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Monday, February 20, 2017

Earl’s Good & Bad Car Dealer Lists



I must explain that those dealers listed as “Good Guys” are far from perfect. I urge you to shop and compare prices, stick up for your rights, and do your homework in preparing to buy. South Florida is the “Sodom and Gomorrah” of the retail car business. Listing the best dealers is like listing the most honest inmates in Attica or Leavenworth.

I arrived at my evaluations of these dealers by my weekly mystery shopping reports that I’ve conducted for more than 7 years. I also gather data from my constant interaction with you, the car buyers of South Florida. You call my weekly Tuesday afternoon talk show, “Earl Stewart on Cars” (stream it live at www.StreamEarlOnCars.com 4-6 PM), my cell phone, and text me, you send me emails, and you write me letters about your experiences in buying and servicing your cars. You post comments on my blog,www.EarlStewartOnCars.com.

This list is not static and I update it regularly, adding more “good guys” and dropping the undeserving from the list. Hopefully, I will not have to add to the “bad buy” list very often, but I will if I have to. These dealerships are the worst of the worst and should be totally avoided at all costs. You would be better served to drive an extra 50 miles to buy the make car you seek than buy it from one of these dealers. In fact, you would be better served to buy a different make from a good dealer.

I know I’ve angered a lot of car dealers (so what else is new?) by leaving them off the “good guy” list and especially the bad guys. I urge those of you who are sincere to call me personally and I will be glad to discuss with you what your customers told me about you that led me to omit you from the “good guy” lists. The “bad guys” won’t call me because they know exactly what they are doing and how they are premeditatedly deceiving their customers.

If the make car you are seeking does not show a dealer, it’s probably because not many people buy that make. I listed only the most popular. I suggest that you choose a dealer a “good dealer” who is listed that also sells your make. For example, Schumacher also sells Mitsubishi and Infiniti and he is listed as a good dealer for Chevy and Buick.

Monday, February 13, 2017

BUY YOUR NEXT CAR THROUGH COSTCO

There are lots of third-party new car buying programs out there but the Costco auto-buying program will give you the lowest price and the best protection from car dealers’ efforts to increase the price by dealer fees and dealer-installed options.

My second choice is TrueCar, www.TrueCar.com. My first choice used to be TrueCar, but several auto manufacturers including Toyota and Honda, have recently began requiring their dealers to increase the MINIMUM ADVERTISED PRICE for all the cars they advertise and sell. These manufacturers consider TrueCar dealers that share their best price with TrueCar, to be “advertising” their price. Thus you will no longer find a TrueCar dealer’s lowest price displayed on the TrueCar website. In my opinion, this is a bad thing for the car buyer because it has the net effect of raising the price you pay for your new car.

Unfortunately, Costco requires an annual membership fee, but this fee is nominal, $55, in comparison to the large savings you realize from buying, not only cars, but all of their products. I’ve been a member of Costco for over 20 years and I can promise you that you will save thousands of dollars a year by shopping there. There’s another problem with buying from Costco and that is there may not be a location near you. My answer to that is that you can still buy from them online, www.Costco.com and, if even if you have to drive 20 or 30 miles, you’ll find out that the savings justify your time and gas expense.

The only real problems with the Costco Auto Buying program are not from Costco, but from their car dealers. You probably have had bad experiences buying or leasing cars from car dealers and this is why you’re reading this article. You’re not alone, the Gallup Organization has been conducting an annual opinion poll on Honest and Ethics in Professions for the past 36 years. Last year (2016) car dealers ranked next to last, just above Congressmen. Car dealers have been at the bottom or near the bottom of this list for every one of the past 36 annual surveys. Even though Costco selected their car dealers in good faith and required them to sign a contract obligating them to give you their best price (the price must be lower than the price they sell to anybody else except a Costco member), does not mean that you will get that price UNLESS YOU FOLLOW THESE THREE IMPORTANT RULES.

COSTCO AUTO BUYING RULE ONE. Visit the Costco Auto Program website, www.CostcoAuto.com. You’ll be asked to input your Costco membership card number and other information pertaining to the make and model of car you wish to purchase. From your zip code, you will be advised of the Costco approved car dealer nearest you.

COSTCO AUTO BUYING RULE TWO. You will also be advised of the names of the Costco approved sales representatives at the dealership. It is imperative that you speak to no other sales person other than those named on this list. You should print out the information sheet which includes the names of those Costco sales people that are approved and bring this to the dealership when you visit.

