In the 1970s, just a few years after finance and insurance departments were established, unethical behavior at dealerships was often hidden and secretly praised. But in the last few decades, the F&I office has slowly but steadily made ethics a priority.
The evolution of ethics in F&I has been "a long, slow process," said George Angus, president of Team One Research and Training. In the 1970s, when Angus started working in auto retail, "Everything was swept under the rug and winked at."
Today, sweeping bad behavior under the rug is more difficult to get away with. Dealers set policies to weed out unethical characters, and social media and consumer resources often shed light on unethical business practices.
Those policies have worked, according to results from a DealerRater-Automotive News consumer survey. Of 9,708 consumers who recently visited a dealership to buy or lease a vehicle, more than half said they trust the financing process more than they did a decade ago.
"Ethics have improved partly because we are more aware that we have got to treat the customer right if we ever want to see them again," said Matt Woods, south regional manager for Service Group, an F&I product and training company in Austin, Texas. "For years, the car business was a game without rules that were enforced."
Dealerships, and especially F&I departments, have long had a reputation of dishonesty among consumers — notoriety Angus said they once deserved.
"But today, the vast majority of auto dealers are honest and upfront. And they have standards within the dealership," said Angus. "The idea that dealers are going to rip you off doesn't fly with the buying public anymore. Ethics is a smart business decision."
Much of that better behavior is driven by compliance training, which skyrocketed over the last two decades as regulators began policing auto retail more aggressively, said Woods. Although compliance pertains to following the law and ethics is a judgment of right vs. wrong, they often overlap, and they both center on an awareness of doing the right thing.
"Compliance drives ethical behavior; ethical behavior drives compliance. I think they go hand in hand," said Woods.