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Monday, March 29, 2010

THE NEW CAR “INVOICE” IS NOT THE INVOICE

I was very pleased to see a news article in this week’s Automotive News entitled “Dealer is a lone voice on invoice prices in ads”. At first, I thought “Oh Boy! We have another dealer - Jack Fitzgerald, a Maryland car dealer - who is willing to stand up and be counted when it comes to unfair and deceptive advertising by car dealers.

But, after I read the Automotive News article, I realized that the only thing Jack Fitzgerald was concerned about was losing his right to advertise cars at invoice. Fitzgerald is sponsoring a bill in the Maryland legislature to prevent manufacturers from withholding benefits such as advertising co-op funds if a dealer advertises invoice prices.

For those of you who read my blog, my column in the Hometown News, or my Saturday morning radio show on Seaview you know that I consider advertising a car at or below dealer invoice unfair and deceptive advertising. This is because many consumers think of the invoice of a product as being what the store pays the manufacturer or distributor. They think its true cost, but the invoice of a new car actually includes a relative large profit to the dealer with thousands of dollars of holdbacks, advertising costs, floor plan costs, and rebates included.

Some manufacturers do discourage dealers from advertising at or below invoice prices by financially penalizing them. Most manufacturers do not. Honda does and Toyota has restrictions on language used that refers to the cost of the vehicle. Honda’s motivation is clearly to support the retail selling price of Hondas. I quote from the article, Chris Martin a spokesman for American Honda Motor Co., “Encouraging shoppers to focus on the cheapest price could undermine a vehicle’s resale value and hurt the brand image.” I believe that the manufacturer has no business meddling with what their dealers can sell their cars for. In fact, I question the legality of this. However, I do believe that the manufacturers should “meddle” with unfair and deceptive advertising by its dealers and this is what Jack Fitzgerald and lots of dealers who like to advertise at or below invoice are guilty of.

In this Automotive News article, Jack says “The Federal Trade Commission tells consumers to determine the factory invoice price when they are shopping for a car to protect themselves against overpaying.” He says “That’s why I put the factory invoice price on my Web site.” I would love to see that document from the FTC that tells potential car buyers that a dealer invoice is an accurate representation of the true cost of the vehicle to the dealer. I don’t believe that such a document exists but, if it does it should be immediately rescinded. The real reason that Jack likes to show his customers the invoice on his cars is because he knows that the customer thinks it is his true cost. His customers don’t know that the typical car invoice includes thousands of dollars in profit to the dealer.

I’m writing this column on Monday, March 29, and I’m looking at an ad in today’s Palm Beach Post by Arrigo-Dodge-Chrysler-Jeep. The headline is “BELOW INVOICE PRICING”. Unfortunately there are still lots of people who will read this ad and believe that they are getting the “buy of lifetime”. Sadly they may be almost right. It will be the “sale of a lifetime” for the salesman and the dealer if you pay their asking “below invoice” price.

Monday, March 22, 2010

DEALER FEE FRAUD HOTLINE

(866) 9- NO- SCAM; (866) 966-7226

About three years ago I testified before the Florida state Senate Commerce Commission about making the dealer fee illegal. As you probably know I was not successful but have carried on my efforts through TV, radio and newspaper ads, this column, my Saturday morning show on Seaview 95.9 FM, and numerous public speaking engagements. My efforts have been somewhat successful in that my two closest Toyota competitors dropped their dealer fee last June because they were losing their customer to me.

The Florida Attorney General, Bill McCollum, had a representative at the Senate Commerce Committee testifying at the same time I did. The committee asked the assistant AG why they did not prosecute those car dealers who violated the Florida Unfair and Deceptive Trade Practices Act with respect to dealer fees. He responded that they were understaffed and also that they did not receive a lot of complaints about this. Now, I personally believe that the AG’s office receives a lot more complaints on the dealer fee than they know about. Why do I say this? The assistant AG admitted that they did not file consumer complaints against car dealers by “type”. In other words they have a virtually useless database which makes it impossible to figure out who is complaining about what.

This recollection is what inspired this column. What if I could spread the word to call the AG’s own Fraud Hotline such that they received so many complaints on the dealer fee that they can’t ignore it even with a lousy filing system?

OK, now here’s the law taken right from the Florida Unfair and Deceptive Trade Practice Act: “The advertised price must include all fees or charges that the customer must pay, including freight or destination charges, dealer preparation charge, and charges for undercoating or rust proofing. State and local fees, and title fees, unless otherwise required by local law or standard, need not be disclosed.” Simply stated, if you responded to an advertisement by a car dealer, bought the advertised car, and he charged you more than the advertised price (plus tax and tag only), he broke the law and owes you the extra charges. The dealer is also subject to very large fines from the AG and possible suspension or revocation of his license to sell cars by the Florida Department of Motor Vehicles…not to mention class action suits to recoup overcharges to thousands of his customers. If you would like to read the official Senate summary of the Unfair and Deceptive Trade Practices Act pertaining to car dealers you can click on this link, www.DealerFeeFraud.com.

