Thursday, December 28, 2006

WHAT CAN CHANGE THE WAY CAR DEALERS DO BUSINESS?

I just finished talking to a friend of mine, Al Loson, from Pt. St. Lucie. We met after he read my column in this newspaper on dealer fees. In case you missed that column, a dealer fee a. k. a. doc fee, and dealer prep fee is just another profit the dealer tacks on the car after he quotes you a price. Al is a retired business executive from up North who was extremely successful running his supermarkets in a highly ethical fashion. He is lobbying his legislator, Senator Ken Pruitt, on this issue. He is asking that Pruitt take the lead in changing Florida law so that dealer fees become illegal as they are in many states like California.

Al called me a few days ago when he saw part of a TV news show on WPTV, Channel 5, regarding this subject. He wanted to know if I had, but I missed it. I obtained the video tape from WPTV and Al and I watched it together this afternoon. It was based on a Wall Street Journal article which ran several weeks ago on this subject. The reporter did mention that Florida was one of the states that did not even have a cap on dealer fees. The reporter said that in Florida dealer fees could range as high as $600. This is inaccurate. I know of at least two dealers charging $895.

We also discussed other issues regarding the lack of ethics with many car dealers. We talked about bait and switch advertising, car invoices that dealers lead customers to believe is their true cost but actually has hundreds of dollars in hidden profits included, and illegal ads that were permitted to run because the Attorney General’s office was too understaffed to police car ads.

I told Al that I respected and admired how hard we was lobbying his legislator and for being such a strong advocate for ethical car advertising and sales practices. But, I also told him that I didn’t think he would have much luck. Car dealers have a powerful lobby in Tallahassee. Dealer associations are there to protect their dealers, not the consumers. Dealer associations would never advocate changing Florida law in such a manner that would negatively affect the profits of its dealers. With all due respect to all of our politicians, even our good politicians’ first duty and responsibility is to get elected. What good can a politician do if he doesn’t get elected and how can he get elected if he doesn’t “play ball” with those who fund his election? You can complain about this all day long but our political system is all about compromise and it is still the best system on the planet.

The way car dealers will begin to change is through evolution…natural selection and the survival of the fittest. This will be a very slow process, taking years. American consumers are getting smarter and smarter. They also have much greater resources of information available to them, especially through the Internet. With greater education and data resources they are also becoming more demanding and intolerant. The new American consumer will not patronize car dealers who try to lure them in by bait and switch ads. They will not pay an $895 dealer fee which is supposed to cover the dealer’s paperwork or new car get ready when it is really only additional profit for the dealer. The new American consumer will seek out car dealers where they can be treated with respect, courtesy, and integrity. When other dealers seeing these dealers selling more cars, service, and parts and prospering more than they, they will have an opportunity to change. And if they don’t change, they shall perish.

1 comment:

  1. I don't think you would make any of these comments if you sold fords in a non-metro market. How do you expect dealers to change when consumers think they should pay less than dealer cost for a car and then walk into any other form of retail store and pay what they are asking?? Your ideas are noble but there are other dealers who have tried 'your' methods who are no longer in business. You can treat customers right and still be entitled to make a profit. There are many dealers out there that are honest. I think most people can see that this is just an advertising ploy. Maybe next you will try free cars. I can't wait

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