Monday, May 21, 2018

Eight Steps to Selecting and Buying the Right New Car for You

1.  Consumer Reports 

Subscribe to Consumer Reports, go to the library and read past issues, or check out Consumer Reports online. There are other objective sources of information on cars, but this is the best. They accept no advertising from anybody and their sole goal is rigorously and objectively testing merchandise that consumers buy. You can very quickly find the best make car for the model and style you want to buy. Consumer Reports rates cars by performance, cost of operation, safety, and frequency of repair.


2. Test Drive the Car You Have Chosen 

This step requires that you visit a car dealership. Remember that this doesn’t have to be the dealership you buy from. You obviously must see, touch, feel, and drive the car that you think you want to buy. A new car is a very personal thing and just because Consumer Reports loved it doesn’t mean that you will. Be sure that you test drive the car at all speeds in all road types that you normally drive. Drive it in the city but also on the expressway.


3. Carefully Choose the Accessories You Want 

There are some accessories that enhance the value of your car and some that don’t or may even lower it. You should accessorize a car comparably to its class. If you are buying a lower priced economy car, you should not load it up with leather seats and an expensive sound system. If you do, you won’t recoup much of what you spent on these accessories in its resale value. On the other hand, if you are buying a luxury car, don’t skimp on items people look for in luxury cars like a navigation system or a moon roof.


4. Carefully Choose your Car’s Color 

This is more important in determining a car’s resale value than accessories. If you want to maximize the trade-in value of this car, choose a popular color. White, silver, black, and beige are the 4 most popular colors. Sports cars and convertibles are exceptions and red is often the most popular color. The difference in trade-in value between the right color and the wrong color can be several thousands of dollars.


5. Arrange Your Financing 

Now that you know exactly what kind of a car you are going to buy, you can check with local banks and credit unions to find the best interest rate. Don’t commit until you have chosen the dealer you will buy from. Manufacturers sometimes offer very low special rates and dealers can sometimes offer a lower rate than your bank or credit union.


6. Shop Your Trade-in 

If you are trading in a car, take it to 3 dealerships for the same make and ask them how much they will pay you for your car. A Chevy dealer will pay more for a used Chevy and a Toyota dealer will pay more for a used Toyota. If you live near a CarMax store, get a price from them too. They have a reputation of paying more money for trade-ins than most dealers. Don’t commit to the highest bid, but give the dealer you buy from a chance to beat that price.


7. Shop for the Best Price on the Internet 

Go to the manufacturer’s Web site. The addresses are all very intuitive. Ford is www.Ford.com, Honda iswww.Honda.com, and Toyota is is wwwToyota.com. You can type in your zip code and get the Web sites of all your local dealers. Depending on how far you are willing to drive to pick up your new car, request price quotes from as many dealers as you like, but be sure you get at least 3 quotes. When you have chosen the lowest price, verify that this price is “out-the-door” with only tax and tag, GOVERNMENT FEES ONLY, added. You can also check with third party sources like www.TrueCar.com. TrueCar is preferred because they prohibit their dealers from adding any dealer fees or dealer installed accessories to the TrueCar price.


8. Offer Your Favorite, or Nearest, Dealer the Right to Meet this Price 

If you have been dealing with one dealership for a long time and have had good experiences with their service department, you should give them a chance to meet your lowest Internet price. Of course, you can take your new car to them for service even if you don’t buy it from them.

You will notice that there were no steps listed above which suggested that you look in your local newspaper’s auto classified section, look at car dealers’ TV or online ads, or believe their direct mail “too good to be true” offers. When you fall for this, the dealer is in control. When you follow my eight steps, you are in total control.

Monday, May 14, 2018

Costco’s Auto Buying Program... Costco’s Achilles Heel?


Have you ever heard of the “Affinity Development Group” based in San Diego? Neither had I until I did a little investigating. The web page graphic you see displayed above is from their web page, not Costco. Affinity is a separate company that makes their money by marketing products and services for other companies with well-known brand names like Costco. I’ve been a member of Costco for many years and my dealership has been a participant in the Costco Auto Buying program for almost as many years. Until recently, I thought that Costco was the authority behind the Costco Auto Buying program and responsible for its implementation and oversight…not so…Its owned, operated, and managed by the Affinity Development Group.

This revelation came when I complained to Costco about the lack of transparency and apparent deliberate deception by Costco dealers that Costco was referring their members to for auto purchases. I spoke to an executive Vice President of Costco, Rick Dergaradebian, who seemed very concerned that Costco members were unknowingly paying higher prices for cars in the Costco Auto Buying Program than the Costco price sheets indicated they should be paying. He had Rick Borg, Executive VP, Program Operations at “Affinity Development Group” call me.

Rick Borg and I had a lengthy conversation, heated at times, about my allegations. I explained to him that I have mystery shopped dozens of Costco approved auto dealers and my allegations derive directly from my discoveries about how they treat Costco members. I’m not accusing Rick Borg, Affinity, and certainly not Costco of deliberately deceiving Costco members into paying higher prices than indicated on the Costco pricing sheet that each dealer must have. These prices are approved by the Costco Auto Buying program (Alliance) and I presume Costco’s intent is to offer its members lower prices than they could otherwise obtain. Rick Borg and I agreed that most car dealers do not deal honestly and transparently with their customers and they presumably are not dealing honestly and transparently with the Affinity Development Group aka Costco Auto Buying Program either. Rick Borg did say that Affinity does mystery shop its dealers and had found no evidence of deception, but when I asked him how many car dealers Affinity mystery shopped in South Florida, he couldn’t answer me. Rick Borg’s Affinity Development Group implements the Costco Auto Buying program in all 50 states and state laws are different in each state with respect to “Dealer Fees” which is the crux of the problem. Rick Borg admitted that I probably know more about the Florida dealer fee law than he did…he’s correct. He thought a dealer was required by Florida law to charge every customer a dealer fee if he charged just one…NOT TRUE. He didn’t know that most dealers in Florida charge multiple dealer fees all by different name and amounts and that’s legal. He seemed to know that Florida law required that all dealer fees be included in the advertised price of the vehicle, but he didn’t believe that the Costco price sheet shown to customer to induce them to buy was an advertisement. I do think it’s an advertisement.

