As the dawn of Transport Month shifts South Africa’s focus to the role of transport in the country’s development, the National Automobile Dealers’ Association (NADA) is urging South African car buyers to leverage the expertise of the Finance and Insurance (F&I) Business Manager at dealerships to navigate the complexities of vehicle finance, a crucial milestone in unlocking economic opportunities for South Africans amidst a struggling public transport sector.
The F&I Manager acts as a one-stop-shop for all vehicle finance needs, streamlining a process that can often be daunting for consumers.
Although not a natural link to vehicle safety, the F&I also offers and advises on a range of vital additional products that are designed to assist in maintaining the car and often covering key safety items through products such as Service and Maintenance Plans and extended or boosted Warranties.
“The F&I Manager isn’t a salesperson,” says Brandon Cohen, Chairperson of NADA. “They are a registered financial representative on a Financial Services Provider licence, and a critical resource for every car buyer.”
This professional status means F&I Managers are held to strict regulatory standards, ensuring they act in the best interest of the customer. They are specially trained to handle all aspects of the transaction, which includes:
- Securing and Structuring Finance: The F&I Manager prepares and submits applications to multiple financial institutions, saving the customer the trouble of repeating the lengthy process multiple times. This service is especially vital in South Africa, where the average approval rate for vehicle finance applications hovers around a low 18% to an average of 45% depending on the geographical location. The F&I Manager is skilled at structuring the application to best represent the client’s financial position, which significantly increases the chance of success.
- Confidentiality and Convenience: All finance negotiations and document processing happen in a private, confidential setting. Because the F&I Manager facilitates offers from various lenders, the customer benefits from the convenience of comparing loan terms, interest rates, deposits, and various other options all at once. They can also be trusted with confidential personal and financial documents, as their processes are highly regulated and recorded through instruments like the Record of Client Advice.
- Value-Added Products: Beyond finance, the F&I Manager advises on essential value-added products and services that protect the investment.
Questions to Ask Your F&I Manager
While the F&I Manager will present all available options, NADA stresses the importance of buyers taking an active role by asking pertinent questions before signing any contracts.
“It’s easy to get caught up in the excitement of buying a new car, but it is paramount that buyers take the time to read their contract, listen to the product explanations and understand every detail,” adds Cohen.
NADA recommends that customers ask the F&I Manager the following key questions:
- Can you clearly explain the differences between the finance offers you have received from the banks, including interest rates, loan terms, and total cost of credit?
- What specific value-added products, such as shortfall cover or an extended plan or warranty, are you recommending for my vehicle and financial circumstances, and why?
- What documents will I receive that record the advice you have given me and where can I find the details for redress if the need arises?
- If I choose to cancel any of the value-added products later, what is the process and will there be any penalties charged by the product provider?
“Buying a vehicle is exciting, but don’t let the emotion of the moment overcome you. Use your F&I Manager’s expertise to your advantage. Take your time, read the contract carefully, ask the critical questions, and ensure you are happy before you sign on the dotted line. This due diligence is the best way to secure a seamless vehicle ownership experience, ongoing safety through regular maintenance and servicing and the added economic benefits it brings,” Cohen concludes.