COSTCO AUTO BUYING RULE THREE. When you arrive at the dealership and are sure you’re dealing with the official Costco approved sales person, insist on her showing you the Costco Member-Only Price Sheet which shows your exclusive prearranged Costco member savings. Remember that you are entitled to applicable manufacturer rebates and incentives or special financing. You should also ask to see the manufacturer’s invoice and MSRP for the vehicle you selected so you can see how much you saved as a Costco member.

Remember that Costco rules do not allow their approved dealers to add anything to the Costco Member-Only Price except GOVERNMENT FEES…namely sales tax and the actual cost of the rag and registration paid to the state of Florida. If a Costco dealer tries to add anything else, do not buy the car and report them to Costco. Be especially wary of dealer or port installed accessories like nitrogen in tires, LoJack, protection packages like Toyoguard, floor mats, pin stripes, etc. Also, pay no dealer fees which often carry different names like electronic filing fee, tag agency fee, dealer prep fee, doc fee, notary fee, etc.

If the Costco dealer attempts any of these shenanigans, report him to Costco immediately. If the dealer refuses to make things right, Costco will cancel him as an approved dealership.

Monday, February 06, 2017

“CERTIFIED” USED CARS CAN KILL YOU

Consumers for Auto Reliability and Safety (CARS), the leading consumer advocate organization for car owners in the USA, issued a press release on February 6, entitled, “AUTO SAFETY/CONSUMER ORGANIZATIONS SUE FEDERAL TRADE COMMISSION, OVER DECISION ALLOWING GENERAL MOTORS AND CAR DEALERSHIPS TO ENGAGE IN FALSE ADVERTISING OF UNREPAIRED RECALLED “CERTIFIED USED CARS.”

For many years used cars that were “certified” by car dealers according to rigid standards set by the car’s manufacturer were considered to be the best, most reliable, and safest used cars you can buy. Certified used cars are required by the auto manufacturer to be carefully inspected and tested by the dealer. Only cars that have passed this careful and extensive examination are permitted to be sold as certified. Because of this, certified used cars carry a better warranty and also cost more…about $1,300 on the average.

Sadly, a very bad and puzzling decision by the Federal Trade Decision has changed the rules that define “certified” used cars. The FTC, for reasons known only to them, have issued a ruling that allows car dealers and manufacturers to call a used car “certified” and sell that car to you without any consideration for dangerous recalls. This ruling is not only very wrong, but in direct contradiction of the Federal Trade Commission’s existing rules against selling any product that is dangerous to the consumer.

This would be a terribly dangerous decision at any time, but given the existing huge and historically unprecedented recall of 44 million cars with defective Takata airbags, it poses an immediate, clear and present danger to all buyers of used cars. To quote from CARS press release, “The FTC’s Consent Orders set a de-facto standard for the auto industry that allows dealers to deceptively advertise cars with dangerous and potentially lethal safety defects that have killed and maimed people. May of those defects jeopardize the lives of not only used car buyers, but also passengers and everyone e else who shares the roads and adjacent areas, including sidewalks, driveways and parking lots.” According to Michael Brooks, Acting Director of the Center for Auto Safety, “Even if there is a 100% certainty that an unrepaired safety recall defect will immediately kill anyone who buys a so-called ‘certified’ car and their family, the FTC would allow car dealers to advertise that car (certified car) as ‘safe’ and ‘repaired for safety.’”

The Takata airbag recall affects almost every auto manufacturer in the world. Weekly you see headlines of additional cars being recalled with defective Takata airbags and the pace is so great that millions of these cars have no available fix. Estimates are that it will be years before enough safe replacement airbags will be available to make all these cars safe.

Hopefully this lawsuit against the FTC by Rosemary Shahan’s CARS and the other consumer organizations will prevail, but this can take a long time. Sadly, until the FTC ruling is overturned, it’s Caveat Emptor, BUYER BEWARE, when you buy any used car. The only way you can know that the used car being sold to you does not have defective Takata airbag or other dangerous recall is to check your cars Vehicle Identification Number or VIN. Click on the website for NHTSA, www.SaferCar.gov or www.IsMyCarRecalled.com. You should also call your car’s manufacturer because they have information even more current than NHTSA. Do not rely on the reports by CarFax or AutoCheck because they are often inaccurate.

