Vendor or Partner? How to Tell Before You Sign With an F&I Administrator

01Why the word “partner” tells you nothing

Dealers and agents say they want a partner, and they mean something real by it: a provider that picks up the phone when a claim goes sideways, raises a problem before it shows up in a statement, and does not treat the signed agreement as the end of the conversation. But a word in common use tells you little about any one provider that uses it.

The Federal Trade Commission’s advertising substantiation policy draws a useful line here. The Commission’s 1984 policy statement reaffirms “that advertisers and ad agencies have a reasonable basis for advertising claims before they are disseminated,” and describes enforcement directed at “express and implied claims, however conveyed, that make objective assertions about the item or service advertised.” Whether a particular word in a particular advertisement is an objective claim is a legal question we do not answer for anyone. The practical point is simpler: on its own, “partner” states no specific, measurable fact, so there is nothing in it to check.

So stop evaluating the word and ask for the objective statements behind it. Hypothetically, a statement such as “We answer escalations within four business hours, and here is the person with authority to overturn a claim decision” is checkable. So is “60 days’ written notice of any rate change, with the loss data behind it,” or “contract-level export of your data, in a documented format, within 30 days of termination, at no charge.” Once statements like these are in writing, you have something specific to hold a provider to. That is the method of this guide.

There is a second reason the word matters less than it seems: the company presenting the partnership may not be the company obligated on the contract. The NAIC Service Contracts Model Act, a model law that has legal effect only where a state adopts it, provides that service contracts “shall identify any administrator, the provider obligated to perform the service under the contract, the service contract seller, and the service contract holder.” The name on the slide and the names on the form can be different entities, and Part 01, section 01 explains why that is the first diligence question. A partnership is made with specific legal entities; know which ones.

02The difference shows up after the sale

Before the agreement is signed, a vendor and a partner can look identical. The relationship is tested later, in a handful of moments when the provider’s interests and yours are not automatically the same. Those moments are predictable, so you can ask about them in advance.

In every row, a vendor’s obligations are defined by transactions and a partner’s by outcomes it accepts some responsibility for in advance. Neither column describes any particular company; a provider can sit in different places on different rows. The table shows you where to look.

03Tests before you sign: service, escalation and claims

Each test in sections 03 to 05 asks for a commitment specific enough that you could later tell whether it was kept. The full questions are collected in the RFI in section 09, so the Ask boxes here are short.

Written service levels, not presentation promises

• A vendor describes its service as responsive and its people as experienced.
• A partner states service levels in numbers (hold time, time to authorization, escalation response time, time to payment), defines how each is measured, and says what happens if it misses them.
• How to test it: ask which service commitments are in the agreement or a written schedule, which are only in the presentation, and what remedy, if any, applies to a miss. A provider can reasonably decline penalties; what matters is knowing which promises are written.

Escalation and access to decision-makers

• A vendor gives you an account representative and a general support number.
• A partner gives you a written escalation path, from adjuster to claims manager to an executive, with names, response times and a statement of who can change a decision.
• How to test it: ask for the name and title of the most senior person you can reach on a disputed claim, and whether that person can overturn an adjudication or approve goodwill, or only review it.

Claims standards you can read

• A vendor treats its adjudication guidelines as internal.
• A partner lets you, or your service director, read the guidelines that will be applied to your customers’ claims, and tells you before they change.
• How to test it: ask to review the guidelines, at least the sections that matter most to your shop (labor rate, parts, inspection triggers, pre-existing conditions, diagnostic time on denied claims), and how many days’ notice you will get before a change. Sharing them only under a confidentiality agreement is reasonable.

Claims metrics with definitions

• A vendor quotes an approval rate or a payment speed.
• A partner tells you what the number counts, what it leaves out, and offers to compute it for your stores.
• How to test it: Part 01, section 04 sets out the metric questions. The partnership test is narrower: will the provider report those metrics for your own stores, on a stated schedule, using the definitions it used in the pitch?

04Tests before you sign: reporting, incentives and support

Reporting at store and group level, with defined metrics

• A vendor provides a monthly report.
• A partner provides reporting at the level you manage the business (by store, by F&I manager, by product, across the group), defines every metric and states how current each one is.
• How to test it: ask to see the actual reports a comparable dealer or group receives today, not a slide. Check whether each loss ratio says which premium and which losses it uses, and whether penetration and product profit net out cancellations. Part 09, section 03 covers which numbers are worth having and how to read them.

