Schrödinger’s Combo Product

NADA has recently published a model policy for properly selling F&I products, i.e., without running afoul of the Attorney General.  It includes the disclosure formerly known as the AutoNation Pledge, and a new procedure which seems to be taking the place of the old-school waiver form.  I say “seems” because there is no mention of the old form, which I believe has something to do with nuclear physicist Erwin Schrödinger.

Prior to the sale of a VPP, the Dealership will request the customer’s acknowledgement of the election to purchase or decline each selected VPP or VPP bundle.

As everyone knows, subatomic particles exist in an indeterminate state until they are pinned down by measurement.  For example, if you have a radioactive isotope of Cesium, you can’t tell whether it has decayed until you aim your Geiger counter at it.  Not only can you not tell what state the atom is in, it is not definitely in any state until you measure it.

To show how this contrasts with traditional physics, Schrödinger proposed the following thought experiment.  Imagine there is a cat in a box with the Cesium rigged to kill the cat when it decays.  According to the Uncertainty Principle, the cat is both alive and dead at the same time.

Similarly, the F&I waiver requires each product to be either accepted or declined.  You bought the dent protection, so it prints in the green column, but you turned down roadside assistance.  It prints in the red column.  To save a few dollars, you are willing to leave your family stranded.  Please sign here to confirm.

But what if dent and roadside – and key and windshield – are part of the same bundle?  You only bought one of the components, so it would be misleading to print it in the green column.  On the other hand, you are not going to confirm declining the bundle, because you did buy part of it.  So, in which column does this product belong?

Here are some ideas:

  • The menu system should account for the child products and print them individually on the waiver. It should also count them separately as product sales.
  • The menu system should print the coverage description, and the coverage description should state which components were accepted.
  • Providers should offer bundles all or nothing, and not allow them to be split up.

Unlike Schrödinger, you will not win the Nobel Prize for solving this one – but you can provide some guidance to your fellow F&I practitioners.  Click the link below to register your answer.

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