In last Saturday’s Palm Beach Post I saw several car dealers’ advertisements on cars with fine print saying that the prices were “plus dealer fee”. Some dealers are also advertising that the prices are plus dealer fee and freight or destination fee. Delay Mazda, Napleton Nissan (Riviera Beach) and Ft. Pierce Nissan are three dealerships that are charging twice for freight. Freight is already included by the manufacturer in the invoice you pay. The amount added to advertised price is about $1,500! There are some dealers who don’t even mention the dealer fee in the fine print but just add it onto the price when you come in.

If you bought an advertised car in Florida you probably paid more than the ad price plus tax and tag. If you did, you have a legitimate beef with the dealer. The dealer should refund you the overcharge plus interest. If not, you should report him to Bill McCollum, our Attorney General, by calling 866 966-7226.

Monday, March 08, 2010

TOYOTA RECALLS A HOAX?

Wouldn’t it be something if it came to pass that Toyotas don’t have a safety problem at all? I don’t know that to be a fact, but I also don’t know it not to be. Logic 101 teaches us that it’s impossible to prove a negative.

Try to follow me on this. To clarify my first sentence, what I should say is maybe Toyotas don’t have any greater safety problem than any other car (and probably fewer than most). There are no perfectly safe cars, just as there are no perfectly safe ladders or baby cribs. There are only safer and less safe. One reason I say that is because there has not been one proven incident of an injury from a sudden acceleration because of a defective Toyota. In fact, there has not been one proven incidence of a sudden acceleration even without an injury. The last I heard, in America, we are innocent until proven guilty. Why doesn’t this apply to Toyota? There have been plenty of lawsuits filed, but not a single lawsuit won on this issue.

Now that the media feeding frenzy has begun to subside because there are more interesting issues like Tiger Woods’ apology, a whale eating her trainer, and the Oscar Awards, some of the truth is beginning to surface on the back pages. Did you read that in the ABC TV exposé (the driving engine behind much of the media assault) that they faked the tachometer which was shown to be revving to scarily high rpm’s? When ABC got caught on this they said that the real tachometer was “shaking” too much so they just filmed one that was in a stopped car while somebody stood on the accelerator.

Or have you read the reports by testing labs who examined Dr. Gilbert’s Congressional testimony about how he had caused a Toyota to suddenly accelerate by simulating certain conditions with the electronic throttle control? If you would like to see one of these, click on my website, http://www.earlstewarttoyota.com/. Then click on “Toyota Recall Info” in the top left of your screen. Once you view this video, you will fully understand why this allegation that defective electronic throttle controls are defective is a hoax.

There is no real evidence that Toyota has built unsafe cars, only anecdotal allegations by people with a variety of reasons for what they say. People accidentally step on the accelerator and the brake at the same time. They even accidentally step on the accelerator instead of the brake sometimes. How often do we read or see on the news how somebody drove their Lincoln, Cadillac, or Buick through the plate glass window at the 7-Eleven or Hair Salon? Did you ever hear one of the drivers admit that they were stepping on the brake and the accelerator at the same time?

The horrible case of the Texas Highway Patrol trooper and his family who were killed in a Lexus is what brought the first attention to Toyota on sudden acceleration. The trooper further dramatized this tragedy by describing the entire event on his cell phone to a 911 operator. How can Toyota be blamed for this when NHTSA’s findings was that the Lexus dealer had used an oversized, recalled floor mat not made for that car and placed it in the vehicle “upside down”?

You want another motive for anecdotal allegations? How about greed and money? Toyota is the largest and wealthiest auto manufacturer on the planet…very deep pockets. Every tort lawyer in the USA is salivating over this opportunity. You can’t look at TV for 10 minutes these days without seeing some unscrupulous attorney soliciting someone who slipped and fell, was in an auto accident, owes the IRS money, or wants to blame somebody else because they have cancer. Auto liability insurance is much higher in some areas like South Florida, because of the great scam of people slamming on their brakes in front of the car behind them causing a rear end collision…a slam dunk for a PI lawyer.

It wasn’t until the late eighties that science was able to match DNA from crime scenes to the perpetrators. It makes me shudder to think how many innocent people were executed and imprisoned before. Even now, there are men and women in prison who hopefully will be released when the DNA evidence is reviewed. Most of these wrongfully executed and imprisoned victims were convicted on the basis of “eye witness” testimony. Judges and prosecutors now know that eye witness testimony is one of the least reliable forms of evidence. I’m absolutely sure that when Mrs. Smith testified before Congress that her Toyota accelerator stuck, caused her car to suddenly accelerate, and that only when God intervened did it slow down that she firmly believed she was telling the truth.

There is also the “fifteen minutes of fame” motivation. Right now, if you want to be on TV, all you have to do is call your local TV station and tell them that you almost killed yourself and dozens of school children when your Toyota suddenly accelerated while driving though a school zone. Lots of people actually confess to horrible crimes to get attention. You probably know that police won’t even arrest a person and prosecutors won’t prosecute a person who confesses to a crime without corroborating hard evidence.

I’ve been a Toyota dealer at the same location for 35 years. I’ve sold over 10,000 of the recalled cars and have not had one single incident of a sudden acceleration, accident, or injury from a recalled Toyota. I know hundreds of Toyota dealers from all over the country and we communicate all of the time, especially these days. I don’t know of another Toyota dealer who has had a case of sudden acceleration. What’s wrong with this picture?