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

A car dealership’s F&I department (sometimes called the Business Department) handles financing, auto loan features, and sells optional add-on products.

When you decide to purchase a vehicle through a dealership, the salesperson will usually refer you to someone in the F&I or business office. This person will discuss dealer financing options and handle the contracts, paperwork, and agreements associated with the purchase of the vehicle. The F&I department also sells optional add-on products and features, including extended warranties.

Dealer-arranged financing is when you choose to get a loan or lease through the dealership. The F&I salesperson offers you loans from banks, credit unions and other lenders they have a relationship with. Dealer-arranged financing can be more expensive than going directly to a bank or credit union before you shop for a car. This is because the dealer may have an incentive to charge you more for a loan. You can save a lot of money by comparing loan offers and negotiating for the best interest rate available to you. Negotiating can be as simple as asking the dealer if you qualify for a loan with better terms.

If you agree to any optional add-ons, keep in mind that it will also increase your loan amount. As with financing, dealers are not the only sellers of most of these products, and you may find better prices or more generous terms if you shop around. You should also fully evaluate whether any of these products are necessary. Remember you are not required to purchase add-on products to secure financing through the dealer and you may have the right to cancel them later if you change your mind.

See different ways to get an auto loan

You have several options to consider when buying a new car or getting an auto loan. Learn how they can affect your overall money picture.

Read more about the ways to finance your loan