here). State Attorney Generals, the DOJ, and the FTC do. And, these government bodies haven’t undergone significant changes.
Therefore, if you haven’t already begun the process of documenting your processes, it’s time to get that project started. I’ve spoken with a lot of dealers who thought documenting processes would take an investment of thousands of dollars and a legal team. This does not have to be the case. It simply starts with taking a process that your team completes every day and writing down the steps.
Of course, with the numerous, ongoing processes in a dealership, not everyone knows where to begin. This is especially true for those processes that are simply just part of the routine. Many dealers haven’t even conceptualized how to define them beyond, “just do it”.
Just like with any big project, think about tackling this project one bite at a time. Start with the checklist on your deal jackets. Define and write down the process behind each item on the list. Each process should consist of three components:
- What you do
- Why you do it
- How you do it
Here’s a good example of a defined process:
- What: we verify the insurance of every potential buyer.
- Why: to protect the dealership and the eventual lender from the risk of potential liabilities to people and property.
- The salesperson will inform any customer that we need proof of insurance to protect the dealership from liability.
- The salesperson will verify the dates to ensure the insurance is still valid.
- With insurance in-hand, they will make a copy to include in the deal jacket.
- The F&I Manager double-checks that the insurance is included in the deal jacket and verifies the dates once again.
- Accounting also checks the insurance information is valid and checks the deal jacket checklist, showing completion.
It’s important to note that no one is asking dealerships to all abide by the same processes, rather to simply write them down. Every dealership has their own way of doing things and that is perfectly fine, as long as it is compliant.
For example, one dealership might have an identity theft policy to photocopy a driver’s license at 200%. Another might ask for multiple forms of identification. Each dealership has their reasons for utilizing their different practices, making each practice valid for each, individual dealership.
Once all your processes are documented, your dealership will actually be in a better position to set team-member expectations. The exercise itself could uncover inefficiencies, where a small tweak to the process could potentially cut the time it takes to complete a task in half.
By taking the time to document, train and audit your processes, your dealership will be set up to complete all the tasks in a vehicle purchase the right way, the first time. This results in saved time and in creating a better experience for the customer. The last thing you want is for your team to come across as unprofessional, by making statements that start with “We need you to come back”.
In addition, with documented processes in hand, training and auditing your team will become much simpler by fostering knowledge and personal accountability.
Don’t think you have to tackle these hurdles alone. With our AFIP-certified field team, we understand compliance at EFG Companies. Let us perform a compliance audit and help you implement the compliance procedures you need to stay profitable in the years to come with advanced training, product development, and consultation. Contact us today.