Thursday, November 15, 2007

Avoiding the Minefield of Fine Print in Car Ads

I wrote a column for this paper on September 7 entitled “Quick reference Guide to Fine Print in Car Ads”. Since then dealers have come up with so many more gimmicks and trickery that I felt compelled to write another column adding the latest bait and switch fine print disclaimers. All of these are taken directly from the PB Post auto classified section. You will probably need a magnifying glass to read some of these. I do.

Several of the fine print disclaimers you will read below are illegal under Florida law but the dealers constantly run them with impunity. For example, Florida law requires that the advertised price of the car must include all charges except for sales tax and license tag. The dealer fee must be included in the advertised price and some dealers either are ignorant of this law or just ignore.

I don’t understand why the Florida Attorney General’s office ignores this. In fact, I don’t understand why the local newspapers that run these ads don’t take a stand. I guess Bill McCollum and Tom Giuffrida don’t read my column.

Smart buyers read the fine print What do you suppose motivates this dealer to hide this sentence in the fine print of his very deceptive newspaper ads? Is this just a very bad joke on his customers? Does he think that the customer will forgive him for being baited and switched because he has also included this sarcastic phrase?

Some vehicles listed may be pre-owned This dealer will have used cars mixed in among the new cars that he has advertised. Unless you can read the fine print, you don’t find out until you come into the dealership.

“$1,000 cash offer” paid out in any form or combination of forms I’m not exactly sure what the dealer intends to communicate here, but interpreting this literally means he can pay you with a credit toward the purchase of another car, in extended payments over time, or maybe even in shiny beads and trinkets like we used when we bought Manhattan from the Indians.

Must take delivery today To get the advertised price you have to drive it home the same day. If you take delivery you also have to sign all of the papers including finance arrangements. This precludes you from doing any do diligence in getting competitive bids on the car you’re buying, the interest rate and trade in allowance.

Price includes $2,000 cash or trade equity This simply means that the price that you can read in the full sized print has been reduced by $2,000. If you find and can read the fine print, it tells you have to pay an extra $2,000 above the advertised price.

Hazardous Waste Disposal Fee This is just one of many phony fees you can be charged in dealers’ service departments. Other names dealers dreamed up for this extra, surprise profit to the dealer are shop supplies, miscellaneous supplies, and sundry supplies. This fee added by taking a percent of your total service bill up to 10%. If you take issue with this charge, there is a good chance the dealer will waive it.

700 miles per month This is a limitation on the number of miles you can accumulate on your lease car without paying a penalty at the end of your lease. The amount of miles allowed varies but they usually are much less than an average driver drives. If you average 15,000 miles per year, your penalty on a 36 month lease with a 700 mile per month limit and a $.25 per mile penalty would be $4,950!

Offers may be cancelled at any time without notice This is pretty self explanatory if you can read the fine print. If the dealer decides that he doesn’t want to honor the price offered in the his ad, he can just say “I changed my mind”.

Very short lease term & high down payment Nothing sells cars like low monthly payments. A car dealer can make a monthly lease payment as low as he wants by reducing the number of months of the lease and increasing the down payment. I’m looking at an ad in the PB Post right now advertising an SUV for $19,999 or just $199 per month. In the fine print it says 27 month lease and $3,000 down plus a $799 dealer fee.

Plus dealer installed options The price you see advertised in the paper is not the full price. This loophole allows the dealer to tack on thousands of dollars in overpriced accessories to the price that was advertised.

With approved credit The lease payment or purchase payment you see advertised is based on someone with very, very good credit. Sometimes the ad will specify a minimum Beacon score of 750 or even 760. An almost negligible percent of people have a credit score that high. This payment gets you in the door and then they tell you your credit isn’t good enough to qualify for that payment.

Advertised offer good on select in-stock vehicles only Dealers often advertise just one car at a price below their cost. They don’t pay the salesman a commission if he sells that vehicle. The chances of that car being available for you to buy are “slim and none”. Even if the car was still there, the salesman would do everything in his power to sell you a different car that he could earn a commission on.

Owner Loyalty Rebate Manufacturers offer special cash rebates to current owners of their car. These rebates are not available to you if you don’t currently own that particular make of car. For example, if you own a Honda, and want to buy a Toyota, you don’t qualify for a Toyota loyalty rebate. That price you see advertised won’t be available.

Military Rebate If you are on active duty in the US Armed Forces you qualify for this rebate. Of course the price you read in the paper already discounts the price by this amount and the dealer increases it if you are not a “soldier”.

College Graduate Rebate If you have graduated from an accredited 4 year college within the last six months, you qualify for this rebate. And the price in the paper is discounted by this amount.

Dealer Loyalty Rebate To qualify for this rebate that is already taken out of the advertised price you must have bought a car from this particularly dealer within the last year.

Price …plus, tax, tag, and fees The red flag word here is “fees”. The fees these dealers refer to is a “dealer fee” which is synonymous for dealer profit. Most people think it’s a federal or state tax of some kind. It’s nothing more than more money for the dealer that is not disclosed in the price of the car.

Offers expire date of publication or may be cancelled at any time without notice This simply means that the prices, payments, etc. you have read have no validity whatsoever. The prices are not good tomorrow, but they aren’t even any good today because the dealer can cancel the offer without notice.

Not responsible for typographical errors This is just one more way for a dealer to explain why they can’t sell you the car for the advertised price…We don’t have to honor that price because it was a “typographical error”.

Vehicle Art for illustrations only. This means that that car you are looking at with the really great looking wheels might not have those wheels on the one you buy. Or, maybe it doesn’t even have that sunroof you see in the picture.

Minimum trade based on dealer list price The dealer list price is not the same thing as the manufacturer’s suggest price. Dealers add markups to the Monroney label also known as MSRP or manufacturer’s suggested retail price. They label this markup (often on a sticker designed to imitate the official federal Monroney label). Dealer markups of $3,000 and much more are common on such “counterfeit Monroney” labels. In this case, the dealer has marked up the MSRP far enough so that he can offer a minimum $10,000 trade-in allowance.

Offer not available on advertised cars Folks, it’s hard to believe that even a car dealer would have the unmitigated gall to print an offer in his newspaper advertisement with an asterisk that referred to fine print saying it doesn’t apply to any cars in this advertisement.



My advice to you is to ignore all car dealers’ newspaper advertising. Most car ads are designed to “get you in the door” so that they can sell you some other car than the one advertised so that they can make more money. If you must respond to a dealer’s newspaper ad, please be sure you break out your magnifying glass and carefully read the fine print.

2 comments:

  1. Shouldn't all that type of advertising be illegal? Why are they allowed to get away with it????

    ReplyDelete
  2. Thanks for your comment, Dottie.

    A lot of what you see in fine print in car dealer ads is illegal but unfortunately the law is not enforced. The most common law broken is advertising a price which EXCLUDES THE DEALER FEE. Other ads are not illegal but should be.

    My suggestion to you and others who wonder why this is allowed to continue is to contact your state legislators and the newspapers who run these ads and voice your objections.

    If your district congressman and senator hear from you, there is a good chance that some action will be taken. "The squeaky wheel gets the oil".

    ReplyDelete

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