Structuring Deals as an F&I Manager | Free F&I Training

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Hello and welcome to this lesson on structuring  deals. deal structure is a very important aspect   of f&i. a poor deal structure may mean the  difference between delivering the customer and   having them leave for another dealership. first  let’s start with the little sample problem. you   have a customer with a 590 credit

Score 2,000 per  month in income and $500 per month in revolving   debt. look at the chart on your screen. determine  which would be the proper vehicle choice for this   customer. okay that was a bit of a trick question.  the truth is you don’t have enough information to   gave you about the customer. what was their  

Biggest issue? debt, credit score or budget? the  customers largest issue is budgeting. they earn   $2,000 per month in income and have $500 per month  in revolving debt. that doesn’t leave much room   left over for housing, groceries, bills and then  also a vehicle. in order to qualify for a loan,   budget-friendly car. the year,

Mileage and ltv   are not the issues. so how do we find the right  vehicle and structure for this customer? in this   case we can ask our lenders for a payment call.  a payment call is a way for a lender to provide   you with the exact payment and interest rate that  they’ll need to approve the deal. okay let’s try   a

Payment call and the lender gave you terms of   $299 per month and a 15% interest rate. now it’s  selling price and ltv. using your dms software,  you can plug in the numbers that you already know   such as the 15% interest rate and the customers  down payment of $500. next you could begin to play   with the selling price in your

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Dms software until  you find the payment that is all-inclusive at $299   per month. looks like a selling price of $11,975  puts us at that magic $299 number. going back to   our worksheet, we now know that we need to find a  vehicle with the maximum selling price of $11,975.   next we can now use the lenders rate sheet to find 

Our maximum ltv. because our maximum selling price   is capped, we need to limit our vehicle selection  to cars that are at least a few model years old   because these are the ones that are priced under  $12,000. using our lender guidelines sheet, we   see that this lender caps ltv at 110% for vehicles  that are three model years

Old or older. therefore   we now know that this customer needs a vehicle  with a maximum sell price of $11,975 and a maximum   ltv of a 110%. but vehicle selection is not the  only form of deal structuring. you also must   be knowledgeable in optimizing approvals. this  is done by knowing each lenders guidelines and  

Knowing which lenders like trades to be a part of   the deal in addition to cash down. santander for  example is notorious for liking trade-ins as part   of a deal. you must also know which lenders accept  which lenders accept bank statements as poi (proof  of income) and which banks require w-2’s. lastly,   co-application deal

And which lenders care   about such ordering. each of these are factors  in overall deal structuring and will be heavily   dependent on which lenders your dealership is  signed up with. it’s important to memorize…..

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Structuring Deals as an F&I Manager | Free F&I Training By Finance Manager Training