After successfully navigating the initial stages of car buying and securing a favorable deal, the next step is the Finance and Insurance (F&I) department. This is where the financing paperwork is finalized. It’s crucial to understand that car dealerships typically view each deal as having two distinct profit centers: the front end (vehicle price, trade-in value) and the back end (F&I department). The F&I manager is a sales professional focused on maximizing dealership profit, not a financial advisor acting in your best interest.
Do not assume you will automatically be offered the best possible interest rate. Dealerships often increase the interest rate above the qualifying rate to generate additional profit. While you may have a signed buyer’s order reflecting previous negotiations, the F&I department is where the contract is formalized. Remain vigilant and ensure all agreed-upon terms are accurately reflected in the final contract.
Dealers might suggest that financing through them is necessary for deal approval. However, you are free to secure financing elsewhere. If you’ve found a better financing offer, utilize it. At the very least, know your qualifying numbers and challenge the dealership to improve upon them.
Always read the contract thoroughly. Verify that all negotiated terms from the front end are accurately transferred to the final agreement. Avoid complacency in the F&I department, as this is a crucial stage to protect your interests.
A common mistake car buyers make is inadequate preparation. Car buying can be a lengthy process, requiring sustained energy and focus. Before visiting the dealership, research your credit score, obtain pre-approved financing, and understand potential add-ons. Determine which extras you’re willing to pay for and ensure the contract aligns with your decisions. By staying informed and alert, you can confidently navigate the F&I department and avoid unnecessary expenses.