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Using Disclosure to Your Advantage

By: George Angus

Using Disclosure to Your Advantage

Those of you I have worked with, or who have attended our training, have heard me say over and over again that we use honesty and full disclosure as a strategy with the Package Option method. And the more I work with the top performers, the more I realize that this approach is more than just a concept. In fact, it has turned out to be one of the most effective F&I techniques we have ever identified.

First, a little background. Back in the early 1990s, when we were developing the first F&I menus and experimenting with, and testing the F&I menu concept, one of the areas we spent a lot of time on was making sure the menus and processes we developed, and the training we provided in their use, stayed well within the FTC and the Attorney General’s compliance guidelines. Since there seemed to be a lot of differing opinions from the “experts” on what those guidelines actually were, we went directly to those enforcement agencies for advice and clarification of the rules. We then applied their recommendations to the Package Option process.

Because of that, we designed the Package Option process to work with a “bare” payment quote from the sales department. Then, to insure there was no “payment packing”, we built a step into our process, whereby the F&I manager, in the first 30 seconds with the customer, makes sure that the terms of the deal are fully disclosed and understood, then, immediately verifies that the base payment was properly quoted using the exact “written disclosure” that the sales department used to quote the payment.

As you can imagine, we initially met with some resistance from some sales departments to this approach. Many of them had been trained in the old school method of starting the customer with an inflated payment, allowing them to negotiate it down, getting an agreement based on payment, and because the payment was “loaded”, they negotiated away F&I products, not gross profit.

But once we began doing that up front full disclosure, measuring the results, and using this approach in dealerships around the country, some very interesting and surprising things started to happen.

First, we found that as the sales process and the presentation of the F&I manager became more honest and up front, the customers were choosing more products and the F&I departments were making more money. And the increase was significant. And today we tell F&I professionals to, not only begin the F&I process by disclosing the base payment and terms, but to put an emphasis on that disclosure.

You see, when a customer is buying a vehicle, they are understandably wary, skeptical and on the defensive. Why wouldn’t they be? What have they been told by every media source out there is going to happen to them in a car dealership?

Sales professionals have learned how to deal with this natural resistance by developing rapport with the customer, using a feature benefit presentation, and justifying the price of the vehicle by showing value to the customer.

However, F&I is a completely different process than selling a car. If they stay in that frame of mind during the F&I process, the job is much tougher. What we have learned is that to allow the F&I process to evoke the positive, security driven motivators that get people to buy F&I products and create top performance, the F&I process must be perceived by the customer as a separate, isolated function from the sale of the vehicle.

To create that atmosphere, there must be a systematic process and sequence of techniques, the first of which is the disclosure. You see, when the customer starts to view us as someone who is making sure they know what they are paying for the vehicle, are openly and transparently reviewing their options, and has their best interests in mind, they begin to shift from a resistant mindset towards a more receptive and less wary view of the F&I manager and the process.

The result is that the customer doesn’t feel threatened and will take a more open and receptive look at the options we present. This also leads to a completely different view of the F&I process in the customer’s mind. One of the things dealers comment on when they start using this process is that customers actually compliment them on the F&I process rather than complain about it. And this certainly reflects itself on their CSI questionnaires.

Using full disclosure, right up front, is an integral part of the process because it makes the whole thing easier for the F&I manager, and produces, by far, more income, enhances the customer’s experience and, as an added bonus, you never have to worry about someone saying you weren’t honest or that the proper disclosures weren’t being done. You’ve got it in writing in every deal jacket. Not because you have to, but because it’s part of your strategy.

Using Eye Contact
How else can we develop credibility given those preconceived notions? Eye contact. Why is this so important? The connection between eye contact and credibility is well established. A University of Miami study, specifically designed to measure the impact of eye contact on credibility, found that, “Eye contact enhanced both listener comprehension and speaker credibility. Posture had little effect on either credibility or comprehension; varied or limited vocal inflection had no significant effect and differences in vocal inflection did not affect listener comprehension. The only factor that showed to be significant in establishing credibility was eye contact.”

Obviously, this is an important technique that we want to remember.

During the initial disclosure, ask the customer, “Is that correct?” or “Is that what you agreed to?” While you wait for their answer, make eye contact. What’s important here is that you not only wait for their acknowledgement of each of the elements of the sale, but that you make eye contact with the customer, or each of them if there are more than one, as every element is agreed to. Now you don’t want to give them some ogling stare that looks weird, just establish normal eye contact. The way I suggest you work on this is by doing a little practice with a fellow F&I manager or even your spouse or someone that is familiar with your natural way of speaking.

Be sure they tell you it looks natural.

Incorporating these simple techniques into the first minute of the process produces an amazing difference in how the customers react to the rest of the presentation.

This article was written by:

- has written 16 posts on Agent Entrepreneur.

George Angus heads the Team One Group, a research and training company that specializes in scientific, research-based program development and training programs for the automobile industry. George has trained thousands of F&I managers and his popular "Saturday Morning Messages to F&I Masters™" has over 8,000 subscribers.

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