Confessions of an Auto Finance Manager -

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Confessions of an Auto Finance Manager

A Former F&I Guy Explains How He Did


Part 3: Lessons From the Other Side of the Desk

Over the years, I put together a checklist of advice for my friends and family when they were going to buy cars. In most cases, my advice was simply what not to do. If you follow these 10 "don'ts," you should get out of the F&I room unscathed:

1. Don't agree to be a monthly payment buyer. If you do, you'll quickly lose control of negotiations and won't be able to see the real cost of the car.
2. Don't buy a car without first checking pricing guides such as's True Market Value (TMV®). Print out this information and take it with you to the dealership.
3. Don't buy the extended warranty. The bumper-to-bumper warranty will last for at least three years or 36,000 miles. The powertrain warranty will then cover all the things that make the car go down the road, often for up to 75,000 miles.
4. If you really want the extended warranty, don't buy it for the first price they offer. Markup is about 100 percent, so there is plenty of room for negotiating.
5. Don't enter the F&I room unless you have independent financing or you have recently checked your credit report and investigated what interest rate your bank or credit union offers.
6. Don't buy paint protection (it's basically just a wax job) or fabric protection or VIN etching. These add-ons are high-profit items for the dealership and you can buy them elsewhere if you decide you really want them.
7. Don't pass up GAP insurance (the term stands for Guaranteed Auto Protection) if you're leasing, unless it's already in the contract. And buy GAP insurance if you are making a low down payment. Remember, though, that the cost for GAP is negotiable.
8. Don't forget to run your monthly payment numbers using an online calculator to get a rough idea of what your car payment will be.
9. Don't believe the F&I guy if he tells you that you have to buy the extended warranty to qualify for low- or no-interest financing. It's not true.
10. Don't sign the contract because you "just want to get it over with." Take the time to verify all the essential numbers in the contract.

Next: Part 4: New Job, Same Issues for Shoppers

To find a dealership that knows how to treat shoppers right, please visit's Dealer Ratings and Reviews.

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