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Friday, June 29, 2007

When a Car Dealer Crosses the Line II

This is a follow-up on my last column which exposed a direct mail scam by a local car dealer. After the General Manager of this dealership mailed this letter out a short time ago, some recipients sent me copies. They either recognized that it was phony or they wanted my opinion. I did some research which proved that the claims this General Manager was making were false and discussed this in my last column.

After I wrote my last column, a customer sent me another letter he received from a different General Manager of a different car dealership which was the exact same letter as the first dealership mailed out. For clarification, I will repeat the text of both, identical letters below:

Dear ______,

You are receiving this letter because I have some very timely and important information about your vehicle. As General Manager of [Name of Dealership], I am making a personal appeal to purchase your vehicle. Because of a unique wholesale market condition, I have allocated additional funds and I am now in the position of being able to offer you over book value for your vehicle—whether you trade it in or I purchase it outright. My dilemma simply means that right now your vehicle is worth more than it was last month. Here’s why:

Normally, we purchase over 200 pre-owned vehicles per month at nationally recognized automotive auctions. Unfortunately, flood damaged Katrina vehicles (see enclosed article) are currently showing up at these auctions. I simply will not allow my auction buyers to risk our reputation by inadvertently purchasing one of these units and reselling it to one of our customers. Therefore, I have put a moratorium on any auction purchases until I am confident flood damaged vehicles are properly disclosed to our wholesale buyers.

This is a straight forward, genuine appeal to purchase your vehicle. I need local vehicles with local histories—vehicles with a pedigree so to speak. As always, [Name of Dealership] will pay off your trade balance as part of any final retail transaction. My purchase offer is in addition to all [Name of make of car] incentives, should you decide to maximize your market timing. But hurry, my appraisers have from now until the close of business, 6:00PM [Date] to extend thee purchase offers. Call me at [Dealership number] to receive a no obligation, written trade or purchase estimate.

Sincerely,

[Signature of General Manager]

As I said this exact letter was mailed out by two dealerships within 10 miles of each other. One was a Ford dealership and one was a Toyota dealership. One is owned by a public corporation and one is owned by a local person. There is no affiliation between the two. Obviously this direct mail scam is being sold to car dealers by some unscrupulous marketing company. Neither of these dealerships sells even close to 200 used cars a month and there would be no reason in the world for them to purchase “over 200 pre-owned vehicles per month at nationally recognized automotive auctions”. There are very likely lots of other dealerships sending out this same letter. If you receive the letter above, throw it in the trash. It is absolutely and shamelessly false.

Letters of this nature are peddled to dealers with promises of how many “suckers” they will bring into the dealers’ showrooms. Oftentimes they have a guarantee of a certain minimum percentage…3% would be a very effective mailer. The direct mail marketing company would guarantee that if the 10,000 mailers didn’t bring in at least 300 potential victims, they would run another promotion free. Dealers usually count on selling about one out of every five prospects, which means that this mailer could result in about 60 sales resulting from this lie.

You may ask how car dealers get away with something like this. The answer is that direct mail usually falls beneath the “radar” of the regulators. When you consider all of the deceptive advertising out there, the regulators have a hard enough time keeping the TV, radio, and newspaper advertising clean, advertising that is very visible to all. Only the unfortunate addressees usually see the direct mail advertising. My advice to you is to ignore all direct mail advertising unless you have personal knowledge of the integrity of the company.

