Ensuring a loan package is funded quickly is important to your business. It takes all three parties – you, your customer, and your F&I team – working in step to make it happen smoothly. Yet, every loan is unique in some way, and requires specific instructions based on the customer, lender, and dealer. So, how do you keep track of the demands of loan documentation, and what’s causing the most barriers to fast funding?
In a recent study, Priority One Financial Services took a segment of delayed deals and analyzed them in detail to identify the primary contributing factors. The findings revealed that 90% of delayed deals are caused by the same four factors, and, most notably, that those factors are largely avoidable!
As you prepare your business for the year ahead, consider these four practical steps to alleviate funding delays and ensure a quicker route to satisfaction and success with your F&I.
Include all Title Applications and MSO’s, filled out completely. Our research indicated that nearly 50% of delayed deals were due to title-related issues, meaning MSO’s weren’t sent in or filled out completely. As you’re packing up titling information for a lender, take one more step to check that each MSO is filled out front and back, and a completed title is included. This is where an F&I team comes in handy. At Priority One Financial Services, all dealers are provided with funding and closing checklists to help identify the specifics for each deal.
Provide all Invoices/Bookouts in the Loan Funding Package. By including all relevant invoices with the signed documents, the lender can review those documents immediately. This eliminates the need for the lender to request copies while reducing turnaround time on funding. Many funding delays are caused by human error. By working with an F&I partner, your partner will receive copies of invoices and bookouts with each deal to assist with that document verification and lender communication.
Take clear, legible images of Driver’s Licenses. Verifying a customer’s identity is an important step for Red Flag Compliance and security. With additional care on your end, ensuring that a license is included in funding documents when required, and that the copy of that license is clear and legible, can prevent a majority of what amounts to 20% of delayed deals today! Your F&I company should act as a second set of eyes here to ensure that provided Driver’s License images are clear and legible. If necessary, the F&I team should contact the customer to upload a new image.
Emphasize the importance of securing and verifying insurance before delivery. Our study reported that 30% of funding delays were due to missing insurance binder information. Most commonly, this is a result of an error in the VIN number provided. Priority One’s sister firm, Veritas Insurance, helps customers get their insurance binder in order. By referring customers to Veritas, our F&I team works in tandem with our dealers to remind the customer of this important requirement and ensure all information provided is without error.
Outsourced F&I relies on partnership. It is your F&I team’s job to equip you with what you need to know, and work alongside you to verify that necessary steps are in place. We hope these simple reminders will take you to a future of fast funding in the year ahead.