Rick stated that Costco Auto Program dealers are required to state the amount of their dealer fee at the top of the first page of the official Costco price sheets. He admitted that they don’t include the dealer fee in the price. In my experience from mystery shopping, most Costco members never see the Costco price sheet, but take the salesman’s word for the Costco price. I’ve studied a copy of my dealership’s official Costco price sheet and I see no place to list a dealer fee (I do not charge a dealer fee). Rick Borg admitted that Schumacher Chevrolet (who I mystery shopped) did not all list all three of his dealer fees at the top of his Costco price sheet, only one. I haven’t seen that price sheet and, as I say, I see no provision or reference to dealer fees on my price sheet. I’m not sure how Schumacher Chevrolet do state their dealer fee; in fact, I’m skeptical that they do.

Rick Borg and I left it that we would work together to improve the transparency and honesty in the way Costco dealers sold cars to Costco members based on the promised price on the Costco price sheet. Here is what I propose:

1. The vehicle price stated on the official Costco Auto Buying Program Members Only Price sheet must be the final out-the-door price plus government fees only.


2. The Costco member must sign the Costco Auto Buyer Member Only Sheet ensuring that he did see the Costco member only price of the car he or she is buying.


3. All dealer fees by any name and any amount must be included in the Costco Auto Buying Program Members Only Price.


4. All dealer installed accessories must also be included in the Costco Auto Buying Program Members Only Price.


5. The Costco Auto Program Dealer must email or fax the final vehicle buyer’s order indicating the out-the-door price charged the Costco customer plus government fees only on every transaction directly to Costco and Affinity Development Group.


6. The Costco Auto Program Dealer will allow only Costco Authorized Dealer Contacts named in the official Costco Auto Buying Program Members Only Price Sheet to sell a vehicle to a Costco member. This name must be displayed on the vehicle buyer’s order furnished to Costco on every transaction.


7. Every Costco Auto Program Dealer will be mystery shopped at least once every 3 months.


8. Any Costco Auto Program Dealer that receives more than one failing shopping report in a 12-month period will be canceled.

I urge Costco’s Mark DerGarabedian to personally oversee the changes in the Costco Auto Buying Program. The success of the Costco Auto Buying Program is solely due to the trust Costco members have in the Costco name brand. Costco, to me and all its members, means honesty, transparency, consistently low prices, quality, 100% return policy, and total customer satisfaction. My wife, Nancy, and I shop at Costco frequently and order online. I normally comparison shop price when I deal with other stores, but I know that Costco marks up nothing over 15%. Just this last week I bought a supply toothpaste from Costco for $20 less than advertised on Amazon as “Amazon’s Choice”. If Costco has a product we want, we buy it from Costco…no place else.

Unfortunately, at this time, I can’t say the same thing about the Costco Auto Buying Program. Car buyers should shop and compare the Costco Auto Buying Program Members Only Price with at least 3 competing dealers before buying a car. Hopefully this situation will be corrected and this will no longer be necessary.

Earl Stewart

www.EarlStewartCode.com

cell 561 358-1474

Monday, May 07, 2018


OPEN LETTER TO AUTO MANUFACTURERS:

FROM: EARL STEWART

Dear Auto Manufacturer,

I’ve owned and operated a Toyota dealership in Lake Park (near North Palm Beach), Florida since 1975. If you wonder who I am and why I’m writing you, Google “Earl Stewart” and “dealer fee”, click on www.EarlOnCars.com, and buy a copy of Confessions of a Recovering Car Dealeron Amazon.

I have a solution to the image problem the car buying public has with most of your dealers. As you know, the way your dealers retail the vehicles you manufacture has caused them to be distrusted and disliked by most of their customers. The Gallup Company has polled U.S. vehicle buyers every year since 1977 in a survey entitled Honesty and Ethics in Professions. For all 41 of those years, car salespeople have ranked last, or near last, among all the professions. Click onhttp://news.gallup.com/poll/1654/honesty-ethics-professions.aspx.

I understand why you’ve been unable improve the honesty and ethics in the way your dealers retail your vehicles. Over many years car dealers, the National Auto Dealers Association (NADA) and their state organizations have lobbied “franchise protection” laws in all 50 states into effect that protect car dealers from their manufacturers. These state franchise laws make it difficult or impossible to terminate a franchise agreement or add another franchised dealer near an established dealer, despite “bad behavior” by the established dealer. The franchise laws require you to treat each of your dealers as an “independent businessmen” that can make their own decisions with respect to advertising and sales practices.

I’ve been a car dealer since 1968 and I know that many car dealers would rather sell cars in an honest, ethical, and transparent way; however, they hesitate for fear of losing sales to those among their competitors that employ dishonest advertising and deceptive sales practices. They see that bait and switch advertising and deceptive sales practices “work” (especially on the less educated and vulnerable members of our society). I, too, was one of those dealers I've been criticizing now for many years. However, I changed. I changed for many reasons but the best reason for me and for why other dealers might also change is this: The knowledge and sophistication of the American consumers, especially millennials, has soared since the beginning of the 21st century. Car buyers are much smarter, more demanding, and have access via the Internet, Google, and the social media to the knowledge explosion.

My proposition to you is to employ the Earl Stewart brand and way of retailing cars to the vehicles you manufacture. Check out my dealership, www.EarlStewartToyota.com. I outsell all your dealers between Orlando and Cocoanut Creek (near Ft. Lauderdale) on the East coast of Florida while maintaining extremely high customer satisfaction. I do this by posting and advertising my lowest price on every new and used car. I offer a 100% unconditional money back guarantee on every car sold. Every customer has my personal cell phone number (561 358-1474) and the cell phone numbers of all of my managers. Every department in my dealership has a red hotline phone hardwired to my cellphone which reaches me 7 days a week. I employ a rigid code of behavior for all my employees. You can read the Earl Stewart Code by clicking on www.EarlStewartCode.com. When I sell or service a car my customers return to me at a higher percentage than virtually every Toyota dealer in the Southeast and the USA... you know this as "customer retention."

