Stop Sign Shannon Robertson-Executive Vice President of AFIP For the inaugural issue, Shannon calls upon David Robertson-Executive Director of AFIP-to discuss what he sees as a troubling and potentially Aftermarket Product Sales…a proactive response to a festering problem threatening cloud is building within key Federal regulatory agencies due to concerns about dealer-offered A aftermarket products. These products were recently the focus of a consumer survey conducted by the Federal Trade Commission – often a precursor to additional regulation. The pivotal issues of the survey have to do with pitching and pricing. Questions abound such as; Are the products and services accurately presented as being optional and not incidental to the purchase or lease? Is the retail price paid commensurate with the value received? Fair warning, if you don’t have a written markup threshold policy in place that has been reviewed by dealership legal counsel – with documented oversight to ensure compliance – you need to get one. As for product pricing, it makes good sense to base the markup on a percentage of the wholesale price, rather than a fixed dollar amount, considering the wide range in wholesale pricing of products and the range of vehicle makes and models the products will protect. It would keep the retail price commensurate with the hard cost of the product or service. To provide guidance, NADA published Voluntary Protection Products: A Model Dealership Policy. You’ll need to create an account to download a copy. The Association of Finance & Insurance Professionals (AFIP) highly recommends the policy and includes it in the Certification Curriculum. Under the program, the dealership displays a notice informing customers that the value-added products are designed to protect the customer’s investment. The notice also states the products are voluntary options and not required to purchase or lease a vehicle. “Fair warning, if you don’t have a written markup threshold policy in place that has been reviewed by dealership legal counsel – with documented oversight to ensure compliance – you need to get one” NADA’s policy recommends placing the notices in the showroom, but I asked NADA for permission to place the notices in the F&I department, at the point in the ownership process where the benefits of the voluntary protection products are traditionally presented. In my view, a printed notice about protecting the customer’s investment is a good segue to a menu or selective aftermarket product presentation. NADA has agreed to the smaller notices. We have developed a desk-size placard and stand for use in the F&I department. It will be included with the Basic Certification Course and available for purchase. AFIP’s preemptive message to the regulators? We understand your concerns – and are educating hundreds of thousands of prospective buyers at the most effective point in their decision-making process. And certifying thousands of rule-savvy F&I personnel in the process. Listen, the best defense for keeping Federal regulators and new rules out of our stores is a consumer-friendly and regulatorily compliant offense. About the author – David Robertson is a 40-year veteran of, and aggressive advocate for, the retail automobile sales and F&I processes. He is a cofounder and the executive director of the nonprofit Association of Finance & Insurance Professionals. He has successfully defended the interest of the independent VSC industry in matters before the National Association of Insurance Commissioners and the IRS, appeared on ABC 20/20 and is widely quoted and published. He currently serves as a dealer advocate expert witness; the last two cases involved payment packing. David Robertson during his years as an F&I Manager. 5
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