Incentives that point the same way

• A vendor earns the same whether your program performs well or badly over its life.
• A partner has at least some of its economics tied to how the program performs, and is open about where its interests and yours diverge.
• How to test it: ask for one page showing every way the provider makes money on your program, and where it would earn more if your program performed worse. Participation structures such as reinsurance and retrospective commissions can align interests, and add complexity; Part 05 explains them. We draw no tax conclusions; take any tax view from your own counsel.

Training and F&I support that is measured

• A vendor offers training.
• A partner says what the training is meant to change (penetration, menu presentation rate, cancellation rate, compliance), measures it before and after, and reports the result.
• How to test it: ask what support is included, who delivers it, how often, how compliance is covered, and which metrics it will be measured against. Support that goes unmeasured is hard to tell apart from a sales visit.

05Tests before you sign: data, exit and the right to leave

A revealing test of a relationship is how it is designed to end. Exit terms are written at the start, when both sides are optimistic, and read at the end, when they matter most. That does not mean exit terms should be one-sided in your favor; a provider that builds a program for you can reasonably ask for a term, a notice period or a minimum. The terms should be clear, reciprocal where they can be, and written before the first contract is sold.

Who owns the data, and what you can export

• A vendor lets you see your data in its portal.
• A partner agrees in writing that you can export your contract, claims, cancellation and reinsurance data at contract level, in a documented format, during the relationship and at its end, at a stated cost and within a stated time.
• How to test it: ask for a sample export file and its field definitions now. Part 08, section 10 covers who holds which data and what governs it on termination, including record-retention rules that may require the provider to keep copies.

Exit terms and run-off

• A vendor treats termination as a commercial event.
• A partner treats it as a transition it is responsible for: the in-force contracts keep being administered to the same standard, reporting continues, balances are settled on a timetable, and your customers are not caught in between.
• How to test it: ask what the agreement says about termination notice (and whether it runs both ways), run-off administration and its cost, reporting after termination, and settlement of reserve, retro and reinsurance balances. See Part 10 on switching, Part 06, section 08 for programs under your own brand, and Part 05, section 08 on moving a reinsurer.

06The discretion test

A provider’s existing clients are in the room with you, whether or not anyone names them. How a provider treats their information can be a useful preview of how it may treat yours: your production numbers, your loss experience, your reinsurance results, your disputes, and eventually the fact that you left, if you ever do.

Much of what a provider says about its other clients is ordinary and healthy. References given with a client’s permission are normal, and you should ask for them. So are case studies and testimonials a client has agreed to, including from a dealer who moved from another provider and is willing to say so. A provider describing its experience with groups like yours, without identifying them, is doing its job. In each case, consent, or the absence of anything identifying, is what makes the information the provider’s to share.

What deserves a closer look is another client’s production, results or disputes offered in a pitch with no sign that the client agreed. That information belongs to someone else, and how a provider handles it may preview how your own business would be discussed in someone else’s meeting. When a client is named, it is fair to ask whether that client agreed; a provider that works with consent should be able to answer easily. The green flags: references and case studies offered with consent, experience described in general terms (“groups of your size,” “stores with a high used-vehicle mix”), and a case made on the provider’s own terms rather than by discussing other administrators.

There is also a compliance dimension, though it concerns consumer information rather than business information. Among its requirements, the FTC Safeguards Rule directs a covered financial institution to “[o]versee service providers” by “[t]aking reasonable steps to select and retain service providers that are capable of maintaining appropriate safeguards for the customer information at issue” and by “[p]eriodically assessing your service providers based on the risk they present and the continued adequacy of their safeguards” (16 C.F.R. § 314.4(f)(1) and (3)). Part 01, section 03 and Part 08, section 06 cover what that means for diligence on an administrator; how it applies to a particular dealership is a question for counsel.

References, and how to weigh them

The FTC’s Endorsement Guides govern endorsements in advertising, not a private reference call, but they frame a question worth borrowing. Under 16 C.F.R. § 255.5(a), a connection between endorser and seller “that might materially affect the weight or credibility of the endorsement” and is “not reasonably expected by the audience” must be disclosed, and such connections can include “monetary payment or the provision of free or discounted products.” For a reference, the equivalent question is simple: does this dealer or agent receive anything from the provider, such as a fee discount or preferred terms, for taking calls like yours? Ask the provider, and ask the reference.

07The agent in the middle

For a dealer served by an independent F&I agent, the partnership is a triangle: administrator, agent and dealer. The agent often designs the program, trains the F&I office, watches store-level performance and is the first call when a claim goes wrong. Evaluating the administrator without evaluating how it works with the agent can miss the part the dealer feels most.