10 comments:

  1. Everyone, the reason why they are allowed to be sent out is because they are legal and legit. Earl Stewart wants you to think that he is the only honest dealer in this country. Well he isn't. Dealers send out direct mail with all sorts of different sales approaches. The customers resond to the ones that best fits them. I find it amazing how this old man distorts the truth. The best deal is the one you ask for. Earl Stewart does not allow you to ask for the best deal because he has built in profit that he can not loose because he does not charge the dealer fee. He has to pay to run his dealership somehow. If he doesn't charge a dealer fee than he has to build it in the profit of the vehicle. Please don't let Earl Stewart make you believe that he makes less money than any other Toyota dealership. Check public records and you will see he is one of the most profitalbe dealers in the southeast and it is not because he has so many customers. It has everything to do with making as much money on a car sale as he can. The average Toyota dealership in this country makes over 2 million a year. Earl Stewart makes more than that. Wake up people. No one owns a business and does it for free. He is not different than any one else. One other thing I might add. The reason why he wants all his customers able to reach him without fail is so he can fix the problem that is company has created before it turns into a legal issue. This gives him direct access to the source. He won't change his business practice he just buys your silence. Wake Up.

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  2. Okay. Last time. It could get very tiring responding to each comment left by "Anonymous" (a very popular alias today). Earl Stewart is legitimate. Of course he makes a profit - I can't find anything in any of his writings that claims otherwise. He just does it without deception. He probably does make more money than other Toyota dealers. I hope he does! Read the posts that seem to scare you so much, Mr. Anonymous, and you might learn something.

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  3. Alice you must be a friend or relative to Mr. Earl Stewart. First, I am not in the car business so he has not riled up the competition. Second, I am an honest business man who is sick by the way Earl Stewart Toyota practices business. Lastly, no one said he shouldn't make a profit. It's how you make a profit. Deceptive practices and lies is no way to make a profit. Again you must be related to him somehow and you must profit from his lies and cheating ways. Thanks for the feed back.

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  4. Alice in North Palm BeachAugust 12, 2007 1:50 PM

    Anonymous, I am not related to Earl Stewart, but I did meet him when I bought my first and second cars from him. He thanked me for my business in his showroom. He was very nice and sincere. Both times he handed me his business card. On the business card was his home phone number. I am 60 years old - I have NEVER been offered the home phone number of the owner of a business by the owner of any business. This man does not hide from anything, Mr. Anonymous. He puts himself out there and is accountable. You can try to label me as some kind of insider trying to help Earl Stewart and you'd be wrong. On the other hand, YOU sound like someone with an agenda.

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  5. Alice,

    You are right, I do have an agenda. That agenda is to expose this man as the criminal he is. I have never worked for him, but I sure know who he is. He has been here for a long time misleading and scamming people. I am glad he handed you a business card. So what! Do you think because he handed you a business card he is a crook. Guess what there a thousands and thousands of owners who do that. What does that mean? In most cases it is because they are small businesses and need to be there 24/7. In Earl Stewarts case it is because he runs a criminal operation and needs to know about things before they blow up in his face. Alice I hope you continue to have success with this man and his company, but one day I assure you I can say I told you so. He is a con and a crook and needs to be exposed.

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  6. Alice in North Palm BeachAugust 16, 2007 7:35 PM

    Give me the home phone number of one car dealer, then we'll talk.

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  7. Alice,

    What are we going to talk about. The fact that Earl is a con man or the fact that there are many honest business owners out there that give out there home phone number. Earl got this idea from the man that used to own Bortan Volvo. He has sense sold the store, but was always ready to speak to his customers at home as many other dealers do. Earl is a con man and continues to con you as well.

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  8. alice in north palm beachAugust 21, 2007 5:25 PM

    The number please...We're all waiting.

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  9. Alice Stewart,

    Please do a little research on your own. Again, just because a man gives you his home phone number this is supposed to make him a saint. Think not. Wake up and smell he roses. He is doing a good job on you. He has you convinced that having his home phone number on his business card is the sign of a great dealer. I beg to differ. He is a con.

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  10. Alice in North Palm BeachAugust 22, 2007 8:54 AM

    It looks like you have failed, Anonymous.

    Business people who routinely screw people and operate in an unethical manner hide behind layers of management and secretaries to shield themselves from angry customers. Earl Stewart doesn't need to hide or shield himself. Giving anybody and everybody his home telephone number is incontrovertible proof of this.

    You are a whack-job, Anonymous. This is obvious.

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