If you can buy a new recreational vehicle without having to take out a loan, that is wonderful. However, many buyers must go through a financing application before taking possession of their new toy.
Going to the finance office is the last step in purchasing a vehicle from a dealership. It can also be the most frustrating, as you’ve probably spent hours at a dealership negotiating.
F&I stands for Finance and Insurance, and this is the office where you will go to sign all required legal documents associated with the purchase of a vehicle. These documents include signing financing agreements or, if you are buying with cash, delivering a proof of payment. The F&I is directed by a sales manager who is specially trained and qualified in the various forms and contracts required.
The manager responsible for this department will inform you of all the services offered. If necessary, he will also be able to assemble the credit file for financing acceptance. He is also qualified to answer any financial questions and produce a summary overview of the payments you will have to make depending on the amount borrowed and the term chosen.
See this agent as an advisor who will ask you the right questions and listen to you. Everyone’s situation is different, and he is an expert in offering you financing at the best rate according to your conditions and financial situation.
Once you are in F&I, you can expect the process to take half an hour or more, depending on the signed documents. It may depend on whether you are financing or paying in cash. It can also vary if you purchase one of the many products and services that the F&I manager will offer you. Finally, another task of the F&I manager is to complete the transactions previously established with the sales representative.
The financing agent usually deals with several financial institutions and is qualified to direct you to the one that will offer the best interest rate. Remember, it’s all about your money, and you have the final say every step of the way. Interest rates are usually set in correlation with the amount borrowed as well as the term. The borrower’s credit history will be an important factor given the element of risk the financial institution takes based on the debtor’s record.
Doing some research ahead of time really pays off because you will know which financing products might interest you. ” Just $ 20 more per month ” might sound like a good deal, but multiply that by month and year and then by the interest rate … well, suddenly it becomes a substantial amount.
Here are some of the most common products that will be offered to you:
Extended warranty
Probably the most commonly purchased F&I product. It is also one of the most expensive. On the surface, this makes good sense: protect yourself from future maintenance and repair costs after the basic warranty on the new vehicle expires, especially as the quad gets older and therefore becomes more likely to require maintenance and repair work.
However, the value of any warranty is mostly determined by how it will be used. If your quad needs many repairs during the extended warranty period, it will be worth it. But if your machine is foolproof and hasn’t shown any signs of weakness, you have wasted a lot of money for nothing. Of course, you won’t know this answer at the time of purchase, and as such, it’s hard to place any value on this because you don’t have a crystal ball to predict the future. Of course, the dealer’s quoted price for the warranty is based on their profit margin and taking into account risk factors, not your wallet.
In some cases, you can purchase an extended warranty any time before the initial one expires. Ask your sales manager for this option, as it differs from one manufacturer to another. However, most do offer a subscription deadline, and it’s probably best to just say ‘no’ and see how things go as your quad gets older, taking into account the deadlines.
Vehicle maintenance contracts / maintenance plans
This plan offers prepaid service visits for the maintenance of your machine. Basically, this means that you are paying upfront for the scheduled maintenance visits, locking in the price to avoid future increases in labor or parts costs. It also means that you won’t have to hand over money for those future maintenance costs. Finally, it is important to note that the maintenance plan only applies to this specific dealer. You never know when you or the dealership might be moving.
A smart idea would be to take the amount the dealer quotes you and put the money in an interest-bearing account. Tap into it for maintenance when the time comes.
Loan insurance
Loan and credit insurance, also known as debt protection insurance, can be used to pay off a loan balance in the event of illness, accident, disability, or death. So, if you become unable to make your payments because of any of these circumstances, your insurance will help cover what you owe your lenders or creditors.
If you have a job that provides you with salary insurance during illness, you may find that loan insurance is unnecessary. Otherwise, if you are self-employed or do not have access to salary insurance with your employer, you could have a heavy burden to bear to continue making your payments. Therefore, you must consider these parameters to make a clear decision to avoid severe consequences in an unforeseen event. This type of insurance can help to ensure that the regular payments on your loan will be made for a certain time if you become ill or have an accident that leaves you unable to work and earn an income.
As for life insurance, you wouldn’t want to leave in inheritance a vehicle that requires reimbursement beyond its market value. Our beneficiaries would already have the grief of losing a loved one, we must not give them additional financial worries. Simply put, if you buy life insurance at the same time as your disability insurance, your loan balance will be paid off in full upon your death, saving your family from having to shoulder your debt.
You should know that you are entitled to a refund if you repay in full or sell your vehicle before the pre-determined term. The sales manager is there to assist and guide you during this process if necessary.
In conclusion, a visit to the sales manager’s office is a must if you apply for a loan. Most of the time, it will be beneficial for a financing request and your financial security if an unfortunate incident occurs.
