Monday, May 20, 2019

Good People Make Good Car Dealerships

In my columns over the years I’ve always advocated carefully choosing the car dealership that you buy your vehicle from or allow to service it. I still believe this is important. In fact, I publish a list of dealers that I recommend you buy your car from and a list that I recommend you avoid,www.GoodDealerBadDealerList.com. We’ve all visited a restaurant or retail store and had a terrible experience with a waitress, sales person, or other employee and never returned. Yet, we’ll hear friends recommending the same store that we swore never to patronize. We condemned an entire company because of one person.

I also wrote a column a couple of years ago in which I suggested that you carefully choose the individual who advises you and sells you service on your car. These individuals are really commissioned sales people who sell you service just like car sales people sell you cars. Unfortunately, most dealerships call them something else like “assistant service manager” or service advisor. In my dealership we used to call them Assistant Service Managers because that’s the term that Toyota uses. We now call them “service advisors” because too many people thought they were dealing with the service manager. In all candor, I’d feel more comfortable naming them what they are, “service sales people” and I may make that change.
It occurred to me that the same recommendation applies to all companies, not just car dealerships and it applies to all departments in a company. Whichever car dealership you choose, take the time to pick and choose those individuals you deal with. Car dealerships, just like other organizations, are nothing more than the sum of their parts…their people. You should get to know the person who sells you service and, if you don’t like him, ask for another person to handle your service requirements. You should also meet and cultivate a manager in the service department.

The same holds for the sales department. When you buy a car, don’t settle for the first salesman who approaches you. For example, if you’re a woman you may feel more comfortable dealing with another woman. Or, if your first language is Spanish or Cajun, you may feel more comfortable with one who can converse with you in your native tongue. Don’t be shy about asking, and don’t feel bad about hurting the feelings of the first sales person. An automobile is the 2nd largest purchase most people make and it’s very important that you feel comfortable with the person selling it to you. Furthermore, if after dealing with your sales person for a while, you think you made a bad choice, ask to speak to the sales manager or general manager. Believe me, car buyers hold all the cards (until they get your money), and no sane sales manager is going to lose a sale because a prospective customer doesn’t like or trust the sales person she’s dealing with. He will handle your sale personally or choose another sales person you do feel good about.

Car dealerships have other departments including parts, finance and insurance, accounting, and some have body shops. My same recommendation applies to all departments. A word of caution, when you ask to speak to a manager, be sure you’re really are truly speaking to one. Car dealerships are notorious for calling rank and file employees managers to trick the customer.

My purpose in writing this column is in realization of the fact that there are no perfect companies, especially car dealerships and that includes mine. I employ about 160 individuals and I would be less than candid if I didn’t say I have a few rotten apples in my barrel. Unfortunately, I don’t know who they are and finding them is a continuous work in progress. The same thing applies to all companies including car dealerships. In my list of recommended dealers, there are some employees of those dealerships who would take advantage of you, but most would not. In those dealerships that I recommend you don’t buy your car from, there may be a few honest, courteous employees. Then there are all the dealerships that I don’t put in either category. Your odds of finding the right individual are much better if you patronize a good company or car dealership, but never let your guard down.

Just stay away from the ones that I recommend you don’t deal with. In every organization there’s a tipping point. A great company reaches a critical mass of good employees and as their reputation grows, more good employees from other companies seek to be employed there. Honest, hardworking, courteous people enjoy working in an environment where others are like them. The same holds true for evil dealerships and bad companies (those on my “don’t buy” list). A good person with a conscience has a very difficult time functioning in an environment where, from top management all the way down, the design is to trick and take advantage of customers. These few good people don’t last long in evil dealerships and flee to a place where they can treat their customers in a manner that lets them sleep at night.

Monday, May 13, 2019

Buying a Car When You Have a Credit Problem

There are fewer things more sensitive or embarrassing than having to share your personal credit problems with a stranger. Having credit problems can also put many buyers in a weakened and defensive position when buying a car. Many people with bad, or too little, credit feel like the car dealer is somehow “doing them a favor” by selling them a car and getting them financed. Make no mistake about it. A car dealer is probably making more money selling a person with bad credit a car than one with good credit. If you have a credit problem, go about buying a car with the same care and due diligence as if you had the very best credit. Shop and compare your financing, your interest rate, and your trade-in allowance. Get at least three quotes on each of these.