Monday, January 30, 2017

Should I Trade In My Old Car or Sell it Myself?

When you trade your old car in on your next car, the dealer will try to retail your car or sell it at auction for more than he allowed you in trade. If he successfully retails your car, he will make about $2,000. If he wholesales it at the auction, the profit will be less. You should know that this is what the dealer wants to do. Sometimes it doesn’t work out that way and he will actually lose money on your car at the auction. Or, he may be unable to retail your car and then most certainly lose money when he is forced to wholesale it.

Obviously it is more difficulty for an individual to make a profit by selling her own trade-in than it is for the dealer. That is one of the main consideration you must consider before deciding to sell your old car yourself. Most people run an ad online to advertise their trade using a site like AutoTrader.com. If you do this, you need to know what to ask for your car and I recommend studying the listings on Autotrader or consulting Kelley Blue Book at www.kbb.com. This site will tell you about what your car is worth wholesale and retail. Another way to determine this is to ask dealers for your make of your car what they will buy it for. This will establish the wholesale value. CarMax is a good company to consult if there is one near you. Once you establish the wholesale, you should consider a markup of less than what car dealers are asking. When deciding how much profit you want to make, remember that you are losing the sales tax reduction that you earn when you trade your car in. On a $20,000 trade, that amounts to $1,200. If you can make a $2,100 above wholesale, you are ahead of the game by $1,000. This takes a lot of work and you will be dealing with a lot of “tire-kickers” and people who cannot afford to buy your car. I very strongly advise you not to extend credit. Require full payment in cash. Set a time limit on how long you will try to sell your car. Remember that your used car is depreciating every week and your cost of advertising will climb. I wouldn’t suggest you hang on to your old car for more than a month.

Ebay can be a good option for advertising your car. A lot of car dealers use Ebay to retail used cars and it is very effective. There are schools on how to retail merchandise on Ebay and Ebay has tutorials. There are also a lot of books at any bookstore on this subject. There are companies who will do all of the work for you and you only pay them a fee if they are successful in selling your car. If the dealer you are buying your new car from sells cars on Ebay (most do), you can ask him if he will post yours Ebay along with his cars for a fee.

If you fail in your attempt to retail your old car, remember to be careful to maximize the amount you get from your dealer as trade-in. Often times dealers will attempt to trade a car in for below wholesale. Be sure you have a firm handle on the true wholesale value of your trade. You can get bids from other dealerships to purchase your car for cash and you can check with www.kbb.com. If you are buying a car from a dealer franchised to sell a different make than your trade-in, be wary. This dealer will likely be unable to offer you as much as a dealer who is franchised to sell the make of your trade. People looking to buy a used Toyota are more likely to visit a Toyota dealership than a Chevrolet dealership. That is why it’s important to get bids from other dealerships before accepting the trade-in offered by the dealer you’re buying your new car from.

Monday, January 23, 2017

Why the First Set of Tires on Your New Car Wear Out Fast

The tires that came with your last new car were not designed by Michelin, Goodyear, Bridgestone or any other tire manufacturer. They were designed by the manufacturer of your car. If your new car came with a set of Michelins, Michelin made the tire but they made it to the specifications set by your car manufacturer. These tires are referred to as OEM (original equipment manufacturer).

Furthermore, your manufacturer does not warranty the tires on your new car even though he tells you that you have a “bumper to bumper” warranty. The last time I checked, my tires were between my front and rear bumpers. Even though GM designed the tires on your Chevrolet, they have no responsibility if they are defective. The tire manufacturer bears that responsibility.

The OEM tires that came with your car can’t be replaced (which is a good thing) after they’ve worn out. And they will wear out much sooner than they should. This is because virtually all auto manufacturers specify very soft rubber which means they wear out too fast. Why would the manufacturer do that? They want that new car to have the smoothest ride possible, even at your expense of having to buy a new set of tires at half the mileage you should have to. When you test drive that brand new car and it rides very, very smoothly you’re more likely to buy it. You’ll find out how fast the tires wear out much later, and when you do you’ll blame it on the tire maker.

