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Kink or No-Kink

There’s no room for 'kinkiness' in the F&I department.

February 1, 2024
Kink or No-Kink

Once a kink, usually always a kink. The only cure is to kick kink from the organization.

IMAGE: Kampus Production

4 min to read


During our increasingly less frequent family get-togethers, we sometimes like to play cards. Growing up as a military brat, bridges were blown up, not played. Instead, we play Rook. Or Hearts. Or Uno.

It doesn’t matter which family or which game, the players can be divided into two camps. The majority of us are in the play-by-the-rules camp. A minority needs to be watched, as they love to stretch, bend or obliterate the rules. We in the majority know we can’t fix kinks, but after all, they are family, so we keep them around. We know we can’t change them; we watch them closely.

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In our business, we kinda play a game of “Kink or No-Kink.” Fortunately, we don’t have to keep the kinks around.

During our recap meetings with dealers, we can usually divide our findings into one of three categories. The first category are those issues that are caused by not knowing. These issues can be corrected through training. The second category is a doing issue. The managers know to do it and how to do it; they just choose not to do it. Motivation and potential disciplinary action usually fix this issue.

The third category is caused by being a kink. Once a kink, usually always a kink. The only cure is to kick kink from the organization.

Knowing or Doing

Knowing or doing issues can also be thought of as being naïve, being lax, being lazy, which create their own special set of issues.

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For example, when a deal is started in the dealership’s dealer management system, it is assigned that day’s date. If the vehicle is delivered on a subsequent date, or the deal is recontracted later, the system does not update the date. If the F&I manager does not change the date on the deal, all the documents are effectively backdated. This can cause potential truth-in-lending violations or incentive qualification issues.

The reasons for these potential issues are that the F&I manager either did not know to change the date (naïve), was in a rush to get the deal completed (lax), or just didn’t feel like doing it (lazy).

The fixes are to either provide training so that the F&I manager knows better, or provide counseling so that the F&I manager knows that she better.

Kink or No-Kink

Similarly, being a kink creates its own special set of issues.

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  • A kink will give the customer a raise or a promotion when transferring the credit application information from the source credit application to Route One or Dealer Track.

  • A kink will lie to the bank about how the subcompact car grew a moonroof.

  • A kink will falsify the amount of cash down payment on the contract so that the transaction fits within the finance source’s underwriting guidelines.

  • A kink will knowingly orchestrate a straw purchase.

  • A kink will tell your customer that the finance source required a GAP policy.

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  • A kink will sign a customer’s name to a document when he neglected to get it signed while spinning the deal and does not want to get the customer back in.

Any of these things that a kink will do can put a dealership in harm’s way.

Forgery is a crime. Dealers have had to face the local “News on Your Side” camera when their employees were accused of forgery. Or cringed at the sight of their name in the local paper’s headline next to the word forgery. The market backlash can be extensive and the locals’ trust shot.

Bank fraud is a crime. When your employee commits, or tries to commit, bank fraud, the dealership’s name is listed on a secret Suspicious Activity Report that your federally insured finance source is required to file with the Federales.

By requiring an F&I product, your kinky F&I manager is violating the federal Truth in Lending Act if she does not include the premium in the annual percentage rate calculation. Too many of these situations could create a class-action lawsuit against your dealership.

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I don’t profess to be an HR expert, and you should consult with yours before brooming a kink, but I really don’t see any other way to fix one. There have been numerous instances where we uncovered kink at a client, and the client rid itself of the cancerous kink. Shortly thereafter, we conducted a review at another client in the same city that has hired this kink, and we find the same issues as before.

You just can’t fix kink.

Good Luck, Good Health, and Good Selling!

Gil Van Over is executive director of Automotive Compliance Education (ACE), founder and president of gvo3 & Associates, and author of “Automotive Compliance in a Digital World.”

Originally posted on F&I and Showroom

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