Phone: 630-495-2282 Fax: 630-495-2260 Map/Directions

Dealership operations: F&I menu presentation

November 24, 2010

There are a variety of ways to ensure that the presentation and pricing of optional F&I products, like service and maintenance agreements and insurance programs, are consistent with every customer. Each dealer must choose a presentation method, consistent with applicable laws. A current trend among some dealers and consultants involves a menu-based approach. Menu presentation is intended to introduce the products and services in a methodical, comprehensive manner, with all customers getting a consistent description and pricing of the products and services. A thoughtfully prepared F&I product menu, combined with appropriate personnel training, can reduce the chances of a misleading product presentation because it imposes discipline on the selling process.

Although menu presentation methods vary, the general idea is to describe each product or service separately, following along a printed "menu," and to state a price for each. The customer then can make an informed decision about which products to purchase, and order them using the menu. Dealers and F&I managers must understand that F&I menus do not automatically assure legal and ethical compliance. Failure to exercise proper care in preparing the menu and training those who present the menu can attract significant liability exposure.

Therefore, any dealership interested in using a menu-based approach to F&I sales should consult an attorney who knows the various consumer protection and finance-related laws applicable to F&I products. And, although business advisors can be very helpful, dealers should not rely solely on their assurances that a particular menu approach is legally sound. Dealers should consider the following when adopting a menu presentation:

1. The menu and related oral presentation must not be deceptive or unfair to the consumer. (An attorney can help apply those legal terms to state and federal laws.) 
2. The description of products on the menu must be accurate and provide sufficient information for the customer to make an informed choice. 
3. The customer must be informed that he has the ability to purchase each product separately, even if product packages are offered. 
4. The price of each product must be listed separately and individually; it is insufficient merely to list the total monthly payment or package pricing. 
5. The sale or financing of a vehicle is not contingent upon the purchase of any F&I products. To suggest in any way that such a contingency exists would be considered a deceptive practice and likely would result in a violation of the Truth-in- Lending Act. 
6. Legal counsel should review all forms and waiver statements for compliance with all applicable state and federal laws and regulations. The F&I department's impact on both the customer and the dealer's bottom line requires that F&I managers and staff act with the highest level of integrity, according to an NADA bulletin, "F&I 101: Selling to All Customers." The NADA bulletin can be ordered by calling 800-252-6232 ext. 2. Cost is $2.50 for members or $5 for nonmembers of the National Automobile Dealers Association, plus shipping.