Led by Dave Robertson, executive director of AFIP, our team of regulatory experts answers questions for industry members. You can browse previous topics, search for specific words or phrases, or ask a new question.
Situations arise in my store where I need to provide a payment quote before I have any indication as to what the customer’s credit score will be. How do I determine the APR when quoting the payment?
As a best practice, the rate quoted must be statistically verifiable and applicable to the transaction. AFIP recommends you compute the average APR charged your customers over running 60-day periods, factoring out any zero-APR deals. You use the same method to compute the average APR assessed on used vehicles. AFIP Best Practices Experts
When I’m quoting an APR, a lot of customers ask me, "Is this the best rate available?" I don’t think I can say "yes", but what am I supposed to say without losing the deal?
The best practice response is, "If you wish to finance here, this is the rate available." If you’ve marked up the APR over the buy rate, then it isn’t the best rate available. The fact that the difference between the buy rate and the retail rate generates the revenue to compensate the dealer for the funding solicitation and contract onsummation work you’ve conducted on behalf of a funding source, along with a reasonable profit, hasn’t gained much traction in the legal community. AFIP Best Practices Experts
I run an OFAC check on customers who order vehicles or who agree to purchase a vehicle we currently don’t have in inventory. Does this satisfy my OFAC obligations?
No. An OFAC check must be completed at the time of consummation. If you run an OFAC check when a customer places an order, you’ll still need to run a second check when the deal is consummated. It would be your bad luck if the customer makes the Specially Designated Nationals or Blocked Persons List between the time the vehicle was ordered and when it was delivered. AFIP Best Practices Experts
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