Mr. Auto Manufacturer, verify my claims, call me, visit my dealership and if I speak the truth, let me do what I do for your brand of vehicle. Putting the Earl Stewart brand on your make will result in an immediate and significant increase in sales, customer satisfaction and your dealer’s image, especially in the South Florida market.

Sincerely,

Earl Stewart

561 358-1474

Monday, April 30, 2018

If You Can’t Find an Honest Service Department, Find an Honest Service Person

Servicing your car might be just as scary as it was buying it. However, buying a car is something you only do every few years. During the time between buying cars you will bring it in for service maybe a dozen times (and that doesn’t even count repairs).

Car dealers make more money servicing your car than they do selling you one. The more service they sell you, the more money they make. Today's automobiles are of far better quality than they used to be and are much less likely to need repairs. Increasingly, basic maintenance is all you really need to do for your car. Also, many manufacturers are providing free maintenance for the first two or three years. This new dynamic is a threat to the car dealers’ most profitable departments…service and parts. Many car dealers are compensating for this by selling you more service than you really need.

Did you know that virtually every employee in a service department gets a percentage of the total amount of service he sells? The guy that writes up your service order when you drive in is on commission. They are service “salesmen” but they don’t like to be called that. Their title is usually “service advisor” or “assistant service manager”. The mechanic that fixes your car is on commission. The service manager that supervises the mechanic and the service salesman is paid on commission. The dealer and service manager expect the service salesman to “up-sell” you. This is typically accomplished with a “free inspection” purportedly to find maintenance and repairs that you “didn’t know you needed” and was probably not mentioned in your owner’s manual. After the service salesman sells you as much service as he can, the mechanic’s role is to find anything that needs to be fixed on the car that the service salesman or you were unaware of. He then calls the service salesman and tells him about the additional repairs you “need” …the second “up-sell”. I recommend that you stick to what your car’s manufacturer recommends for maintenance in your owner’s manual. When your service salesman tells you what he recommends, be sure that the manufacturer recommends it too. There are some exceptions to this, based on certain local environmental conditions, but very few. Always question any service not recommended by your owner’s manual. When a repair is recommended that you were unaware of, get a second opinion from another service department, especially if it’s an expensive repair. Be especially leery of transmission and radiator flushes. They’re not recommended by auto manufacturers but very popular with car dealer service departments; their high-priced and unnecessary.

Now, don’t get me wrong; just because people are paid on commission doesn’t make them dishonest or uncaring. However, if there’s a “rotten apple in the barrel” he will take advantage of a commissioned pay plan to maximize his earnings. There are very few companies with zero “rotten apples”. A good company does its best to ferret out the rotten apples but it’s a constant battle. In fact, there are companies that have more rotten apples than not. When you have a department or company where everybody is on commission, it takes an awfully altruistic manager to fire a top-producerbecause his paycheck enhanced by that individual. The more his “rotten apple” sells the more money the supervisor earns. This applies also to the “supervisor’s supervisor, all the way up to the guy that owns the company. The higher up the ladder you go, the harder it is to identify these more passive, unseen rotten apples that “aid and abet” the front-line apples. The head guy usually has what many CEO’s insist on…DENIABILITY. You hear a lot about that in government scandals. The press always wants to know, “Who knew what and when did they know it?” Everybody remembers Watergate where the rotten apples extended from the bottom of the barrel all the way to the top. It took Bob Woodward and Carl Bernstein over several years to follow the tracks all the way to the top of the barrel.

Often, there are people in all companies that are honest and caring for their customers. The point of this article is that you’re better served to look for that good person than only a good company. There is no surefire way to do this, but I can suggest a few methods. Clearly, you’re more likely to find a good service salesman in a company that has a good reputation. You find good companies by personal experience, recommendations by friends, and ratings by various services like Google (most reliable), Yelp, Dealer Rater, and BBB. If you read the reviews, often the individuals are mentioned. If you’ve dealt with this company before, others in that company, like the salesman sold you the car, can refer you to a particularly good service salesman. All manufacturers measure the customer satisfaction index of every service salesman. Insist on seeing these scores and find out how the service salesman ranks among his peers, both in the company and the entire region. Finally, always make an appointment to see that service salesman you’ve chosen. If he’s on vacation or not available for other reasons, wait for your service until he can see you.

Finally, when you find yourself a “good apple” for a service advisor, don’t keep it a secret. Tell your friends and tell the service manager and the owner of the dealership. When you do this, you’re doing your friends, the service advisor, the service manager, and the owner a great favor. You’re also spreading the word that treating customers with honesty and compassion is good for business.

Monday, April 16, 2018

Never Go Car Shopping Alone

I receive phone calls, texts, and emails from car buyers who have usually “already bought a car”. The “horse is out of the barn” and they want me to give them advice on how to get it back. Most of these car buyers went car shopping and bought their car alone. Most of the complaints involve verbal promises by the sales person, not committed to writing. Bringing at least one other person when you’re car shopping doesn’t negate the importance of getting all promises in writing, but substantially lowers the chances of a car salesman trying to pull a fast one. The salesman and his manager know that, in court, two people’s word trumps that of one.