By the way, another way the car makers delude you into thinking your ride is very smooth is by recommending low tire inflation. The number you see on your door jamb or in your car’s owner’s manual is the car manufacturer’s recommended air pressure. The number on your tire is the tire maker’s recommendation. The number on the door jamb is the minimum and the number on the tire is the maximum. There’s typically a 10-pound difference.  I recommend you try the maximum and, if the ride’s too rough, split the difference. You’ll not only get longer tire wear but better gas mileage.

I can’t prove it, but I suspect another reason auto manufacturers design their own tires is to cut costs. By cutting a few corners in the design and specifications, they can increase their profit and/or cut the overall car price. If their purpose was to design a better tire, why wouldn’t they make these OEM tires available for the car owner to buy after the first set wears out? Many car owners “think” they’re replacing their Firestones or Michelins that were on their new car with the same tire, but they’re not. The tire might be the same size and look the same, but it’s a different model number.

One thing you should look for on your first set of replacement tires is the “tread wear index” which is molded into the side of your tires. This number will be 200 to 800. Your OEM tires will have a lower number because their made of softer rubber. If the tires that came on your car had a 200 tread wear index and you replaced them with 400, you should get twice the mileage on your second set of tires. The car might not ride as smoothly, but most people can’t even notice. And to my way of thinking, cutting you tires cost in half is pretty good compensation for a slightly rougher ride.

When replacing your tires, don’t get enamored by a sexy brand name. Brands aren’t always built on quality but also on advertising. Also, a famous brand tire makes all different kinds of tires to many different designs and specifications. Just because it’s a “Michelin” doesn’t necessarily mean it’s a good tire. If Michelin made that tire for an auto manufacturer who designed the tire with only two things in mind…low cost and soft ride, you didn’t get a very good tire. My recommendation is to check Consumer Reports for the best tire replacements. You’ll find tire brands recommended that you may never have heard about. The Japanese and Chinese make some very good tires but they have funny sounding names and you don’t see them advertised heavily on TV. 

Monday, January 16, 2017

Comments to the Federal Trade Commission

Regarding CarMax Selling Killer Cars



Below are my comments to pending litigation against CarMax, the largest seller of used cars in the USA. The litigation is being spearheaded by Rosemary Shahan, the president of CARS, Consumers for Auto Reliability and Safety. They are the largest car consumer advocate organization in the USA. CARS is the reason we have a “lemon law” in Florida and all 50 states. Shockingly, the Federal Trade Commission has ruled that CarMax and all used car retailers can advertise their cars as “Certified” and claim that they have passed a rigorous safety check, even though that car has a dangerous, potentially lethal recall. CARS and other consumer advocate organizations are suing the FTC to force them to change this terribly wrong ruling.


Attention: Federal Trade Commission

Subject: In the Matter of CarMax, Inc., File No. 142 3202 – Consent Agreement


I've been a car dealer since 1968 and am currently the CEO of Earl Stewart Toyota of North Palm Beach.

Virtually all of the other car dealers in my market (SE Florida between Orlando and Ft. Lauderdale) are actively selling used cars with dangerous recalls. Most of these are Takata airbag recalls. These cars are being aggressively advertised and sold, many of which have NO FIX AVAILABLE (the Takata airbag inflator is unavailable). I have taken the position of not retailing these cars because of my concern for the safety of my customers. When I trade-in one of these affected cars, I don't retail it unless I can replace the airbag inflator. If no airbag inflator is available, I store the car and wait for the time when it can be repaired and made safe.

This puts me at a severe competitive disadvantage to the other car dealers in my market. I must accept these used cars in trade on new or used cars because, if I don't, it will cost me a sale. I am unable to retail the used cars with defective airbags which makes it impossible for me to retail many high demand used cars (Honda is one of the most affected brands). Furthermore, I'm incurring the large depreciation expense of the stored, affected used cars that I cannot retail. I am wholesaling cars with only the passenger side airbag defective.

I have filed a lawsuit against one car dealer in my market under the Florida Deceptive and Unfair Trade Practices Act and will be filing similar lawsuits against more dealers.

I have mystery shopped over 100 car dealers in my market and learned that virtually all of them are selling these cars. Many of them do not even disclose the existence of the recall. Some even overtly deny the existence of the recall. Some tell the customers that there is a recall, but they can take it the dealer to have it fixed, when there is no fix available. The very few dealers that will not sell these cars (less than 5% of the dealers) advertise the cars for sale and use them as a bait and switch to sell the customer another car without the recall. I have shopped CarMax 3 times and they do not disclose the airbag recall unless asked. They advertise their cars as being safe because they have gone through their "rigorous" inspection process.