Lenders who specialize in lending to those with bad credit are known as “special finance” lenders. Many of these lenders charge the dealer a large upfront fee, as much as $2,500. Legally, the dealer is not supposed to add this fee to the price of the car you buy but, in the real world, the price of the car is usually higher as the result of this fee. In addition to an upfront fee, the interest rates are very high from special finance lenders. Because they anticipate a much higher amount of repossession losses, they must make more on each transaction. Don’t automatically accept a dealer’s opinion that you must finance through such a lender. There are many conventional banks these days that loan to people with bad credit. Their interest rates are lower, and they don’t charge large upfront fees.

There is much fraud in special finance lending. Credit applications are falsified to show more time on the job, higher incomes, etc. W-2 forms and check stubs are counterfeited. Buyer’s orders show accessories and equipment that do not really exist on the car. Hold checks, or promissory notes are misrepresented as cash down payment. Co-signers’ signatures are forged. Confederates pose as employers, answering false phone numbers to verify employment. These falsifications are performed by finance managers, salesmen, brokers for special finance lenders (who are paid on commission) and the customers themselves. If you sign a credit application, be sure that you know all the information on that application is accurate. Be sure that you understand and agree to all parts of the transaction including down payments, accessories on the car, etc. Never be a party to falsifying information to a lender to obtain a loan. This is a criminal offense.

Advertisements aimed at people with bad credit usually exaggerate with claims like, “We finance everyone”, “Wanted, good people with bad credit”, “No credit, no problem”, and, my favorite, “No credit application refused” (it doesn’t say your loan won’t be refused, just your application). My advice is to ignore these kinds of ads and these kinds of dealers. Their strategy is to take advantage of people with bad credit who they believe will buy any car, pay any amount of interest, and any profit to the dealers if the dealer can get them a loan.

It is common practice in Florida to encourage the car buyer to drive the car home immediately upon signing all of the papers. In some states like New York this is not permitted until all the car has been registered with the state in the new owner’s name. The reason for this immediate delivery (commonly referred to as the “spot delivery”) is to discourage and possibly even prevent the buyer from changing his mind. Taking possession of the car is a legal consideration making the purchase more binding. I recommend that you not rush the purchase or the delivery. For one thing you want to be sure that the car is exactly the way you want it…clean inside and out, all the accessories properly installed, no dings, dents or scratches, and that you have a complete understanding of how to operate all of the features of the vehicle.

I mention the risk of the “spot delivery” in this column on buying a car with bad credit because it can be especially harmful to someone whose credit is denied after the car has been delivered. You will most likely be required to sign a “Rescission Agreement” before you drive the car home. This is a legal document which requires you to return the car if your credit is denied. You will probably be told that your credit will be approved, but sometimes the dealer is wrong. The rescission agreement will have a charge for time and mileage that you have put on the car you are driving. Usually this is a very high charge from 25 cents per mile plus $50 per day and higher. It can take weeks for a special finance lender to rule on a credit application. If your credit is denied you could owe the dealer thousands of dollars which the down payment you made might not even cover.

As frightening as all the above may sound, the one single thing you can do to prevent bad things from happening when you purchase a car is to choose your car dealer very carefully. How long has he been in business? What is his track record with the Better Business Bureau, the County Office for Consumer Affairs, and the Florida Attorney General’s Office? Check his Google rating. Ask friends, neighbors, or relatives who have dealt with this car dealer what their experiences have been like. Choosing a good dealer with integrity will resolve 95% of all your concerns.

Monday, May 06, 2019

THE LOWEST PRICED CAR CAN END UP BEING THE MOST EXPENSIVE


Too often car buyers focus on buying the car that fulfills their preferences of styling, size, and accessories that they can buy for the lowest price. There are other important cost considerations you should look at before buying the cheapest alternative.

Resale value is the number one consideration that is most often overlooked by car buyers. All cars depreciate in value, but some hold their value a lot better than others. You might save a thousand dollars by choosing to buy one used or new car over another more expensive make and model. But if the make and model that cost $1,000 more, held its value by $2,000 more over the 3 years you owned the car before trading it back in, the “lowest priced car” was really $1,000 more expensive.

