Friday, October 05, 2007

Maybe Your Car Dealer is a Good Guy

I wrote the article below last year. It advises you what to do if you have a problem with a car dealership. I decided to run this article again after a conversation with Ted Smith, the president of the Florida Automobile Dealers Association.

Ted and I spoke the other day after he was called by a local reporter for the Palm Beach Post who is writing an article about me. This reporter told Ted that his research so far had found me to be a good and honest car dealer. Ted responded that, if he checked out any car dealer as carefully, this reporter would find that most car dealers are good and honest people too. I believe that.

The reason that car dealerships have a bad reputation, in general, is not because of direct dealings with the owners or general managers of the dealerships. It is though dealings with those employed by the owner/GM. This is why I give the advice you will read below about taking your complaint as high up the ladder of command as you can.



What to do if you are Treated Badly by a Car Dealer

Hopefully the sales or service experience with your car dealer went well. But, sometimes they don’t. Now what? The advice I give you applies to all business transactions, not just car dealerships.

Your first step should be to communicate your complaint ASAP to the General Manager or, preferably, the owner. Be sure that you are talking to the real owner or the real general manger. A General Manager is over all employees in the entire company. A general “sales” manager is not a General Manager. If you can’t reach the owner (Many car dealerships are either publicly owned or owned by absentee owners), ask to see the General Manager. Often times the owner or General Manager is not aware of everything that goes on with all of their customers and employees. They might have new employee that should not have been hired or received inadequate training. Or, they may simply have a “rotten apple” that should not be working there. The ease and speed with which you can meet and speak to a General Manager or an owner is a pretty good measure of the integrity of the company as whole. If the owner or General Manager cares enough about her customers to allow total access, it is probably a very good place to do business. In fact, it is a good idea to find this out before you do business.

If you cannot reach the owner or General Manager, contact the manufacturer who franchises the dealership. Car dealers have a contract with the manufacturer called a franchise agreement and this contractual agreement requires that they treat their customers with courtesy, efficiency and integrity. Most manufacturers have a customer hotline that allows you to call and register a complaint directly. The owner or General Manager of the dealership will be made aware of your complaint. As you might guess, the manufacturer has quite of bit of clout with their dealer. If a dealer does not live up to his side of the contract, his franchise could be canceled or not renewed.

The third step I recommend, if numbers one and two don’t work, is to contact a consumer agency like The Better Business Bureau or the County Office of Consumer Affairs. These agencies will send your complaint to the dealership and request a written reply. No car dealership or business wants an unanswered complaint in the file of a governmental or private consumer agency.

Your last resort is to contact an attorney. I list this last because hiring an attorney just about eliminates the possibility that you can quickly, amicably and inexpensively resolve your differences with the car dealer. Be very careful which attorney you choose. Try to choose one that is primarily interested in helping you and not in generating large fees for himself. Under the Florida Unfair and Deceptive Trade Practices Act, an attorney is entitled to his fees and costs from the defendant in a lawsuit if he wins. These fees can be much larger than the amount of your claim, motivating an unethical attorney to spend more time than is needed and dragging out a case to generate more fees than are necessary. This can be very dangerous for you because the car dealer’s attorney’s fees run roughly parallel to your lawyer’s and you can be held liable for those if you lose the case.

Hopefully you never have to resort to the final step of hiring a lawyer. In trying steps one, two, and three try to present your complaint as concisely and politely as possible. You have every right to be angry when you are taken advantage of, but try to let your anger subside before you speak to or write to someone about your problem. We all react negatively to someone who is profane, raises his voice, or is sarcastic. Your goal of communicating and resolving your complaint is best reached by communicating clearly, politely and concisely.

10 comments:

  1. Mr. Stewart,

    There are a lot of good Car Dealers with very good reputations. I know I work for one. Great reputation, very little complaints from customers, a straight and honest business ethic. I am very proud of working for a good Car Dealer. I also am proud that I work for a company that doesn't go around and bash other dealers. Our dealership proves to a customer that we are the right choice for them to do business with. We don't have to accuse others of wrong doing when in fact we can not judge another man. Our customers make the right decision to do business with us and we are very proud. We charge shop supplies but charge a fair and honest price for the service. We don't over charge for service to cover the costs of doing business. We show it right to the customer on the receipt. We let the customer negotiate the best price of the car. We don't dictate what the customer will pay. Our oil change is cheaper than yours and I charge shop supplies. I know why. You have to charge more to cover the higher cost of doing business. There is nothing wrong with that. The only difference is I show my customers what they are actually being charged. You don't then bash the dealers for charging shop supplies. Your service prices and labor rate are so much higher than mine and those of most of the dealers around you. I realize you have to cover the cost of shop supplies somewhere but why not show it to the customer instead of putting it in the higher cost of labor.

