Wednesday, March 05, 2008

Senate Commission on Dealer Fee

My appearance before the Senate Commerce Committee went quite well yesterday.

The Senators allowed me all the time I needed to make my presentation. I gave them copies of newspaper ads illustrating my objections to the dealer fee and copies of my presentation.

Many of the Senators on the committee asked me questions which were very supportive and positive.

Several people from the Florida Automobile Dealers Association testified, including dealers Chris Craft and Herb Yardley and Ted Smith the President of FADA. The committee was negative toward most of their testimony and this was reflected by their questions. Several Senators challenged the speakers on their misstatements of fact and obvious contradictions.

The Senate committee is preparing a bill which will be sent to the House for endorsement and then to Governor Crist to be signed into law. I don’t expect anything drastic like making dealer fees illegal but I do feel that there will be a lot more disclosure required and I do feel there will be a lot more enforcement of the existing and new law.

Please check out the article that appeared in today's Sun-Sentinel about yesterday's hearing:

Senate panel takes up crusade against auto dealership fees
By Joshua Hafenbrack
Tallahassee Bureau
March 5, 2008
TALLAHASSEE
In South Florida car dealer Earl Stewart's ubiquitous TV ad testimonials, he likes to point out he doesn't charge "dealer fees." He even started a radio show and a blog to rail against the fees charged by many of his competitors in Palm Beach and Broward counties.They're the often-hidden costs — running $500 or more in many cases — tacked onto a car's price once customers are hauled into a back office to fill out financing papers.Now Stewart's fight against dealer fees has moved to the state Legislature, with a Senate committee agreeing Tuesday to craft consumer protections that would require greater transparency about the fees that usually aren't included in price quotes or Internet advertising.Testifying before the Senate Commerce Committee, Stewart, who owns a Toyota dealership in North Palm Beach, said dealer fees are meant to obscure a car's real price from customers and pad dealers' profit margins."It prohibits the legitimate dealer from competing on a level playing field," said Stewart, a
Fort Lauderdale native whose family has been in the car business in South Florida since 1937.After hearing testimony from South Florida car dealers on both sides of the issues, the Senate panel moved to draft legislation to require dealers to disclose dealer fees in their cars' sticker prices.This approach doesn't go as far as 13 other states that have capped dealer fees, with limits ranging from $45 to $250, according to Senate investigators.Herbert Yardley, whose owns Massey Yardley Chrysler Jeep in Plantation, said the $599 dealer fee he charges is just one part of arriving at a car's overall price, a process he described as an "art, not a science." "I don't know that the state does belong in pricing," Yardley told senators. "Please let pricing be an individual issue."Josh Hafenbrack can be reached at jhafenbrack@sun-sentinel.com or 850-224-6214.

11 comments:

  1. DEALER FEES / NO SALE I LOOK ELSEWHERE

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  2. NO FEES BUY ELSEWHERE

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  3. Great English,

    Earl, I guess you are not the all powerful god you thought you were. I can't believe they didn't listen to you. After all you are Earl Stewart. Maybe they remember you as the crooked con man of years past. Maybe they saw through your soap box preaching and seen that you are really just trying to have the spot light shine on you. Maybe they saw that you use this blog to put down other hard working good dealers. Maybe they see that you are just an old dog trying to get away with a new trick. Earl, please don't forget that some of us remember who you really are and this holier than thou approach you are taking is really sick. I explain dealer fees to my customers and when asked about your approach, I simple explain that you take away the customer negotiating powers. I can sell below cost, you can not. You pass yourself off as the best dealer to do business with but you really are not. Granted there are many dealers not wanting to do the right thing, but there are far more that are. Just because you believe in something so passionatly does not mean you are right.

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  4. Dear Car Dealer,

    Thanks for having the courage to identify yourself as a car dealer who charges a dealer fee. Most car dealers haven't the intestinal fortitude and merely write negative comments disguised as somebody they are not.

    Also, thanks for your salutational compliment on my excellent grammar.

    Rather than address your personal attack against me...lies and insults, I'm simply going to quote your very own words from your posting:

    "I EXPLAIN DEALER FEES TO MY CUSTOMERS AND WHEN ASKED ABOUT YOUR APPROACH, I SIMPLE (sic) EXPLAIN THAT YOU TAKE AWAY THE CUSTOMER NEGOTIATING POWERS. I CAN SELL BELOW COST, YOU CAN NOT (sic)"

    I won't comment on that statement because it couldn't be more revealing. In fact, I will take the liberty of reading this quote on my weekly radio talk show [Seaview AM 960 Saturdays 9-10 am], my weekly Hometown News column, and my next appearance before the Senate Commerce Committee.

    Thanks very much for your assistance in my fight against the "license to steal", the Florida Car Dealer Fee.

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  5. Earl,

    You don't want to comment because I am right. Again, because I charge a dealer fee does not make me wrong and you right. You don't charge the fee, OK we get it. You absorb the cost in the price of the vehicle. At the end of the day we sell the car, with the fee, for the same as you do. The only difference is I don't hide the fee and you do. You are trying so hard to abolish this fee. This is only going to change the landscape of the car buying experience. In a sense this will fix the price for the car dealers and you will end up making more money. This is a political ploy by you to level the playing field for you so you can profit. Every dealer that has responded to you has said the same thing. This is just not right. You can call the fee what ever you want, but at the end of the day EVERY dealer shows the dealer fee and on EVERY deal if the customer does not like the end price, final price, they get up and leave. So please get off of your high horse.

