I’ve actually had salespeople and managers asking me to “Just have the customer sign this new Buyer’s Order but don’t mention the rebate”. Big ethical “no-no”. Consider the ramifications of a customer complaint afterward and the potential loss of their future business not to mention your reputation. *Payment Leg Yep, this dishonest practice still exists in some dealerships and shows no sign of receding anytime soon because the temptation is just too great to resist by those who don’t view it as wrong. If you work in a store that closes exclusively on payment-as most do-then you should be getting the deal with a fully disclosed rate, term, and payment that comports with the bank approval guidelines. But if the deal arrives $50 higher per month than the true base payment then it’s likely someone desking the deal has taken liberties to boost the payment leaving room for an FIM to use to his advantage. Sounds innocent enough. The customer is closed at an affordable payment and all you have to do is bump them another $20, include a handful of products, and you’re the hero. The customer thinks they got a VSC, GAP, PPM, etc. for only $20 a month. I’ve worked with customers from competing dealerships who balked at my VSC offering because they got a 6/100K for “only ten bucks a month” from the last store they bought at. F&I manager was quoted as saying “We have a special going on this month and can use a coupon”. *Straw Purchases As often discussed, and as many times as we’ve beaten this dead horse subject, one would think this fraudulent practice would have long since gone the way of the dodo. But just mention it on social media and a bevy of ‘opinions’ will surely follow as to exactly what defines it. More about that in a moment. This term and ensuing law were written to prevent purchasing a handgun for another party to use without their name on the registration. This is likely because the third party might have a felony conviction and unable to lawfully own one. While not originally nor directly attributed to auto financing, finance companies have borrowed the term and disallow third-party purchases for obvious reasons. It shouldn’t strike an odd tone with dealerships to believe banks want the driver of the vehicle to be financially obligated Back to dealer ‘definitions’. Because everyone is eager to see the next car across the curb, it can be easy to don blinders like Sargent Schultz of Hogan’s Heroes famous line “I know NOTHING!” But that doesn’t relieve you from your responsibility to the Dealer/Lender Agreement your dealer signed when he agreed to do business with them. Unfortunately, the ‘definition’ varies wildly but it’s generally understood to mean the driver of the vehicle should be on the contract. Yes, there are extenuating circumstances such as a child in college receiving full financial support from the parents. But knowingly omitting a 35 year old kid whose divorce adversely affected their credit and just signing the parents is going too far. Never forget that you’re the ‘eyes and ears’ of the bank as well as the dealer you work for. Yes, this places you smack in the middle between the sales department, the customer, the finance company, and your employer. But we’re not here to make friends and looking the other way. When these things arise, you have to object. And one more point on this subject, knowingly participating in a straw purchase deal is a fraudulent practice. And with a stretch, an investigator could add other charges though the likely scenario would have your employer buying the contract back from the bank. Even if the customer got educated at another dealer, your employer could still be required to repurchase it. This is why it’s smart to ask questions. When a 78 year old guy with a cane barely able to make it to your office accompanied by his 25 year old grandson insists he’s buying this new Mustang GT with a six speed transmission for himself. 7
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