Quoting Rate and Payment
Some Surprising Results
by George Angus

One of the most frequently asked questions we get from both F&I and Sales Managers is; Who should quote the rate and
payment to the customer, and when?
We did a study into this area and were quite surprised at the results. Our research philosophy is a simple one. We
address each issue and area with no preconceived ideas. We simply measure the results of different techniques and
methods, develop a training program, and share them with our dealer partners.
The quoting of rate and payment was one of the most controversial areas we have ever worked with. Very competent,
even brilliant, professionals in the business seem to hold strong views in this area. The problem is, however, that many of
these top performers disagree radically as to the best method and technique to use. Because of this disagreement, we
conducted a study of top performing dealerships and the results are reported below. Many of you will not agree with our
findings. That’s OK. This study deserves your attention, however, because facts are facts and this information may be of
great help to those of you who face a problem in this area.
There are many ways that a payment can be quoted to the customer. As we looked at these different techniques it
became immediately clear that more and more customers are buying cars with the payment as the major decision factor.
This makes it imperative that the payment becomes part of the actual sale of the vehicle. It also became clear that the
salesperson must be able to quote the payment. Customers express a very negative opinion of the sales process when
the payment question is not answered quickly and honestly. Customers were very astute at recognizing any attempt to
avoid this question. Therefore, we need a method that allows for the salesperson to deal with the payment question
immediately. Even though this idea goes against much of the conventional wisdom, the results are overwhelmingly in
favor of a system that allows the salesperson to quote payments. The question is how do we do it?
The best results came from using a method we found in dealerships that are consistent top performers in sales,
customer satisfaction, and F&I penetration and income. They created a small card for the salespeople or closers to carry
that gives approximate payments for different amounts financed. The payments are based on 8% A.P.R. for 36, 48, and
60 months for new vehicles and 12% A.P.R. for 24, 36, and 48 months for used. When the payment is quoted the
salesperson tells the customer that this payment is based on a standard rate and that the rate will vary depending on
credit criteria. These payments do not include additional products or services. Quoting a “loaded” payment creates a
loss of credibility that you cannot overcome and has been determined to be, without a complete Regulation Z disclosure,
a deceptive practice.
This approach not only aided in the sale and satisfaction of the customer, but resulted in higher penetrations and
product sales for F&I.
The simple rule with interest rate is to deal with it directly and openly. Waiting until you get to the contract to disclose the
interest rate has proven to cost you and the dealership credibility and is extremely damaging to the customers’ opinion of
the process. It is also counterproductive. Unless you are not disclosing properly, dealing with a negative while completing
the contract disclosure will cause the customer to reevaluate everything on the contract and possibly rethink the
products that they did buy.
The best techniques seem to have some things in common. First, the ability of the F&I Manager to obtain a credit report
on the customer before they are turned to F&I. With this information the F&I Manager can decide on the rate to offer and
be prepared to have the rate discussion. Second, it is important that the rate be offered openly and written down. It
seems that seeing the rate in writing gives it more credibility and causes less resistance. Another thing we discovered in
this study was totally unrelated. Some F&I Departments have changed from introducing the F&I Manager as “the
Business Manager”, to calling them the “Financial Services Manager” or “Lender Representative”. These introductions
created tons of sales resistance in cash customers. “If I’m paying cash, why do I need to see a Financial Services
Manager”? I don’t know who invented these new titles but they didn't do much research. Business Manager or Customer
Business Manager works just fine.

George Angus is with Team One Research and Training, a research and training company that specializes in scientific,
research based program development and training programs for the automobile industry. George has trained thousands
of F&I professionals and develops programs and techniques with the top performing F&I departments in the country.
Team One can be reached at 1-800-928-1923 or on the web at www.teamonegroup.com
George Angus has had over 100 articles published in news and trade publications. This
article is a recent example of George's reporting of information derived from researching,
training,  and working with the leading F&I managers in the US and Canada.