Friday, October 26, 2007

Nitrogen Scam Foisted on Palm Tran

I’m rerunning below the column I wrote last year about Nitrogen because it came to my attention that the Palm Beach County bus system, Palm Tran, was planning on investing over $80,000 for equipment to fill their bus’ tires with Nitrogen.

I wrote County Commissioner, Karen Marcus, an email explaining why this was a mistake and I sent her a copy of the column which you can read below, if you missed it last year. Below is a copy of my email:

Good morning, Mrs. Marcus,

Gary Todd, a friend of mine, told me this morning that Palm Tran had spent $65,000 on Nitrogen tire inflation systems purportedly to improve fuel economy and tire life in Palm Beach County buses.

I Googled the news article in last Friday’s PB Post and it gave as a reason for this decision to spend taxpayers’ money that “NASCAR and commercial and military aircraft” use Nitrogen in their tires.

NASCAR and commercial and military airplanes use Nitrogen in their tires for entirely different reasons than reducing tire wear and increasing fuel economy. Race cars and landing airplanes are subjected to extremely high temperatures never experienced in car or bus tires. Airplanes also experience extremes in atmospheric pressure which car and bus tires don’t.

I’ve attached a column that I wrote for the Hometown News last year, “Don’t Pay for Nitrogen in Your Tires”. I wrote this article to benefit those who might persuaded to pay for Nitrogen instead of free air [which is already 78% Nitrogen] to put in their tires. I even considered doing this for my customers at my Toyota dealerships and for my rental car fleet until I did some research on the pros and cons. I even bought canisters of Nitrogen and ran pure Nitrogen alternatively with air in my rental fleet for a period of time. The bottom line is that there is no measurable difference in fuel economy or tire wear with air v. s. Nitrogen.

Please read my article and feel free to call me to discuss this at any time. My cell number is 561 358-1474. I wouldn’t expect you to take my word for cancelling this expenditure, but if you instruct Palm Tran to conduct an actual test of fuel economy and tire wear with and without Nitrogen, I think they will come to the same conclusion as I.

Best wishes,
Earl


There was an article in the October 25th Wall Street Journal which concluded that Nitrogen was of no useful, measurable benefits to fuel economy, safety, or tire life. It concluded that if the Nitrogen was free, no harm can result from using it.

CNN recently ran a story exposing the Nitrogen scam you can see the video clip on this story by clicking on http://www.cnn.com/video/#/video/tech/2007/10/26/hunter.check.your.tires.cnn?iref=videosearch. The article discussed a study that Consumer Reports did on the effectiveness of Nitrogen in tires and interviewed the CR tester. Consumer Report filled a large number of tires of all makes and models, half with air and half with pure Nitrogen. After one year, there was only a 1.3 pound pressure difference in the tires filled with air and Nitrogen. The obvious conclusion was that Nitrogen for your tires is a waste of money.

Costco is often cited as a reason to buy Nitrogen for your tires. When you buy a set of tires from Costco, they fill the tires with Nitrogen free. When you bring your car back to Costco’s auto service center, they will top off your tires with Nitrogen for you free. I can understand Costco’s motive in this because I also operate an automotive service center and I also sell tires. All auto service center operators want to give their customers a good reason for bringing their cars back to them regularly for service. Why? Because we want to sell you more services. Need I say more?

Here's the original posting:

Don’t Pay for Nitrogen in Your Tires

It’s bad enough that gas stations now make you pay to inflate your own tires with air. But at least you are getting what you paid for…air which does what it’s supposed to do and that is to keep your tires inflated.

Many car dealers are now charging customers to fill their tires with “pure” nitrogen. They tell you that nitrogen does not leak from your tires as quickly as air and this means that your tires will stay properly inflated longer before you have to add more nitrogen (and pay the dealer for this). What the dealers don’t tell you is that the air that is already in your tires is mostly nitrogen anyway. In fact, 78% of the air you breathe is nitrogen. Oxygen represents only 12% of the air. The rest of air includes carbon dioxide and other inert gases. I’m not sure what the purity of the nitrogen is that they pump into your tires for $199 (this is not a typo…one hundred and ninety-nine dollars for filling four tires full of mainly air). But, you can be assured that the purity of the nitrogen is not 100% and is probably closer to the 78% that regular air consists of.