    By the way. If you are going to quote me, please quote everything. Don't leave anything out and don't put your spin on it to make yourself look good.

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  6. Dear Mr. Dealer Fee,

    Thanks for more great material for my Blog, newspaper column, Seaview AM 960 Saturday talk show [9-10 am], and my next testimony before the State Senate Commerce Committee.

    I'll also be sharing your comments with the PB Post, Sun Sentinel, the TV stations, and my next five speaking engagements at the PB County Public Libraries. I'm also speaking before serveral Kiwanis and Rotary Clubs in the next few weeks.

    PLEASE send me some more material. Your words are far more effective than mine in decrying the Dealer Fee, as "a license to steal".

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  7. Thank you for letting me know where you will be. Maybe I just might swing by and pay you a little visit.

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  8. I gotta say it, Earl, you really seem to have these other dealers running scared! What I really love is the fact that all these other dealership owners and employees are so threatened by your crusade to eliminate this right to steal. They make things up like "you take away the customer negotiating powers" (how in the world does that work??!!?!!) and "This is only going to change the landscape of the car buying experience." It seems as though these dealers are more frightened for themselves, not the customer. I wonder what happened in all those states where the dealer fee is capped or eliminated? I don't see their residents flocking to Florida just to buy a car so they can "negotiate" a dealer fee, do you?

    Any how, keep up the good work Earl! If I were a Toyota buyer, I know where I would be doing business, that's for sure!

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  9. Dear "Dealer's kid",

    Thanks very much for your support. By the way, I'm a "dealer's kid" too and I even know what your meant by aka "Phd"...Poppa has dealership. :)

    I don't have to respond to some of the absurd excuses for dealer fees that dealers post on this blog like "you take away the customer negotiating powers". That's because the excuses are so transparent that they aruge against the dealer fee better than would my response.

    Is your Dad's dealership in another state that does not allow dealer fees?

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  10. Actually, he is (we are) in another state with no cap...Tennessee. We used to be in Florida, south of you. Ours is a "modest" fee, $249. Our competitors are anywhere from $149-599.

    I hope you will find success in this fight, even if your intentions are not purely altruistic. I think that this issue goes to the very heart of the our biggest problem in this business: the way we "talk" to our customers. Why do we continue to insult them with our advertising, marketing, and sales processes? I believe they are asking for better than that, and they will reward those of us who answer the call.

    Keep up the good work! I love your blog (if only for the laughter inducing, ridiculous comments from your old-school, coward competitors!!!), I think a good future post would be a compilation of the "top ten coward comments" and your responses to them. Just a thought. Now that I have found this blog, I will attempt to become a regular contributor...because I believe in what you are doing! Thanks again Earl!

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  11. Dear Tim,

    Your understanding of my position against the dealer fee and the frightened negativism by much of the Florida car dealer community is refreshing.

    It's especially so because you are a 2nd generation car dealer. My three sons are in business with me and will take over when I retire. My oldest son, Stu, was quoted in the Toyota-Scion Dealer magazine as saying that because of the way our dealership treats our customers he can be proud to tell his children (my grand children) what he does for a living.

    I didn't always feel that way as I grew up in this business. I just accepted the fact that all car dealers did business this way and we had to follow suit to be competitive.

    There have been big changes in the average consumer over the past 40 years. In 2008, car buyers (and all consumers) are better educated, more demanding, and have access to far more informaton (the Internet in particular). Those car dealers who understand this and adapt will thrive and those who don't will perish.

    Most of the manufacturers got this message several years ago, but are virtually powerless to bring about the change at the retail level. They have instituted lots of CSI (customer satisfaction index) surveys, but most dealers simply cheat on the surveys or manage and coerce the "numbers" rather than try harder to satisfy the customers.

    Customer satisfaction has become a "numbers game" and not an honest attempt to treat our customers better. With the manufacturers and most dealers, profits and number of car sales trump honest customer satisfaction.

    Part of the problem is the problem that all large organizations have which is "the guy at the top" not really knowing what's happening "in the trenches". A lot of good, smart, and well intentioned car dealers and manufacturer executives live in their ivory towers.

    Toyota is one of the best run companies in the World. They teach their executives the technique of "genchi genbutsu" which literally translated into English means "go to the place and see". What this means is that Toyota executives from the Chairman of the Board all the way down, don't rely entirely on computer print outs, reports, or even verbal information from their subordinates. They actually "visit the trenches" and see for themselves what's truly happening. An example of this was the Chairman of the Board of Toyota visiting the assmbley line of one of his factories, walking over to a tool that machined parts, rolling up his sleeve and reaching down into an oil reservoir to find metal filings that were "not supposed to be there". This cured a quality problem Toyota was having. But just imagine how, much more importantly, it sent a message to every Toyota employee.

    How many owners of car dealerships do you know who actually visit their service drives and showrooms and talk with their customers? When was the last time you remember a top executive of the manufacturer spending time in your dealership (not to have lunch with you and your Dad)but talking one-on-one with your customers?

    Tim, because of guys like you and my sons, I'm confident that the retail car business will successfully catch up with the expectations of our customers and join the 21st century along with other retail businesses.

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