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  2. sick of Earl bashing!!!October 10, 2007 8:20 AM

    Earl Stewart wants to do things ethically. That's all. And he thinks he has carved out a niche because so many car dealers do not do things ethically. He lets everybody know about this niche and the difference he represents by educating consumers on the Internet, tv ads, newspaper columns, and lots and lots of free press (caused by the hooplah of his critics loudly objecting to his aggressive marketing style - like yourself). Hey "me" do you charge a delaer fee at your dealership? There is no way on earth to justify disguising pure profit as an official looking "fee" by printing it on your paperwork. That practice is indefensible. Spin it any way you want like you did with the shop supplies scam you run. If the the Ritz-Carlton charges $300 a night and tells you that rate up-front but the Marriot charges $120 and then tacks on a bunch of BS fees, who can say the customer is getting equal treatment? I'd rather spend more for an oil change at Earl Stewart than give my business to an old school shark like you and most of the car dealer scum out there. Tell me why many states regulate (read cap at something reasonable like $25) and even outlaw dealer fees. Explain why the state Senate is about to blow the whistle on you and your unfair business practices. The screaming that is being heard by you and Earls other competitors are the gut wrenching death throes of a lot of terminally ill dinosaurs. Rest in Peace.

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  3. It's obvious that you are Earl Stewart of someone working for him or related to him. You got very defensive. What I am trying to prove is that Earl says that shop supply charges are wrong. No they are not. They cover many expenses that all dealership must have to operate. The difference is Earl says they are wrong to try and build a case for himself when in fact all he does is jack up his prices. Again my prices are much cheaper even with shop supply charges than his are without. He is covering up and trying to say everyone else is wrong. He is wrong and I want people to see it. Yes, to answer your question I do charge a dealer fee. Again I show it to you and it is on your contract. It covers normal everyday business. From employee pay to mailing out contracts, to license fees you name it. The dealer fee covers all these charges. If I don't charge a dealer fee I will have to increase the profit in the car, like Earl does. Again the difference is I show you what you are paying for unlike Earl who just charges more and bashes the other dealers. You can defend him all you want and you can call me anything you want but customers are being scammed at Earl Stewart Toyota and hopefully the smart ones see it and are a little more cautious if they decide to do business there.

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  4. You're damn right I work for Earl!October 10, 2007 9:20 AM

    I work for Earl. I just made another post with the alias "you're damn right i work for earl". Let me ask you this: have you ever sold a car at MSRP and then added your dealer fee? Don't pretend that you sell every car with a healthy discount and you're only chance to recoup your profit is to add the fee. You and every other car dealer try to get list price (only dealers like Earl ask for MSRP and not "dealer's list price" with addendum and DIOs) and take list price when you get it. You work your deal and then you write it up. The difference between you and Earl is this: after you shake hands and say "congratulations we have a deal" you say, "oh, by the way, I need to add another $695 (or $795 or $895 or $995) to the price" the customer says "what for?" and you say "oh, that's just the dealer fee. We HAVE to charge that to everyone". That is deceptive and there is no argument that can possibly support it.

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  5. your damn right I work for Earl,

    Listen you and I both know that we all should ask for MSRP. Any person in business regardless if it is automotive or not should ask for MSRP. However, you and I both know that in this competitive world, economic issues, and a much smarter customer the likelyhood of anyway paying MSRP is rare. To answer you question yes I probally have sold a car at MSRP and the dealer fee also applied. I can honestly tell you I can't remember the last time that has happened. However if you charge a dealer fee you have to charge it to all. In MOST cases the customer has the number they want to purchase the vehicle for. Then the negotiations begin. Everyone agrees on the bottom line number and handshake is made and the deal is done. The dealer fee is in the FINAL price. Regardless of what you think happens that is reality. A customer honestly could care less what make up the bottom line number as long as it is the bottom line number they are asking for. So once again my point is you are in the same boat. You just can not cut back on the price of the car as far as I can because you KNOW you don't have a dealer fee. Most people will come in a say I am not paying a dealer fee no matter what and we end up discounting the car. There is no difference in what you are doing. I just hate that you guys try to pass yourselves off as some holier than thou dealership and everyone else is scum or scam artist. Everything about the dealership I work for is geared towards the customer. We sell more cars than you, we sell more service than you, our SSI and SPSI scores are higher than yours and I can assure you we are not cheating. I am sure you won't believe me but it is true. Lastly I would like to say I have never bashed your dealership to anyone on any public forum. Trust me I have had people complain about your company. My basic answer is the must have been having a bad day like we all do. What you are doing by bashing other dealerships on the blog and actively at your dealership is just low down profit motivated. You are trying to prove to customers that you are better when in fact you are not. You don't charge shop supplies or dealer fees but you are certainly not better than the dealership I work for and we prove it every single day.

