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What is a Finance and Insurance (F&I) department?

If you purchase a vehicle at a dealership, the salesperson may refer you to someone in the F&I or business office. This is the part of the dealership that markets loans and optional add-ons to customers after they have agreed to buy a vehicle at the dealership.

At the F&I department, you may be asked if you want to buy optional add-ons like an extended warranty, auto service contract, credit insurance, or guaranteed asset protection (GAP) insurance. Before deciding to buy any of these products, think about your needs and the costs. If you finance optional add-ons as part of your loan, this will increase your loan amount. You will pay more interest on the loan since you will be borrowing more money over the life of the loan. Remember, the dealer is not the only seller of most of these products. Shop around to find the best price if you decide you want one of these add-ons.

You don’t have to finance your auto loan through the dealership, and you should find out if you can obtain better interest rates through a bank, credit union, or other lender, that you contact separately from the dealer.