I started in the business less than a decade after Pat Ryan invented the autonomous F&I department. My initial F&I training lasted 15 seconds: “Dave, this is the book for computing the finance charge for installment sale agreements. If the customer looks smart, use the lower APR table on page six. If not, use the table on page 12.” The term “disparate pricing” wasn’t in anyone’s lexicon.

Later, I wrote the curriculum for F&I manager training offered by an insurance company. As a business tip, I told students, “After disclosing an installment sale agreement, place it in an envelope and staple it. Then tell the customer to put the envelope in the car’s glove box and never take it out.”

The exuberance of youth often blurs the line between right and wrong at a time when multiple tests of acceptable behavior present themselves. It’s like pre-vaccine mumps, chicken pox or other childhood diseases — hardly anyone comes away unscathed. Which begs an occupational recitation of 1 Corinthians 13:11: “When I was a child, I thought as a child…. But when I became a man, I put away childish things.” 

Most of us, with the exception of a few business sociopaths, quickly realized that success lies in knowing and following the rules. It’s clear the big money in F&I comes from solid income-per-retail-unit performance, coupled with low charge-backs and working as part of a sales floor, desking and sales management team. 

Up the ladder, dealers committed to equitable practices rank among the most stable and successful long-run players in their market segments. Those bent on capitalizing on unacceptable business practices are often cited in consumer complaints or regulatory action. As a group, they are responsible for tighter regulations.

I spent much of my career in the early — and often tumultuous — years of the vehicle service contract (VSC) industry at the third-party administrator (TPA) level. Administrator failures were so frequent, one news organization created a recurring title — Contract Casualties — to head stories about yet another TPA debacle. Cautionary tales of what happens when you don’t do the right thing.

A TPA owner once told me, “You might know more about the VSC business than me, but I can pencil-whip (finesse) figures better than you.” He did — and went broke with the snookered insurance company absorbing $100 million in claims. Another TPA founder said, “You shouldn’t be in business if you don’t have a little larceny in you.” He had more than his share; the president of the company underwriting his program got fired, the company failed, and all of the administrator’s employees lost their jobs.

But this story is about the survivors. The TPA who watched his pennies, consistently supported his dealer clients and stayed the course was richly rewarded for a job well done. It wasn’t about the money; it was about doing the right thing. Happily, he is one of many examples of VSC industry TPAs and general administrators (GA) who warrant the respect and reward they earned by doing it right.

Our organization has been certifying dealership personnel in consumer regulations for almost 30 years. Almost to the store, AFIP’s dealer clients have made regulatory compliance and equitable dealings a top priority. They maintain stable sales and F&I staffs, and they benefit from a continuous flow of repeat customers. Even in the recent down market, these dealers are flourishing while shady operators are hurting financially or hunting for a buyer.

When I began my career, the pendulum was starting its swing toward increased regulatory oversight. As my tenure as executive director winds down, it’s clearer now than ever before that if all of us had done the right thing, the pendulum would be where it should be: dead center. Unfortunately, the miscreant acts of a few F&I practitioners and dealers have propelled its momentum toward a dangerous extreme — intensive regulatory scrutiny and more invasive laws — to the detriment of us all.