A woman wrote me a letter in response to one of my columns. Her husband had recently passed away and this was the first car she had bought on her own. The dealer did not have the model car with the accessories she wanted and was unable to locate one at another dealership. She did not want to decide without seeing the actual car she wanted to buy but the salesman and manger talked her into signing a buyer’s order, assuring her that she was under no obligation to buy. They also included two accessories that she did not want because they said that “the manufacturer required it”. I’ve heard of distributors ordering cars with certain accessories from the manufacturer which essentially makes them “standard”, but never “$250 floor mats” which was one of the accessories she mentioned. I get a lot of emails, phone calls, and letters from people who made a bad deal in their car purchase and want to know how they can get out of it. This is one of the less egregious, but I chose it because it was a simpler and shorter example.

There is strength in numbers when shopping and negotiating to buy a car. In fact, this applies to any serious decision in life. You might be the sharpest, shrewdest negotiator on the block, but your odds of striking a better deal and not get taken advantage of are enhanced when you have others on your side. Personally, I make a habit of always having at least one partner when I am engaged in a serious, adversarial decision-making process. When meeting with those on the other side, I make it a point to arrive with at least as many people as they have present. One reason is the psychological factor. When you are in an office by yourself with two or three others, it can be intimidating. Another reason is that you always have people on your side to corroborate what was said. If a salesman or a sales manager makes a verbal promise that can be corroborated by a friend or two, it is far less likely to be broken. It will also hold up in court, if it must come to that. Of course, the better solution is to see that all promises are committed to writing.

Buying a car, especially a new car, is more often than not, an emotional decision. Having a friend or two with you can help you make more of an analytical, logical decision. Another point of view is always useful when making an important decision. Also, having one or two friends with you slows down the process to a level more easily absorbed and understood by you. A friend will often think of a question you should have asked but forgot.

Ideally you should bring someone with you who is skilled in negotiation and experienced in buying cars. However, if you don’t know someone like that, somebody is better than nobody.

Please understand that asking a friends, family member, or associates to join you in the purchasing of a car is not a sign of weakness; on the contrary, it’s a sign of intelligence and a sign of understanding how to stack the deck in your favor in a negotiation.

By the way, most car dealers are unhappy when prospective customers bring in advisors and friends. Naturally they feel that way because they recognize their chances of making a fast, very profitable sale are diminished.

Monday, April 09, 2018

Buying a Car When You Have Bad Credit

There are fewer things more sensitive or embarrassing than having to share your personal credit problems with a stranger. Having credit problems can also put many buyers in a weakened and defensive position when buying a car. Many people with bad, or too little credit feel like the car dealer is somehow “doing them a favor” by selling them a car and getting them financed. Some car dealers will lead you to believe that your credit is worse than it is to put you on the defensive. If they can make you believe that they’re doing you a favor by getting you financed, you’re less likely to complain about the price of the car, the interest rate, and even the type of car you buy.

Make no mistake about it. A car dealer is probably making more money selling a car to a person with bad credit a car than one with good credit. If you have a credit problem, go about buying a car with the same care and due diligence as if you had the very best credit. Shop and compare your financing, your interest rate, and your trade-in allowance. Get at least three quotes on each of these.

Lenders who specialize in lending to those with bad credit are known as “special finance” lenders. Many of these lenders charge the dealer a large upfront fee, as much as $2,500. Legally, the dealer is not supposed to add this fee to the price of the car you buy but, in the real world, the price of the car is usually higher as the result of this fee. Dealer also add high priced but worthless warranties to the price of the cars with the excuse that the lender requires it. This is a lie: it’s illegal for lenders to require a warranty to finance a car. In addition to an upfront fee, the interest rates are very high from special finance lenders. Because they anticipate a much higher amount of repossession losses, they must make more on each transaction. Don’t automatically accept a dealer’s opinion that you must finance through such a lender. There are many conventional banks, credit unions and auto manufacturer lenders these days that loan to people with bad credit. Their interest rates are lower and they don’t charge large upfront fees.

There is much fraud in special finance lending. Credit applications are falsified to show more time on the job, higher incomes, etc. W-2 forms and check stubs are counterfeited. Buyer’s orders show accessories and equipment that do not really exist on the car. Hold checks or promissory notes are misrepresented as cash down payment. Co-signers signatures are forged. Confederates pose as employers, answering cell phones or pay phones to verify employment. These falsifications are performed by finance managers, salesmen, brokers for special finance lenders (who are paid on commission) and the customers themselves. If you sign a credit application, be sure that you know all the information on that application is accurate. Be sure that you understand and agree to all parts of the transaction including down payments, accessories on the car, etc. Never be a party to falsifying information to a lender to obtain a loan. This is a federal crime.

Advertisements aimed at people with bad credit usually exaggerate with claims like, “We finance everyone”, “Wanted, good people with bad credit”, “No credit, no problem”, and, my favorite, “No credit application refused” (it doesn’t say your loan won’t be refused, just your application). My advice is to ignore these kinds of ads and these kinds of dealers. Their strategy is to take advantage of people with bad credit who they believe will buy any car, pay any amount of interest, and any profit to the dealers if the dealer can get them a loan.

It is common practice in Florida to encourage the car buyer to drive the car home immediately upon signing all the papers. In some states like New York this is not permitted until all the car has been registered with the state in the new owner’s name. The reason for this immediate delivery (commonly referred to as the “spot delivery”) is to discourage and possibly even prevent the buyer from changing his mind. Taking possession of the car is a legal consideration making the purchase more binding. I recommend that you not rush the purchase or the delivery. For one thing you want to be sure that the car is exactly the way you want it…clean inside and out, all the accessories properly installed, no dings, dents or scratches, and that you have a complete understanding of how to operate all the features of the vehicle.

More important than anything above, is to be sure the car does not have an outstanding safety recall from the manufacturer. Independent used car dealers, especially those who specialize in folks with bad credit, have become the home for dangerous used cars with unfixed safety recalls. Many new car dealers, like the AutoNation stores, wholesale all cars with unfixed Takata airbag recalls. These cars are bought at auction by used car dealers like DriveTime, OffLeaseOnly.com, CarMax, and thousands of others smaller used car dealers. These cars are retailed to people with bad credit who don’t ask the right questions because they are “grateful” to find financing. ALWAYS CHECK THE VIN OF THE USED CAR YOU BUY AT WWW.SAFERCAR.GOV.