The administrator–agent side, whether the agent has the reporting, escalation access and contractual protection to do the job, is covered in Part 06, section 09. This guide adds the other two sides.

The administrator–dealer side: does it strengthen the agent or route around them?

An administrator that works through agents should be able to say plainly how it handles a dealer in an agent’s book. Does it contact the dealer directly, and if so, with the agent’s knowledge? If the dealer calls the administrator with a dispute, does the agent hear about it? A partner to an agent-served dealer supports the agent’s role rather than competing with it, and a dealer who values the agent should ask about this as directly as the agent would.

The agent–dealer side: is the agent’s position transparent?

The dealer should be able to understand how the agent is paid and whether the agent participates in the same premium as the dealer, for example through agent-owned reinsurance alongside dealer reinsurance. Part 06, section 06 describes the compensation streams. An agent who is open about them is protecting the relationship everything else depends on.

The test for the whole triangle

Ask all three parties the same question: when a claim is disputed at one of the dealer’s stores, who is called first, who is called second, and who decides? If the answers match, the triangle is working. If they differ, better to find the gap now than during a dispute.

08Red flags and green flags

These are behaviors, not companies. One red flag on its own may have an ordinary explanation, and one green flag proves nothing. Look for the pattern across the whole evaluation.

09The Request for Information template

This template is free to use, copy and adapt, with no form to fill in and no need to tell us you are using it. Send the same document to every administrator you are considering, including CareGard, with the same deadline, and compare the written answers side by side before anyone presents. A strong presentation can make a weak written answer look better than it is; comparing the paper first is fairer to everyone, including the provider whose people are less polished in a room.

Delete any question that does not apply to you, and add your own. The diligence detail behind many of these questions is in Part 01; this list collects it in a form you can compare.

Instructions to respondents

• Answer every question in writing. If you decline to answer, say so and, where you can, say why.
• For every figure, state the definition, the period, the population it covers and whether it is measured or estimated. Label company-reported figures as such.
• For every commitment, state whether it will appear in the agreement or a written schedule to it.
• Do not identify other clients or share their information in your answers, except references who have consented.

A. Identity and financial responsibility

1. Name the legal entity that will serve as administrator, the entity that will be obligor (provider) on the contract form, and the reimbursement insurer, in each state where we sell. Provide a completed specimen contract.
2. For each state, which financial-responsibility method does the obligor use? Name the insurer, its NAIC company code, its current financial-strength rating and outlook, and whether it is admitted or surplus lines.
3. Provide an organization chart showing ownership, affiliates and common principals. Has there been a change of control in the last three years, or is one pending that you can disclose?
4. Provide registration or license numbers in each state where we operate.
5. Have you, any affiliate or any principal been subject to a public regulatory or enforcement action in the last ten years? Describe each.

B. Claims operations and metrics

6. Define your claim approval rate: the exact numerator and denominator, and how partial approvals are counted. Report it for the last 12 months on a portfolio comparable to ours.
7. Report median and 90th-percentile time to authorization and time to payment for the same period. State when each clock starts and stops.
8. Report denials by reason code for the same period.
9. May our service director review your adjudication guidelines? How many days’ notice will we receive before guidelines applied to our customers change?
10. State your policy on posted labor rates, parts (OEM, aftermarket, reconditioned), and diagnostic and teardown time on denied claims.
11. Are claims adjudicated in-house or by a third party? Who performs inspections, and what is the turnaround?

C. Service and escalation

12. Who will be our named contacts, and what are their hours of coverage?
13. Provide the written escalation path for a disputed claim: each level, the named person or role, the response time, and who has authority to overturn a decision or approve goodwill.
14. List every service level you will put in writing, how each is measured, how it will be reported to us and what happens if it is missed.
15. Describe, anonymized, the most recent disputed claim a client escalated to your senior level: the steps, the timing and the outcome.
16. What training and F&I support is included, who delivers it, how often, and which metrics will you report to show its effect?

D. Economics and participation

17. In one page, list every fee and every other way you earn money on our program, in dollars per contract or by formula.
18. Who can change our rates, on how much notice, and what loss data will we see before a change takes effect? When did you last change rates on a comparable program?
19. Which participation structures do you offer? For each, who owns and controls the entity, what fees apply, and how often and with what lag is reporting provided? (We will take tax advice from our own counsel.)
20. Provide your chargeback schedule, how it is computed, how we are notified and how disputes are resolved.
21. At what point will you contact us about a deteriorating loss ratio or cancellation rate, and what options will you bring?