Even knowing all of the above, I have to admit that I was curious about whether or not nitrogen could prolong tire live and improve fuel economy because I knew that NASCAR drivers used nitrogen filled tires and I heard that Volvo’s came from the factory with nitrogen in their tires. I have a BS in Physics from the University of Florida and a Master of Science from Purdue and these kinds of things interest me. So, to find out for myself, my dealership conducted an experiment. We have a fleet of rental cars and we filled two tires of each car with pure nitrogen and 2 tires with regular air. Over the course of many weeks, we measured the pounds of inflation in the nitrogen and air filled tires. There was no difference in the inflations of the nitrogen v. s. the air filled tires. If there is no difference in the inflation, there can be no benefit from nitrogen of better gas mileage or fuel economy.

You may have read my column last week, “Beware the Phony Monroney”. In that column I warned you about car dealers that add a window sticker designed to look exactly like the federally mandated Monroney sticker. This is where you should look for dealer installed accessories and additional dealer markups over MSRP. Often these accessories have a high price but a very low cost. In the case of nitrogen in four tires selling for $199, this is exactly the case. Since air is already 78% nitrogen, it costs virtually nothing to extract nitrogen from the air. To be generous, let’s say the dealer’s cost is $10 including labor. That is a 2000% markup when he charges $199.

Just when I thought I’d seen it all, I actually saw window stickers on a car today from another dealer who had actually modified the Monroney label to show nitrogen filled tires. To do this, the dealer actually had to remove the real Monroney label, make the modification showing the nitrogen tires, and re-paste the Monroney label to the window. Federal law requires that a Monroney label not be removed until the vehicle is delivered to the customer. It also requires that it not be modified. This new vehicle was one we had traded for from another dealer and still had the counterfeit Monroney and the modified real Monroney attached to the window. The modified Monroney looked so authentic, that one of my technicians and my service manager inquired of Toyota about the necessity of our carrying nitrogen tanks so that we could refill these tires with Nitrogen. If this could fool a Toyota dealer’s technicians and service manager, it might fool you too.

This particular dealer also had another charge added to the counterfeit Monroney sticker, a $4,995.00 “Market Value Adjustment”. Most prospective customers think that this is part of the manufacturer’s recommended retail price. They either end up paying too much money for the vehicle or think they are getting more for their trade-in or a bigger discount than they really are. It’s easy to allow someone an extra $5,000 on their trade-in when you have already marked the car up an extra $5,000 over sticker price.

12 comments:

  1. PAAAAAAALLLLLLMMMM TRRAAAAAANNNNN!!!!

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  2. You have some EGO my friend. You know it all. Big mouth old man. To think that what you say even really matters. There are people that know the truth about you. You are an egotistical asshole. There are some very good reasons to use Nitro in vehicles. There are no good reasons to charge consumers for it as a profit center, but it does help with the life of the tire, it does help with fuel milage and it does help with safety. I have done tons of research myself. I have decided not to charge customers for the service. This is due to one factor. PEOPLE HAVE BEEN SCREWING CUSTOMERS BY CHARGING HUGE PRICES FOR AIR AND HIDING THE FEE IN THE PRICE OF SERVICE OR SALES. Kinda like you do with your shop supply and dealer fee charge. However, our customers do not check their tire pressure that often and Nitro does hold longer, by up to 60% longer. More tire stays on the road so it is safer and because of that you use less fuel. Get off your soap box. You are a car dealer not a lawyer.

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  3. Dear "Son of Sam",

    At the risk of confusing you with the facts:

    I do not charge a dealer fee, unlike almost every other car dealer.

    In my service department I do not charge for "shop supplies" or anything like that, unlike almost every other car dealer.

    In a recent test, Consumer Reports filled hundreds of tires of all makes...half with Nitrogen & half with air. AFTER ONE YEAR, the difference in air pressure was 1.3 pounds. CNN and the Wallstreet Journal also have concluded that there is no value to Nitrogen in tires...PERIOD.

    Adding Nitrogen to tires gives your customers a false sense of security causing them NOT TO CHECK THEIR TIRE PRESSURE monthly as they should. You are doing them a disservice and endangering them because you won't believe the facts.

    Rather than call me foul names and an "old man" [Do you hate the elderly?], why not come out of the closet and debate this issue face to face. Why to you find it necessary to be anonymous? Is your pseudonym "Son of Sam" meant to be a threat? You aren't afraid of this "old man" are you?