I mention the risk of the “spot delivery” in this column on buying a car with bad credit because it can be especially harmful to someone whose credit is denied after the car has been delivered. You will most likely be required to sign a “Rescission Agreement” before you drive the car home. This is a quasi-legal document which requires you to return the car if your credit is denied. You will probably be told that your credit will be approved, but sometimes the dealer is wrong. The rescission agreement will have a charge for time and mileage that you have put on the car you are driving. Usually this is a very high charge from 25 cents per mile plus $50 per day and higher. It can take weeks for a special finance lender to rule on a credit application. If your credit is denied you could owe the dealer thousands of dollars which the down payment you made might not even cover.

As frightening as all the above may sound, the one single thing you can do to prevent bad things from happening when you purchase a car is to choose your car dealer very carefully. How long has he been in business? What is his track record with the Better Business Bureau, the County Office for Consumer Affairs, and the Florida Attorney General’s Office? Ask friends, neighbors, or relatives who have dealt with this car dealer what their experiences have been like. Choosing a good dealer with integrity will resolve 95% of all your concerns.

Monday, April 02, 2018

HOW TO COMMUNICATE BETTER WITH YOUR CAR DEALER (and be taken more seriously)

As many of you know, I communicate directly with my customers. Some would say to a fault. I don’t have a secretary or administrative assistant. My dealership’s telephone receptionist never asks the caller “who’s calling” or “may I ask the nature of your call?” and she puts my calls (and the calls to all my employees) right through. If I am not in my office, she puts them through automatically to my cell phone…7 days a week. I also have five red phones in five locations of my dealership…the showroom floor by the receptionist, the service customer waiting lounge, outdoors in the service drive, the used car department and in the body shop waiting lounge. Each phone has a picture of me with the message, “Customer Hotline to Earl Stewart. The Buck Stops Here. Have We Not Exceeded Your Expectations? Please Let Me Know. Simply Pick Up the Receiver and Wait For Me To Answer.” As if all this wasn’t enough, I put my personal cell phone number on my business cards and pass them out to my new customers at our bimonthly New Owners Dinner.

I say all this, not to brag (or maybe just a little). It might surprise you that I am not deluged with phone calls. I get quite a few, but considering I sell 400-500 cars a month and service thousands of cars each month, I doubt if I average more than 25 calls per day. Most of them are positive, complimentary calls. I believe one reason for this is that my employees are motivated to work harder to satisfy my customers because they know, if they don’t, I’m going to hear about it very quickly. Another reason is that my customers are remarkably respectful of the fact that they can call me and do not take advantage of it. When you extend your trust to people, they almost always respect that and do not take advantage.

Of course, you are not going to find a lot of car dealers who do what I do. But here is how you can improve your communications in other ways that will allow you to get problems solved and promises kept. Always ask for the business card of every person you deal with. If they don’t have a card, be sure to get their name. This improves your service right away because the person is no longer anonymous. Ask the person for his cell phone number. There was a time when it was considered wrong to call someone on his cell phone, but that was before cell phone rates became so cheap and the cell phone became universal. If this is a critical person you are dealing with, ask for his home telephone number too. Here is a little trick that I use when I do this. I always start out by giving them my cell phone and my home phone number. Then I say, “and may I have yours?” I can’t remember ever having been refused. If someone you are doing business with refuses to give you his cell phone number, maybe you should wonder why.

Also, make it a point to be introduced to this person’s manager. Get the manager’s business card and as many contact numbers as he is willing to share with you. When you do this, you have put the salesman or service advisor on notice that if he doesn’t return your phone calls you will be calling his boss. If you really want to have an edge, ask to meet the general manager and/or owner of the dealership. Get his telephone numbers. Now you will have everybody’s attention when you come into the dealership to transact business. Also, when you have their cell phone number, you can also text them which is less invasive than a phone call.

If you are a “computer person”, collect email addresses from everybody you deal with. Email is not as timely as a telephone, but it has the advantage over the telephone because it is “on the record”. When you make a request of a person by email, he can’t deny it because you have a copy of the message. I know that with Microsoft Outlook email, I get an acknowledgement every time somebody opens an email that I sent them. Furthermore, you can copy as many people as you like with an email. You can send copies that the primary recipient knows about or make them blind copies that he can’t tell were sent. Someone is a lot more likely to act on your request when he knows that it is a matter of record and his boss was copied with the email.

If you can force yourself into the habit of getting names, telephone numbers, and email addresses from everybody you deal with and their managers, conducting business with your car dealer (or any other business) will be much smoother and trouble free.

Monday, March 26, 2018

Treated Badly by a Car Dealer? 5 Steps You Can Take to Resolve the Issues


Hopefully the sales or service experience with your car dealer went well. But, too often, 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 

The 4th step is to call the Florida Department of Motor Vehicles, DMV, and/or the Florida Attorney General’s office. These are extreme steps to be used for serious, even illegal, activities. The DMV has the power to suspend or cancel a dealer’s motor vehicle retail license, putting him out of business. The Attorney General’s Office can file criminal charges and assess large fines, even jail terms. The DMV phone number is (850) 617-2000 and the Attorney General’s phone number is 866-966-7226. . This website provides you with three forms to download…from the Florida Attorney General, Florida Department of Motor Vehicles, and the Florida Office of Consumer Affairs, www.FloridaCarDealerComplaints.com

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 him. Under the Florida Deceptive and Unfair 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. However, there are honest and talented consumer advocate attorneys that will counsel with you at no charge. They will tell you whether or not you have a lawsuit you can win. If you do, the car dealer will pay your attorney’s fee. 

Hopefully you never have to resort to the final step of hiring a lawyer. In trying steps one, two, three and four 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. 

