It is appropriate for the dealer to be compensated reasonably for performing this important and necessary function. The typical finance and insurance office incurs costs for personnel, credit processing, technology, training, office space, equipment and dealership overhead.
Our average rate markup is approximately one percentage point and is included in the interest rate that is fully disclosed to the customer on all pertinent documents. We have capped our dealerships' loan markup rate at whichever is lower, three percentage points or the cap set by the lending institution.
Isolated incidents in which rogue associates use abusive and improper sales tactics must not be
tolerated. Such acts should not be seen as an indictment of the F&I process or the industry in general.
If commissions are inherently unfair, travel agents, insurance agents and countless other sales professionals who receive compensation as a percentage of a final transaction would be equally suspect.
Like any other businessperson selling any other product in America, a dealer should be entitled to receive payment to cover the cost of selling that product and to generate a reasonable profit.
The industry should take steps, though, to ensure that customers are not taken advantage of with excessive rate markups or discriminatory practices and that customers receive full disclosure of their finance transactions. At AutoNation, we have made a pledge to provide our customers with the most transparent and principled financing process possible.