There are several ways you can check on how much cars will depreciate. A good one is to check the resale value of that same make of car that is 3 or 4 years old. You can also find this information on the Internet. Kelly Blue Book, for example is www.KBB.com, www.Edmunds.com, and www.ALG.com are good sources. If you are thinking about buying a new 2019 car of a particular model and make, find out what a 2016 model sells for today. Compare other makes and models.

Maintenance and repair cost are the second biggest factors in measuring the true cost of a car. When a car has a relatively higher depreciation, one of the biggest reasons is probably because it is more prone to break down. CheckConsumer Reports or Google the year make and model to find the projected repair histories of the cars you are comparing. Saving $1,000 on a make and model is not very significant when you are facing the cost of a blown transmission or engine. Does the manufacturer provide complimentary maintenance? This should be a factor to consider as well.

Big cash rebates and big discounts are not necessarily a good thing. First you must ask yourself, why is it necessary for this manufacturer to giving me such a big cash rebate (I have seen them advertised as high as $11,000) to sell his car? You will generally find that the manufacturers of higher quality, higher demand cars offer fewer rebates and discounts. These are also the manufacturers of cars that depreciate less and cost less in terms of repairs. Big rebates and discounts also negatively affect a cars resale value. It’s what you could call “vicious cycle”. A car is hard to sell because of its high repair costs and high depreciation so the manufacturer pays a big cash rebate to sell it. The rebate lowers the value of the used car of that make and model because the price of a used car directly tied to the cost of that same new car.

You will be surprised how much the color of the car you buy can affect the resale value. Think about it. The color was very important to you when you bought your last car. It is just as important to the person who will be buying the car you trade in. The most popular colors are white, silver, beige, and black. If you have a “thing” for green, blue, orange, or another unusual color, it can negatively affect the resale value of that car by over $2,000. I’m not suggesting that you always buy a white car, but if you like white, silver, beige, and black you are going to get more money for that trade-in than if you like blue and green. Bright colors can be good for certain models. Red is a popular convertible color for example.

Be sure to check your cost of insurance before you make a final decision. Cars with the most safety features, highly rated in collision and rollover tests, relatively low cost of repair especially for bumpers, and non high-performance cars have much lower insurance rates.

Cars are no different than any product that you buy when it comes to the principal of “the cheapest product is usually not the best value”. You buy a quality pair of shoes, paying more than you would for a cheap, poorly made pair because they will look good and wear many times longer. Shopping for the lowest price is a very good idea, but only after you have chosen a car that has low depreciation, operating costs, and cost of repair.

Monday, April 29, 2019

Car Salesmen Don’t Look or Talk Like Car Salesmen Anymore


 - by Earl Stewart 

Many of my readers know that I send mystery shoppers weekly to car dealerships around South Florida so that I can learn how they are selling, leasing and servicing cars. I do this for two reasons. The first is that this is a common practice for all businesses to learn how their competition operates and to have the competitive edge you really need to know how your competitors do business. The second reason is that I feature a mystery shopping report on my weekly radio show, Earl Stewart on Cars that airs between 9 and 10 every Saturday morning. I've done hundreds of these mystery shops and I've noticed an interesting trend over the years.

Back in the day, car salesmen looked and sounded like what many people consider the stereotype for a car salesman. You know what I mean, gold chains, diamond pinkie ring, sunglasses, loud shirt, and white shoes. As car buyers became more educated, sophisticated, and demanding, it didn't take car dealers long to realize that they had to dress their car salesmen in a nicer fashion, “lipstick on a pig”, But even though they looked nicer, they sounded and acted pretty much the same.

With the advent of the Internet, Google, today’s consumer has made a quantum leap in knowledge, education and sophistication. Today’s buyer of virtually everything is far more demanding and far less tolerant of deceptive advertising and sales tactics.

The most recent shift I've seen in car dealers’ efforts to make their salesmen seem less threatening is in who they hire and how they train their salesmen to behave. More and more car dealers are hiring younger sales people, and fewer older, experienced salesmen. These dealers want their sales people to treat their customers with courtesy and respect and gain their confidence. We've all heard the terms con man and con-artist. We also know the verb, “to con”. To con somebody means to steal from them as in Bernie Madoff. Did you know that “con” is short for confidence? A successful con man is good at gaining the confidence of his victim. The con man’s appearance and how he sounds play a critical role in this. I often hear people who were taken advantage of and stolen from say, “He looked and sounded like such a nice person”. Think about that for a minute. How successful could a crook be who looked and sounded like one?