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  4. Earl,

    I agree you do not charge a dealer fee. It is diquised in the price of your vehicle price. I agree you do not charge shop supplies. You over charge for service work being the most expensive in South Florida with you minor service pricing. But you gloat that you have no hidden charges. The test that was performed was not done in any sub tropical climate, which is were we live by the way, and tires in this region lose air on an average of every 2 weeks. The hand book tells you to check the tires every two weeks and not to go past a month. The Nitro loses an average of 1.3 PSI in over a month. This is a huge benefit to the customer. The false sense of security comes from the service provider not educating the customer. Continue to jump on the soap box and mis lead customers. I will not do it. Remember, it is very often people believe what they here, true or not. Hilter, Manson, Jim Jones, Osama Bin Laden, Suddam Hussein, and many many others. Be careful the message you send as you know for a fact people will believe what you say. I believe you already know this and what to profit from this majority of your customers. You do not do your customers justice if you over charge for parts and service to cover a shop supply charge then tell them you don't charge shop supplies. Half of one, six of the other as my mother used to say. Again this goes back to being an old con man that I know you are. By the way I don't hate the elderly, I am looking out for them from predators like yourself.

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  5. How dare you condemn Costco for using Nitro to get customers back so they can sell them more stuff. This is a total lack of respect. What to you call it when you offer customers Tires for Life, Batteries for Life, Parts for Life, or whatever else you do. All these reasons are to bring the customer back in so your service department can charge them for more stuff. Tell it like it is you arrogant asshole. I expect you will comment back that it is for retention reasons or because you want to offer your customers more. Bullshit, it is to keep your customers coming back so you can continue to sell stuff to them. This is the whole principle of free enterprise. This is the basis of owning a business. You are something else. You go around pushing yourself off as the only good human being left in South Florida, when in fact you are the biggest theif of them all. You make me sick and I hope one day we can meet in person. I would LOVE to discuss this face to face.

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  6. Dear Costco Employee,

    First let me say that you work for a great company. My company and I have been Costco members for over 20 years. My company is approved by Costco's auto buying program. I am a Costco stockholder and my wife and I shop at the Palm Beach Gardens branch almost every week. Ask anybody in that store if they know "Earl and Nancy"...we feel like all the employees there are our friends.

    Because Costco is a great company does not mean it can't make a mistake and it did when it began including Nitrogen in all the tires they sell. I predict that Costco will stop doing this in the near future because great companies admit their mistakes, apologize to their customers, and then move on.

    CNN, the Wall Street Journal, and Consumer Reports have all reported in just the past week that Nitrogen is worthless for improving gas mileage, safety, tire wear, or tire longetivty. Consumer Reports tested hundreds of tires of all makes, filling half with pure Nitrogen and half with air. AFTER ONE YEAR, there was virtually no difference (1.3 pounds) of tire pressure.

    How can this not convince you and Costco that Nitrogen is no better than air for filling your tires?

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  7. Earl,

    Palm Tran has gone ahead with their program to put Nitrogen in all of their vehicle tires. They have gotten information from the US Government that shows cost savings over the year of government vehicles in use. I happen to know the head of service for Palm Tran. He is doing his own 1 year research and will share those findings with me. He has extensive knowledge with Nitrogen filled tires. If he is correct, I will come out publicly against you and prove that your motives about Nitrogen is strictly to put down dealers around you and not to benefit your customers. By the way the research down by CNN, the Wallstreet Journal and Consumer Reports were tires that were left outside in the sun for a year and not used daily on any vehicle. The test did not show real world data. It showed partial information, which is exactly what you do with your customers. You show the customer one side of the picture. Also, you little comment in Automotive News Monday made me laugh. You sure do think highly of yourself to make comments that they should do a second article based on your letter. Your head just keeps getting bigger. Your peers think you are a joke, SET thinks your a joke, your own associates, some of who I know very well, think you are a joke. Your process and procedure relies soley on you. If you died tomorrow, one could only wish, your dealership would be ranked one of the worst in the region because of your people. I will be talking to you soon.

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  8. whoever made the last comment sure sounds like a bitter and petty little man. So much pain.

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  9. How is Palm Tran making out with the Nitrogen? Any Update?

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  10. Thanks for compliment and thanks for the reminder.

    The Palm Beach County Commission and their director of Palm Tran are overdue for us taxpayers asking when will they have conclusive proof on the benefits of Nitrogen in tires.

    They completed one test but decided to do another because they didn't like the results which showed Nitrogen did not improve tire wear or fuel economy.

    It's been over a year and I have a hunch they are "laying low" because they don't like the results of the 2nd test either.

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  11. This comment has been removed by the author.

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  12. Thank you Earl for your useful article
    Very good post.

    Car Leasing

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