E. Reporting and technology

22. Provide the actual store-level and group-level reports a comparable client receives today, with the definition of every metric.
23. For each loss ratio you report, state whether it uses written or earned premium and paid or incurred losses, and whether reserves for claims not yet reported are included.
24. What is the lag, in days, for contract registration, claims, cancellations and cession statements?
25. Which DMS and menu platforms do you connect to directly, and which through a third-party hub?

F. Data and security

26. Provide a sample contract-level and claim-level data export with field definitions. Can we export on demand, in what format and at what charge?
27. Provide your most recent SOC 2 Type II report (or equivalent), and a summary of your written information security program.
28. How quickly, and with what information, will you notify us of a security incident affecting our customers’ information? Will that commitment be in the agreement?
29. Which subcontractors will have access to our customers’ information?
30. Will you use our data or our customers’ information for any purpose other than administering our program, including marketing to our customers? If so, describe it.

G. Contract, exit and transition

31. State the term, renewal, minimum-volume and exclusivity provisions. Which of them bind you as well as us?
32. State the termination notice periods for each party, with and without cause.
33. After termination, who administers our in-force contracts, to what written service standard, with what reporting and at what cost?
34. On termination, what data will we receive, in what format, within how many days and at what cost?
35. How and when are reserve, retrospective commission and reinsurance balances settled after termination? Can a reinsurance entity move to a new administrator, and what does that require?
36. What transition assistance will you provide to us and to a successor administrator?

H. Conduct and discretion

37. Do you obtain client consent before naming a client as a reference, in a case study or in marketing? Is that a written policy?
38. What information about our business will you treat as confidential, during the relationship and after it ends? Will that be in the agreement?
39. Do your sales staff have written guidance on discussing competitors and former clients?
40. (For agent-served dealers) How do you work with dealers in an agent’s book? Do you contact dealers directly, and is the agent informed when you do?

I. References, with client consent

41. Provide three references of similar size and structure to ours who have consented to be contacted, including a service director, not only a dealer principal or F&I director.
42. If a former client who ended the relationship in the last three years is willing to speak with us and consents, please provide their contact details.
43. Do any of your references receive compensation, discounts or other benefits connected to acting as a reference?

10How to score the answers

A scoring sheet does not make the decision, but it puts every candidate on the same terms and makes you decide in advance what matters most. The weights below are a starting point; adjust them to your reasons for looking.

Step one: score each answer on the same scale

The scale rewards writing over presentation by design. A provider scores well by being specific, not by promising everything; a plain, written “we do not offer that” is more useful than a confident verbal yes.

Step two: weight the areas

Average the scores within each area, multiply by the weight, and add the areas. Then set the total aside and look for any score of 0. A single 0 on a question that matters to you, such as who the obligor is, or whether you can export your data, may outweigh a strong total. Treat those as gating questions: a candidate who will not answer them in writing does not advance, whatever it scores elsewhere.

Step three: test the finalists

Then invite the finalists to present, and use the meeting to test the written answers rather than replace them: walk through the escalation path, see the sample report live, and probe any answer that scored 1. Ask the references the same questions you asked the provider. Where reference and written answer agree, you have something close to evidence.

11How we built this, and what we could not verify

This guide is a framework, not a survey. The vendor-and-partner distinction, the tests, the RFI and the scoring method are our own. The regulatory points are quoted from the primary sources listed below, accessed in October 2026. The guide names no administrators, and nothing in it describes the conduct of any particular company.

What we could not verify, and therefore did not assert:

• How common any behavior is. We found no public data on how many administrators offer written service levels, claims-guideline access, contract-level export or reciprocal termination terms. The vendor and partner columns are definitions, not descriptions of the market.
• Benchmarks. We found no public, sourced benchmark for service levels, notice periods or exit terms, and no industry-standard RFI or scoring method. The numbers in section 01 illustrate what a checkable statement looks like; they are not norms. The weights in section 10 are judgment.
• Legal characterizations. We offer no view on whether any word in any advertisement is puffery or a claim requiring substantiation; that depends on context and is a question for counsel. We use the Endorsement Guides (§ 255.5) only to frame a question for private reference calls, not to suggest they apply to them, and we did not rely on the consumer reviews rule at 16 C.F.R. Part 465, since this guide concerns business references.
• Model law adoption. We did not survey which states have adopted the disclosure language in § 5D of the NAIC Model Act, or in what form. Check the law of each state where you sell.

This is not legal or tax advice. Contract terms, confidentiality provisions, non-solicitation clauses and participation structures turn on facts and state law. Use this guide, and the RFI, to ask better questions of providers and of your own counsel, not in place of counsel.

If something here is wrong or could be clearer, please tell us.