The important thing to remember is that it’s usually not the car salesman who is responsible for the deception. Certainly, he cannot be held accountable for the deceptive and often illegal advertising. In fact, many car sales people hate the advertising that brings prospective customers into the car dealership by false and misleading promises. Especially in today’s economy, many people work in car dealerships because they can’t find a job anywhere else. Imagine how embarrassing it must be to a salesman, new to the car business, when he must try to explain away a bait and switch advertisement. How can you tell a prospective customer that the “sale car” on the showroom floor costs several thousands of dollars more than the one advertised on TV? In my mystery shops, it’s becoming more and more common for the salesman to “nicely” tell my shopper when she asks to see the advertised car that they can’t really buy the car for that price and to apologize for the deceptive ad! These sales people will say right up front that the ad is just to get you to come in so that they can try to sell you a car at higher price.

Also, the salesman is often an innocent victim when it comes to the deceptive sales practices. Many car dealers use attractive, friendly sounding sales people to lure the fly into the web. It’s been proven in studies that customers put more stock in the individual they deal with at a store than the store itself. If that salesman can capture your trust and especially if he can make you like him, the car dealership is 90% closer to closing the sale.

Today’s sales people are more “greeters” than sales people. Many car sales people today are not privy to the cost or even the selling price of the cars they “sell”. The true cost of the car is known only by the sales managers who are also known as closers and team leaders. These managers are also the only ones authorized to quote a price. They also appraise your trade-in. The interest rates you pay and the warranties, maintenance plans, GAP insurance, etc. that you buy are all handled by mangers.

The bottom line is that it’s not the rude, aggressive car salesman you need to be afraid of. There are very few of those around anymore. The car dealers have wised up and you will be dealing with young, attractive, non-threatening, and polite sales people today. In many cases, they know very little about the unfair and deceptive sales and advertising. What little they do know makes them feel bad, but they need the job and want to put food on the table for their family. As much as you like this salesman or saleswoman, don’t give him or her your trust when it comes getting a fair price, trade-in allowance, lease payment, or interest rate. That nice, smiling sales person is the dealer’s pawn and is “just following orders”. Verify all the numbers your new friend gives you by competitively shopping and comparing at least two other car dealers.

Monday, April 22, 2019

The Lemon Law: Your Nuclear Option

By Earl Stewart
Lemon laws are state laws which give rights to purchasers of new vehicles if they find that they have bought a car with a defect that cannot be fixed in a timely fashion by the dealer or the manufacturer. Every states lemon law is somewhat different, but they all have a lot in common and are aimed at the same result. Most car buyers have misconceptions of the lemon law. These are some the most common ones: The car owners think they are going against their car dealer when they are really going against their car’s manufacturer. If you prevail it costs the car dealer nothing. The manufacturer pays. The law applies only to cars purchased as new, not used. If you win a lemon law dispute, the manufacturer or dealer does not simply replace your car with a brand new on. The amount of credit you win toward a replacement vehicle is arrived at by deducting a charge for the usage of your lemon car based on time and mileage.

The complete lemon law process is a difficult and time-consuming task for all concerned… you, the car dealer, and the manufacturer. It’s difficult for you because the law requires specific and extensive documentation. You must have allowed your dealer to try to fix the problem at least three times and you must have detailed written documentation of this. You must be sure that your complaint is clearly spelled out by the dealer on your repair order and that his failure to fix it is also a matter of written record. After three times, you must notify the manufacturer by certified letter that you are invoking the lemon law. Now the manufacturer has one last chance to fix your car. At this time, the manufacturer may take your car to another dealer who he feels is more competent in repairing your car. If the fourth attempt to fix your car fails, your case is assigned to a board of arbitrators. Their ruling is final. This entire process usually takes a very long time. Several months is not uncommon. Meanwhile, you’re saddled with a car that has a problem nobody can fix.

When you formally invoke the lemon law with your certified letter, you sever all communications with the manufacturer other than formal, legal communications as dictated by the law. The manufacturer considers you a legal adversary and their attorneys consider anything they say to you as something that can be used against them in the arbitration. At this point they are legally barred from fixing your car or talking to you about fixing your car.