Very few used car buyers are aware of the severity of the Takata airbag problem. The media has downplayed this issue because of the importance of dealer advertising. The manufacturers are not speaking out because they fear the economic impact from litigation if it is made illegal to retail these cars. The NADA has taken the same position of negative economic impact on their dealers. I find it outrageous that "economic impact" can take precedent over human life.

I see this lack of awareness with my used car customers. They rarely ask about recalls when them buy used cars from me and I sell about 180 used cars monthly. Because of this lack of awareness, the other car dealers in my market are finding very easy to retail these cars. They are not only allowed to freely retail these cars but are under no obligation to disclose the recalls.

The car manufacturers, the dealers, the dealer associations, the legislators, and the regulators are all grossly negligent in not taking responsibility and action against this terribly dangerous threat to used car buyers. The danger is even greater than the current situation suggests. We know statistically that most recalled cars are NEVER REPAIRED...the older the car, the less likelihood of its being repaired. With the Takata airbag inflator, the older the car gets the greater the danger of a failure. Also, who knows how many deaths from the shrapnel of Takata airbags have actually


Until we can get a law passed making it illegal to sell killer cars with dangerous recalls, it’s BUYER BEWARE. Before you buy any used car, check the VIN with NHTSA and the car’s manufacturer, www.IsMyCarRecalled.com. You can also help make this illegal by signing my petition, www.AirbagRecallPetition.com.

Monday, December 12, 2016

How Much Is That Auto in the Window?

The title to this article and the illustration above was taken from an article in the Wall Street Journal. Please don’t accuse me of plagiarizing because I’m giving credit to the Wall Street Journal and the reporter, Charles Passy who wrote the article. You can read the article by clicking on www.HowMuchIsThatAutoInTheWindow.com 
The Wall Street Journal reporter interviewed the article. I sent him copies of invoices, buyer’s orders, dealer addendum labels, and names of people I knew around the US who were experts on unfair and deceptive advertising by car dealers. It was important to me because having what I’ve fought against for so many years written about by a national publication adds credibility. Not only does the Wall Street Journal have the largest circulation of any newspaper in America, but it’s also arguably the most respected daily publication. 
One might ask, why don’t local newspapers write stories about car dealers’ unfair and deceptive sales and advertising? The answer, like so many, is “follow the money”. Every local newspaper has an auto advertising section with most of, if not all of the dealers in that market. Newspapers seem to be the advertising choice of many dealers, although TV and online have definitely cut into their revenue in large metro markets. TV ads are so expensive that most dealers have no choice but to use the newspaper and online. Car dealers are the single largest source of ad revenue in many newspaper markets. 
Now I know that journalistic ethics require a separation between the news, editorial, and advertising departments. But that’s the way it used to be. Today local newspapers and even some national ones are struggling for survival. Ethics go out the window when it comes to survival. Would you steal food for your child if you believed you had no other recourse?
Another reason that I’m encouraged by this Wall Street Journal article is that every auto manufacturing executive reads this newspaper every day, especially articles about automobiles. Also, most car dealers also read the Wall Street Journal. Reading a negative report about deceptive car dealer sales practices in a highly respected national newspaper has got to get their attention. Many manufacturers and most car dealers seem to be in denial about how they endeavor to trick their customers with misleading, false ads and sales practices.
I have to believe the auto industry will awaken one day and realize that almost all other retailers in the 21st century have left car dealers in the dust. Most car dealers are still employing the “get ‘em in the door any way you can and make as big a profit as you can get away with” shabby tactics that were common practice fifty years ago. Most manufacturers and some dealers are beginning to realize that car dealers are held in the lowest esteem of any other retailer. Car sales and service complaints top the list and car dealers rank dead last or close to it in the annual Gallup poll, HONESTY AND ETHICS IN PROFESSIONS, along with Congressmen, lobbyists, and lawyers. 
I tell manufacturers and my fellow dealers that if we don’t regulate ourselves, you can bet the government will step in and do it for us. Federal Trade Commission is conducting hearings all around America asking for input about unfair and deceptive trade practices by car dealers. If the government steps in like they did with our nation’s banks, car dealers and manufacturers can expect to be up to their eyeballs in expensive regulations, red tape, and bureaucracy.