Monday, March 19, 2018

Car Dealers Exploiting the Elderly

Not a week passes without at least two or three elderly people contacting me about being victimized by a South Florida car dealership. These are usually pre Baby Boomers in their seventies, eighties and nineties. I’m happy to say that I have a high rate of success if I’m contacted soon after the purchase…within a few days. The first thing I do is contact the dealership’s owner. With publicly owned dealerships like AutoNation, Penske Automotive, and Sonic, and Group One I have to contact the real General Manager. I emphasize “real” because sales managers will often try to foist themselves off as the General Manager, but they are only in charge of the car sales departments and are really “general sales managers”. In the rare occasions I strike out, I have no alternative but to contact the Florida Department of Motor Vehicle, DMV which is the best governmental agency to keep a car dealer on the straight and narrow. You can download a complaint form to the Florida Department of Motor Vehicles at www.CarDealerComplaints.com.

I use the term “car dealer” often in my columns and I want to make it clear that I am not trying to get personal. I could use the terms “car salesman” or “car sales manager”, but the dealer is the boss and I firmly believe the placard Harry Truman had on his desk, “The buck stops here”. The guy or gal that owns the place is responsible for the actions of their employees. Just because he doesn’t know that there are some salesmen or managers taking advantage of his customers, is no excuse.

When I became a senior citizen I began to see the world in a different light. I’ve been a car dealer for over 50 years, but I have seen my own business through the eyes of a senior citizen for only the last few. One thing that has helped this awareness has been my relative new public persona, brought on by my TV commercials, radio show, public speaking appearances and this column precipitate a lot of phone calls, texts, emails, and letters from seniors in South Florida and all over the USA. Some of these are very complimentary. Many of them are also calls for help or advice from those who were taken advantage of when they bought their car.

I get more calls from widows than any other single group. Recently, I was introduced to a widow in her seventies who had come in to buy a car with her nephew. She had never bought a car before. Her husband had always handled this responsibility. He passed away 2 years ago. She was very wise to bring along her nephew to assist her in her first car purchase. Our culture and especially the roles of women have made incredibly positive changes since the second half of the 20th century. More women who grew up in the fifties, sixties, and seventies were relegated to the role of homemaker and mother. The Man had a “regular” job and earned the money, and made the major decisions like buying a car. As you know men generally predecease their wives and many widows have never bought a car before.

Buying the right car at the right price is no easy task. There are a lot of variables like trade-in allowances, monthly payments, discounts, interest rates, lease or buy, finance or pay cash, and all that I just mentioned has to do only with the cost of the car. What is the best make and model for you? This process should take lots of time in the study and preparation, but too often purchases are made in just a few hours with little or no preparation.

The reasons why the elderly are so often targeted and exploited by car dealers (and other businesses) are many and complex. For one thing, there are just a lot of elderly people living in South Florida and other popular retirement communities. When a reporter asked John Dillinger why he robbed banks, Dillinger replied, “Because that’s where the money is”. Even though most senior citizens are smarter than ever, I believe that we are perceived by many as not being so smart. We are looked upon as easy prey. Also, I think that we pre-baby boomers grew up in a more trusting, family oriented time and we sometimes trust others more than we should.

In summary, if you are a pre-baby boomer like me, take extra precautions before you enter a car dealership. Do your homework carefully. Never, never make a rush decision. Do not buy that car on the same day you come into the dealership. Go home, discuss it with friends and family, and sleep on it. And if you call me, please call me before you buy the car, not after it’s too late.

Monday, March 12, 2018

Consumer Reports: Don’t Buy Another Vehicle without it!

If you don’t already subscribe to Consumer Reports, you should. I have been a subscriber for as long as I can remember. I rarely buy any product without consulting this great magazine. I also subscribe to Consumer Reports online, www.ConsumerReports.org, which is even more current than the regular magazine. I recently received their annual auto issue (April 2018), which no car buying family should be without. All libraries should have this on hand.

Don’t be fooled by other magazines with similar names purporting to objectively analyze and recommend products. There is only one Consumer Reports. They do not accept any advertising and therefore are not beholding to any companies. CR is a not for profit organization and receive all their funding from donations and the sale of their subscriptions. They even go beyond this and will not allow a retailer or manufacturer to use the name Consumer Reports in their advertising. Even if Consumer Reports gives a product a great rating, that company cannot mention this in their advertising. If they do, they get sued by Consumer Reports. Lastly, CR will not accept the gifts of products from manufacturers for testing. They purchase the products at full retail asking price to be sure there can be no conflict of interest. No other company goes this far and is this “squeaky clean”. J.D. Powers is a company that ranks and compares lots of products including cars, but they allow companies to use the JD Power name to advertise their products when they rated them good. You can understand why a consumer might be just a little more skeptical of J. D. Powers’ objectivity than Consumer Reports’.

I am not saying that Consumer Reports is infallible. They do make mistakes and they have been successfully sued by some companies that were affected by their mistakes in testing. But this is very rare. As a car dealer for over fifty years, I have not always liked what I read about all the makes and models of cars I have sold, but I grudgingly had to admit that the reports were almost always accurate. I must confess that with some makes and model cars I have sold over the years, I was very thankful that the circulation of Consumer Reports is not very large. Their circulation is growing as consumers become more educated and sophisticated.

This annual auto issue should be a mandatory read before you buy your next used or new car. Here are some of the articles in this issue…Top Picks (the best new vehicles they have tested), Best and Worst (tells you the ones you shouldn’t buy), New Car Ratings (255 tested models, from best to worst by category), and Ten Top Picks (Only the very excellent models), Reliability trends (repair histories on all makes and models.


Consumer Reports also offers other car buying services like their “New Car Price Service” which discloses the actual cost to the dealers, rebate and incentive information, negotiating strategies, and their expert recommendations. They also offer a “Used Car Price Service” which provides an evaluation tool kit that helps you establish the right price for most used cars made from 2010 to 2017.