All the above is why I advise that you use the lemon law only as a last resort…the nuclear option. Put emotion aside and focus on what your purpose should be, which is to have a car that you can drive without the problem that has been driving your crazy since you bought it. Your priority should not be to punish the dealer because, as I already said, he suffers nothing from your winning a lemon law decision. You are punishing the manufacturer to some extent, but this is “business as usual” to all manufacturers who fight (and usually win) thousands of lemon laws annually. What I’m suggesting is that you might want to consider giving the dealer and manufacturer a little more time to fix your car after the first three attempts. If they look like they are sincere and trying hard, it could save you a lot of time driving your broken car (not to mention the mental anguish) compared to waiting months for the lemon law process to work itself out.

I’m not saying that you shouldn’t tell the dealer and manufacturer that you will invoke the lemon law if you have no other choice. You should do that. You should let both the dealer and the manufacturer know in no uncertain terms that you have meticulous documentation of their failed efforts to fix your car, you have familiarized yourself completely with the specifics of your state’s lemon law, and you will not hesitate to invoke it if you are left no other choice. This will instill a sense of urgency to fix your car ASAP if it’s within their abilities. The reason is the dealer and the manufacturer want to keep you as a customer. In fact, the dealer may stretch to give you a better deal on a new car to replace yours than you would ever otherwise have gotten. He can’t do that once the lemon law has been invoked because he would be trading in a “lemon”. A “legal lemon” has the same stigma as a flood car or totaled car that has been rebuilt. The manufacturer not only wants to keep you as a customer but wants to avoid the cost of arbitration (the manufacturer is responsible for all the costs… the cost of disposing of a lemon, and the cost of the damage to their reputation by chalking up another lemon laws loss in the record books. For more information about the lemon law, Florida residents can call the lemon law hotline, 800 321-5366 or you can click this link: http://www.myfloridalegal.com/lemonlaw.

Monday, April 15, 2019

FLORIDA CAR BUYERS BEWARE

By Earl Stewart

This front-page headline appeared in last week in USA Today. I’ll summarize the story for you: Car dealers and their associations are lobbying legislation into state laws to preserve their legal right to sell you a used car with a dangerous recall, like a defective Takata airbag. The law they’re advocating “sounds” like a good law until you think about it. The law is to require car dealers to “disclose” to the buyer that the car they’re buying has a dangerous recall. The word “disclose” when applied to car dealers becomes an oxymoron. Car dealers bury their “disclosures” in ultra-fine print, flashed on the TV screen, webpage, or PC monitor in a fraction of the time you can read it…that is, if you could even see it. Car dealers believe that, but getting these laws passed, they’ll dissuade federal and

state government from doing what they should have done years ago…MAKE IT ILLEGAL TO SELL A VEHICLE WITH A DANGEROUS SAFETY RECALL. By the way, there’s still no law in Florida requiring car dealers to disclose dangerous recalls.

Can anyone explain to me why it’s legal to sell you a vehicle with a dangerous recall? In fact, it’s even legal to sell you a vehicle with a dangerous recall that CANNOT BE REPAIRED. Thousands of used vehicles are sold every day with defective Takata airbags that cannot be fixed because the parts to fix them are unavailable.

I’ll answer my own question of why this is legal. Auto manufacturers and car dealers are afraid of the huge economic impact upon them if such a law were passed. The Florida Auto Dealers Association, FADA (and all other state dealers’ associations) the National Auto Dealers Association NADA, and Big Auto (VW, Toyota, GM, Ford, Honda, etc), combined, have ENORMOUS POLITICAL CLOUT. The auto manufacturer-auto dealer syndicate makes the NRA look “politically weak by comparison”.

So, what are Florida used car buyers to do? Contact Governor Ron DeSantis, Attorney General Ashley Moody, and your state senators and representatives. I tried for two years with Rick Scott and Pam Bondi to no avail. The more likely successful course of action is to check every used car you buy at www.SaferCar.gov, the website for the National Highway Traffic Safety Association. DO NOT BUY A USED CAR UNTIL YOU CHECK YOUR VIN AND VERIFIED IT HAS NO OUTSTANDING SAFETY RECALLS.

