David Robertson, Executive Director, Association of Finance & Insurance Professionals
One Size Doesn’t Fit All
Watch a couple of TV programs and you’ll likely catch at least one commercial for an online college degree. The boom in online training is true for our industry, as well. Given the emphasis on formal dealership CMSs, the ranks of online training providers are growing.
E-training can be a cost-effective and convenient instructional tool. However, it’s not a one-size-fits-all proposition.
Online training with self-testing – as a standalone method – appears to be conducive to human resources, occupational safety and administrative procedures. Areas where the focus is directed inward – the implementation of task-specific directives by individual employees.
F&I activities, on the other hand, are directed outward. In addition to the practitioners themselves, other people are key components of the compliance equation. Chief among them are hundreds of prospective customers, as well as funding source paper-buyers, aftermarket product service reps – and sales managers and vehicle sales personnel.
Simply being informed of the rules isn’t enough. F&I practitioners need to have a working knowledge of the rules – how they apply to day-to-day situations. Obtaining a mastery of this sometimes complex and nuanced information can only be achieved when online training is supported with live instruction in a classroom setting.
When an experienced instructor shares anecdotal real-world examples of how the rules apply in specific circumstances, responds to questions and engages students in discussion – it bridges the gap between rote knowledge and being able to apply that knowledge on the job.
Three other factors come into play. The first is the sheer volume of state and federal laws. The NADA-commissioned study, The Impact of Federal Regulations on Franchised Dealerships (used with permission), identifies more than 60 federal regulations applicable to dealership operations, of which a third apply to F&I.
Equally significant is the interplay between the federal and state regulations. For the most part, the federal regulations dictate what you must do – or cannot do. It’s left to the individual state governments to specify the actual terms, limitations, conditions and dollar amounts that apply under the corresponding federal rules. For example, TILA and Reg. Z mandate that the cost of credit shall be represented as an APR – but the individual states determine the maximum amount that can be charged. State regulation information is an essential element of F&I practices education.
Third, the F&I office is where the promises made during the vehicle acquisition, funding and owner indemnification processes are reduced to mutually-binding legal contracts. The documents must be properly prepared, disclosed, executed and disseminated. If a regulatory or ethical breach occurs, most often it is during the consummation process.
With the breadth and dynamics of the F&I process, coupled with the level of scrutiny it attracts, online-only training just isn’t sufficient. It requires a live classroom learning environment under the guidance of industry-savvy instructors. And, most important, a comprehensive exam administered under controlled testing conditions to ensure that each student has a verifiable command of the material.
This proven method provides the dealer with the best assurances that every income opportunity and customer need has been fully explored in accordance with the prevailing regulations and within the parameters of ethical practices. And it provides the dealer with the best defense possible in a worst-case F&I scenario.
Self-directed online-only training that culminates with a self-test certainly has its place – and there are quality providers available. But not when it comes to F&I-related state and federal regulation and ethical practices instruction. If you’re plying the F&I trade, you owe it to yourself to get the best education available.