Monday, March 05, 2018

The Ten Commandments for a Car Dealer (Secrets for Success for all Businesses)

I composed these “ten commandments” for all the employees in my car dealership, aka The Earl Stewart Code. They didn’t come to me in a vision or on a mountain top, but evolved over fifty years as a car dealer. Most of them evolved over the last two decades which is why I often refer to myself as a “recovering car dealer”. But just like the biblical Ten Commandments, they don’t do any good unless people know, understand, and apply them. In my dealership, all my managers and other employees know that we must “walk the talk”.

(1) Do whatever our customer asks, if she believes she’s right. It’s not important whether our customer is right or wrong, only if she honestlybelieves she’s right.

(2) Do what is right for the customer even if you don’t have to. Just because we’re not required by law or contract to do the right thing is no excuse.

(3) If your supervisor is not available, then you do what is the right thing for our customer. All Earl Stewart Employees are empowered to spend or do whatever is necessary to do the right thing by a customer. If in 20-20 hindsight you should err, you will not be held to blame because you acted in good faith to make our customer happy.

(4) Always answer all phone calls, emails, texts, and messages of any kind from our customers ASAP. Nothing angers a customer (or me) more than a delayed or non- response from us.

(5) All Customers must be treated with courtesy and respect always. Just because you judge a customer to be unreasonable is no excuse not to treat that customer with courtesy and respect. If you are incapable of dealing with a customer, involve your supervisor or me.

(6) You will always tell our customers the truth, the whole truth, and nothing but the truth. I believe in giving every Earl Stewart employee a second chance except when it comes to dishonesty.

(7) Your first loyalty is to our customer, not to the auto manufacturer. In the rare case where a dispute arises between our customer and Toyota over warranty coverage, for example, we advocate for our customer. We argue and present the facts on behalf of our customer but abide by Toyota’s decision.

(8) You must personally take ownership of our customer’s problem. This means that if you are the first person to learn of a customer’s complaint or problem, you have the responsibility to stay on top of its resolution until you personally verify that the issue has been resolved. Don’t just refer or delegate the problem to someone else even it is outside your department.

(9) Promise our customer less than you will deliver. Always be conservative when making promises to your customers. Overestimate the time of a service or the date of arrival of the new car they ordered. Under-promise and over-deliver.

(10) Trust your customer as much as you hope he will trust you. We’ve all been burned by trusting someone who disappointed us but that’s a very small percentage. The fastest way to earn trust is to trust the person you want to trust you. Somebody must go first. Let it be us.

Monday, February 26, 2018

BEWARE THE PHONY MONRONEY!


The Monroney label, commonly knowns as the “window sticker”, is meant to inform car buyers of the official retail price suggested by the car manufacturer. The U.S. Senator who drafted this law, Mike Monroney, said this about his law: “The dealer who is honest about the so called ‘List Price’ cannot compete with the one who packs several hundred dollars extra into it so he can pretend to give you more on the trade-in.” Senator Monroney said this in 1958 and the only thing that has changed is that dishonest dealers are now charging several THOUSAND dollars extra. To add insult to injury, some remove Monroney Labels before delivery which is illegal.

The Monroney label is the window sticker that is mandated by federal law to be affixed to every new vehicle sold in the United States up until the time the new owner takes delivery. The name, Monroney, derives from Senator Michael Monroney’s law passed by Congress in 1958. Prior to the proposal of this bill, there was often a large discrepancy between the showroom price and the actual price of a new vehicle. The fact was that existing price tags did not tell the full story. Most customer-quoted prices were for "stripped-down" models and did not include additions for preparation charges, freight charges, federal, state, and local taxes, or optional factory-installed equipment requested by the purchaser. These hidden charges were used by some dealers to increase the selling price while giving the new vehicle buyer an inflated idea of their trade-in allowance. This price confusion led to a slump in auto sales during the early 1950's. Senator Monroney's bill was designed to prevent the abuse of the new vehicle list prices, but would not, however, prevent dealers and buyers from bargaining over vehicle prices.

Well, as you might expect, car dealers have figured out a way to evade this very good law. An alarmingly large number of dealers use a label that is designed to look almost identical to the official Monroney label. It has the same coloring, fonts, type size and layout. This “phony Monroney” is affixed right next to the genuine article. Unless you really look close and read all the fine print, you will have no idea that you are looking at a counterfeit Monroney label. This phony Monroney includes extra charges to artificially inflate the manufacturer’s suggested list price, MSRP.

One of the most egregious of these charges is an addition of pure markup just for profit which has a variety of names. Some of these are “Market Adjustment”, “Additional Dealer Markup”, “Adjusted Market Value”, “ADM”, “Market Adjustment Addendum” and “Market Value Adjustment”. Some dealers advertise discounts from DSRP vs. MSRP, with DSRP standing for “DEALERS suggested retail price.” This is simply an amount that the dealer adds to the manufacturer’s suggested retail price. It is almost always used in high-demand, low supply cars. I have seen these labels with charges as much as $10,000 added to the MSRP. Additions of $1,500 to $3,995 are common. Dealers also use the counterfeit labels to price dealer-installed accessories, which are OK, if the accessories are not marked up higher than the manufacturer marks them up. But dealers usually add virtually worthless accessories just to increase the price of the car to you with very little increase in cost to the dealer. Nitrogen in the tires, pin stripes, roadside assistance, floor mats, etched and tinted glass are just a few examples.

When customers confuse the phony Monroney with the real one, this distorts their point of reference for comparing prices between different dealerships. Manufacturers’ Monroney labels are consistent for the same year, make and model with the same accessories. A 2016 Honda Accord with the same factory accessories will have the same MSRP at every Honda dealership you visit. But if dealers fool you into thinking their label is part of the Monroney, you’re not comparing “apples and apples”. This can adversely affect a good buying decision in many ways. Some buyers focus mainly on how big a trade-in allowance they can get for their old car. If one dealer has the same car marked up $3,000 more than another dealer, he can offer you $3,000 more for your trade and still make the same profit as the other dealer. Some buyers focus on how big a discount they get from “sticker”. It’s easy to give a higher discount if you have artificially inflated the MSRP by thousands of dollars.