Monday, April 08, 2019

FOR IMMEDIATE RELEASE: Florida Attorney General’s Seniors vs Crime presents free program April 25 on How Not to Get Ripped Off when Buying, Leasing or Maintaining a Vehicle


Earl and Nancy Stewart to be Featured Speakers

Thanks to our new Florida Attorney General, Ashley Moody and her Seniors vs. Crime members, Tony Zappone, Sheila Butler and Frank Starnella for inviting Nancy Stewart and me to speak to the seniors of South Florida this April 25th.

Attorney General Ashley Moody has clearly prioritized doing more to protect Florida’s large and growing elderly population from fraud and abuse. She recently announced the formation of Florida’s Senior Protection Team that will work closely with Seniors vs. Crime and the Florida Department of Law Enforcement.

The details of our public seminar on how to avoid being taken advantage of when buying, leasing, maintaining or repairing a vehicle are shown below. If you are a senior, or know seniors that can benefit from our seminar, please book this time and location in your calendar or ask them to: April 25, Thursday, 2 PM at 900 Brandywine Road is located just west of the I-95, Exit # 53, Palm Beach Lakes Blvd. interchange, located on the United Methodist Church campus. Google Maps link is https://goo.gl/maps/7qSXbXU4yV72.

PRESS RELEASE:
Seniors vs Crime, a special project of the Florida Attorney General’s Office, is presenting a free public seminar to educate senior citizens on how they can prevent being victimized when buying, leasing or maintaining their vehicle. The program will be on Thursday, April 25 at 2 p.m. at 900 Brandywine Road in West Palm Beach, at the Gathering Place on the United Methodist Church of the Palm Beaches Campus. Earl and Nancy Stewart will be the featured speakers. The first 500 attendees will receive a free copy of Earl Stewart’s book “Confessions of a Recovering Car Dealer.” He is the owner of Earl Stewart Toyota in North Palm Beach. Light refreshments will be served following the program.

Topics to be covered include how to avoid tricks and scams when buying or leasing a vehicle, how to determine if buying or leasing is the best option, what to look for in a qualified mechanic or body shop, what vehicle safety options are helpful for senior drivers, how to get the most money for a trade in, are extended warranties a smart buy, how to shop for the best financing, and more. Attendees can submit questions ahead of time to earl@EarlOnCars.com with Seniors vs Crime in the subject line or text questions to 772-497-6530.


Reserve a seat by calling 561-844-3461 
or by emailing sandrav@estoyota.com
Reservations are encouraged but not required. 


“We’re pleased to offer local seniors the opportunity to learn how to avoid being ripped off when buying or maintaining their vehicle,” said Tony Zappone, a member of the Palm Beach County Seniors vs Crime organization. “Crime prevention is our key mission, and to help seniors avoid these costly mistakes is important because investing in a vehicle and maintaining it are among the biggest expenses of our age group, and an area where many are most at risk.”

“Being a senior myself, and in the car business for more than 50 years, I have too often seen older people taken advantage of and it is very upsetting,” Earl Stewart said. “Cheating anyone is wrong, but taking advantage of someone on a fixed or limited income is especially bad. We are happy to be able to pull the veil back and reveal some of the ‘tricks of the trade’ to educate people so they can avoid becoming victims.” Nancy Stewart will address some of the issues that older women face when buying or maintaining their vehicles. “Knowledge is power and we want them to go into the process of buying or maintaining their vehicle with as much information as possible,” she said.
The program site at 900 Brandywine Road is located just west of the I-95 – Palm Beach Lakes Blvd. interchange. Google Maps link is https://goo.gl/maps/7qSXbXU4yV72. Plenty of free parking is available immediately adjacent to the meeting site and the building is fully accessible.

The Seniors Vs Crime Project is sponsored by the Attorney General to reinforce the message of crime prevention and to provide methods by which Florida’s senior population can be alerted to consumer fraud, con games, and other criminal acts. The purpose of the Seniors Vs Crime Project is twofold: to offer crime prevention seminars to Florida's elderly and to provide comprehensive training for law enforcement officers and other criminal justice practitioners in understanding how the aging population impacts upon the role of police and other criminal justice professionals.

The program has more than 2,000 volunteers staffing 44 local offices throughout Florida. For more information about Seniors vs Crime visit www.seniorsvscrime.com or call 1-800-203-3099.



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