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  6. You're damn right I work for Earl!October 10, 2007 1:12 PM

    "Me", it's all smoke and mirrors. You express yourself very well. You are clearly intelligent. Your last response makes you look bad, like a shifty politician. You have to fight back hard at what we are saying for your survival; I understand. It is unfair - this competition between you and I. You do not have the ability to eliminate the dealer fee at your dealership even though you would love to for two reasons: you know it's wrong and because you know it makes it easier and friendlier between dealer and customer. You say that you have to charge every customer the fee to avoid charges of discrimination. That is true. But the dealer can decide to get rid of it altogether, like Earl Stewart did. Either your owner is too greedy or too frightened to do this. Either way, don't worry too much - eventually the playing field will be levelled when the law bans the dealer fee in Florida. In the meantime, we will enjoy a huge competitive advantage. But even then, Earl Stewart Toyota will be remembered as the dealer who eliminated this deceptive business practice on their own accord and were not forced to like the rest.

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  7. I have to believe that you are Earl Stewart or one of his sons. You talk so much like him it is scary. Anyway, there are a lot of things you are right about. Believe it or not we are on opposite sides of the same situation. I too believe that you have some smarts about you. What I have been trying to get across, without bashing you guys, is that no matter if I take out the fees or I don't the gross profit of the vehicles will be roughly the same. If a deal at my dealership with fees is the same profit at your dealership without the fees what difference does it make. The customer recieved the same deal. You are right in some manner. The biggest obsticle is changing the mindset of the entire sales staff to change the way the work a deal. Without dealer fees you can not longer count on that dollar amont and can not be as aggressive with the discount. Regardless you are still going to make the same profit. It has nothing to do with being greedy. It all has to do with change. All I have been trying to say and I said this to Earl on a blog weeks ago is that I don't believe bashing other dealers around you is the right way to be competitive. I don't believe creating distrust in a customers mind for every other dealer around you is good for our industry. I don't believe in picking on someone with "red" hair because you have "brown" hair solves anything. I believe is competition. Actually that is the one of the reasons I love this business. I would hate if we were all the same, that would mean anyone could do this job. I believe there are better way to be competitive than bashing dealers, regardless of what your beliefs are. I asked Earl a month ago that he should concentrate on telling his customers what he is all about and leave out the bashing of the other dealers. Since that will never happen it looks like you and I can debate forever. Lastly and please believe me I am not the Barry person. I have known of the Stewart family for years. Back to the old, old days. I knew Earl when he was not on the high horse of his. I knew a lot of his employees. I knew his old service manager when he used to charge his labor rate depending on the vehicle you drove. The old days. Earl has met God and wants to change. Great, I'm actually glad for him, but I just hate the way he goes around it. Like I said before because you don't charge dealer fees and we do will not change the amount of cars we sell or the amount of service we sell. People will not buy a car from you instead of me because of it so on goes the competition. I just wish it would get friendly again.

    By the way tell Stu congrats on his third. I hope he knows what is causing it! Ha Ha.

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  8. You're damn right I work for Earl!October 10, 2007 10:14 PM

    And peace has returned to the land...

    Can't resist: our volume soared when we eliminated the dealer fee. So you can do more business without it. Much love, my brother :)

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  9. I can't resist either. Didn't you volume store because you built a brand new dealership right off of 95 instead of the hell hole you guys where in down on Federal? Just a thought.

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  10. you're damn right I work for earlOctober 11, 2007 11:36 AM

    You are confusing us with someone else. Our dealership is still on Federal. We re-built the showroom and service facilities on the same property we've had since 1975. Our volume jumped before we built the new facilities. We averaged 120-140 new before we dropped the dealer fee. We cracked 200 while we were operating out of the old showroom in the middle of a chaotic, unfinished construction site. SET brass took us out on the Gallant Lady to celebrate that milestone. We were approaching 300 new units about the exact time we moved into the new showroom. We experienced another boost in volume after we put our message out there with the TV spots. I think the first surge had to do mainly with word getting out about the dealer fee getting canned and the energy we all felt during the construction project.

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