Principles Do Matter

Recently, I had a conversation with someone whom had a total of eighteen months employment in three different dealerships. Listening to the person’s description of the employees in the dealerships I could not help but think about the hiring practices of each of the previous employers.


When we are together we all say we have high standards and most I am sure do strive to live by them. But what happens in a dealership that allows poor behavior to continue? Does business become so difficult that we turn a blind eye to some shady behavior, in hopes of making a profit for the day?


Lenders are now telephoning our customers, sometimes after the contract has been funded to verify all the facts both on the credit application and about the transaction. When a dealership’s finance manager, sales manager, closer, or sales representative coaches the customer(s) about the anticipated telephone call from the lender, the dealership places its reputation on the line.


Misrepresentation of the customer on a credit application, or misrepresenting the vehicle, can be viewed as fraudulent activity. Is there any deal that is worth losing a lender over?


What happens when the lender discovers the misrepresentations? As a rule they bring the contract back to the owner and request payment of the contract in full, the term “Unconditional Guarantee” comes to mind. Many of us have seen lenders do a complete audit of all outstanding contracts for a dealership that has a series of misrepresentations.


While, the blame is placed upon the finance person who wrote the contract, I cannot help but think this practice could have been avoided if this practice of misrepresentation of the customer, deal structure, or vehicle was not tolerated by senior management. How do you monitor this you might ask? The best way is to do an internal self-audit of deals from time to time. Make the time to telephone your own customers verify the facts and say thank you for the business.


Clean and sober:


Most dealerships have a drug testing policy. If yours have such a policy, I understand why and support your efforts. If your dealership does not have one, I would recommend you begin one. In this age of enlightenment, an employee who is allowed to come to work under the influences of non-prescription drugs places the business in jeopardy.


No one need remind us of how difficult the business has been over the past few years. We must maintain our principles, I am sure most dealerships strive to hire people that live by the solid business principles the owner stands for, because the actions of your employees reflect on you, the owner. It all begins with who you hire and what behavior you will tolerate.


I wish I could write that the credit of the customers your dealership sees will improve. Life, however, has been just as difficult for your customers as it has been for your business.


The reality is some people do not handle credit and obligations well. Not everyone has the right to an automobile. Being able to afford an automobile is still a privilege and not a birthright. Sometimes, we simply need to say no to the deal—whether it is a sale or an employee.


It should be viewed as a privilege to work in a dealership that serves the community; no dealership should hire just anybody who walks through the door. Be selective in hiring, check the person as best as you can prior to hiring. Past production is important, see if you can verify what their past performance was, and how they got those numbers. In our industry the how is just as important as the what. It pays to be selective in your hiring.


When you find the right person, the next step is to educate them. As with any profession education is essential and it is ongoing. Invest in your human capital, your employees. Education should mirror your standards and support your policies and procedures.


Jan Kelly is the president of Kelly Enterprises. She is an educator and consultant, convention speaker, and writes frequently for industry publications. For information about educational venues or joining an F&I 20 group, call 800-336-4275 or visit





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