My advice to you is carefully inspect the sticker on the new car you are contemplating buying. Read it completely and especially the fine print. If there is a second label on the car, it is possible that it is fair. This would be for purposes of adding an item, installed by the dealer like floor mats or stripes, priced the same as the manufacturer charges. If that second label includes a markup over MSRP for no reason other than profit for the dealer, make sure that you adjust for that number in your comparisons for discounts and trade-in allowance. Some dealers also add a second markup to these labels and that is the infamous “dealer fee” also sometimes called “doc fee” and “dealer prep”. Some dealers do not put this on the phony Monroney but print it on their buyer’s orders and program it into their computers.

Monday, February 19, 2018

Should I Trade in My Old Car or Sell it Myself?

When you trade in your old car on your next car, the dealer will try to retail your car or sell it at auction for more than he allowed you in trade. If he successfully retails your car, he will make about $2,000. If he wholesales it at the auction, the profit will be less. You should know that this is what the dealer wants to do. Sometimes it doesn’t work out that way and he will lose money on your car at the auction. Or, he may be unable to retail your car and then most certainly lose money when he is forced to wholesale it.

Obviously it is more difficulty for an individual to make a profit by selling her own trade-in than it is for the dealer. That is one of the main considerations you must consider before deciding to sell your old car yourself. Most people run an ad in the local paper and/or online (www.CraigsList.com) to advertise their trade. If you do this, you need to know what to ask for your car, and I recommend consulting www.kbb.com. This is Kelly Blue Book’s Web site and will tell you about what your car is worth wholesale and retail. Another way to determine this is to ask dealers for your make of your car what they will buy it for. This will establish the wholesale value. CarMax is a good company to consult if there is one near you. Once you establish the wholesale, you should consider a markup of less than what car dealers are asking. A $1,000 markup is about half of what car dealers are marking up used cars for and a good price for you to try. When deciding how much profit you want to make, remember that you’re losing the 6% (or whatever state sales tax applies) sales tax reduction that you earn when you trade your car in. This takes a lot of work and you will be dealing with a lot of “tire-kickers” and people who cannot afford to buy your car. I strongly advise you not to extend credit. Require full payment in cash. There’s also the “security issue” of having strangers visit your home and drive our car. Set a time limit on how long you will try to sell your car. Remember that your used car is depreciating every week and your cost of advertising will climb. I wouldn’t suggest you hang on to your old car for more than a month.

www.Ebay.com, is a good alternative to advertising your car in the newspaper. A lot of car dealers use eBay to retail used cars and it is very effective. There are schools on how to retail merchandise on eBay and eBay has tutorials. There are also a lot of books at any bookstore on this subject. There are companies who will do all the work for you and you only pay them a fee if they are successful in selling your car. If the dealer you are buying your new car from sells cars on eBay (most do), you can ask him if he will post yours eBay along with his cars for a fee. www.AutoTrader.com is also a good way to advertise your car online.

If you fail in your attempt to retail your old car, remember to be careful to maximize the amount you get from your dealer as trade-in. Often dealers will attempt to trade a car in for below wholesale. Be sure you have a firm handle on the true wholesale value of your trade. You can get bids from other dealerships to purchase your car for cash and you can check with www.kbb.com. If you are buying a car from a dealer franchised to sell a different make than your trade-in, be wary. This dealer will likely be unable to offer you as much as a dealer who is franchised to sell the make of your trade. People looking to buy a used Toyota are more likely to visit a Toyota dealership than a Chevrolet dealership. That is why it’s important to get bids from other dealerships before accepting the trade-in offered by the dealer you’re buying your new car from.

Monday, February 12, 2018

Buy Your Next Car Online

Prediction: Five years from now, 90% of all new cars will be purchased online. Currently, in 2018,  it’s less than 30%. The reason this percentage will balloon is simply that the online price is usually your lowest price. More and more car buyers are figuring that out every day. Dealers must give their best price to a prospect inquiring over the Internet because that dealer will have that one chance to sell the car. If they try “the old negotiating game” the Internet prospect will simply choose the lowest price from several other quotes he gets. When my friends ask me to advise them on how to get the best price on a new car, I always tell them to use the Internet.

I’m not suggesting that you don’t visit your local dealer to see, touch, smell, and drive the new vehicles you’re considering. This is very important. You can’t make a valid, final decision on which new vehicle is best for you by solely reading data and looking at pictures on the Internet. Research of that nature is important, but you should finalize your decision with visits to the dealers to experience the vehicle.

Once you have made your final decision on the year, make, model, color, and accessories, you are ready to use your smartphone or PC, and choose the dealer from whom you will buy this specific vehicle. If you’re not handy with computers, ask a friend or relative who is. First go to the manufacturer’s Web site like www.ford.com, www.toyota.com, www.chevrolet.com, etc. You will be able to type in your zip code to find all the dealers of that make within a given radius, usually about 40 miles, giving you 3 or 4 dealers. To expand the radius, choose another zip code further from yours. The dealers within your radius will show their Web site addresses. Click on their Web site and ask for a quote on the specific car you have selected. Most Web sites have a page for what is called a “quick quote”. You type in the year, make, model, color, and accessories. It will also ask you for your name, telephone number, address, if you have a trade (always indicate you do not have a trade), whether you are ready to buy now (yes), and other questions. All you really need to fill out is year, make, model, and accessories and your email address. If you prefer not to be contacted by phone, don’t fill in the phone number. If they require it before you can submit your request, type in any 10 digits so that the Web page will allow you to. If you can’t find a “quick quote” link, just email your request to their Internet sales department.

Depending on your computer skills, this whole process should take less than half an hour. Think of all the time, gasoline, shoe leather, and especially aggravation you are saving compared to visiting several dealerships in person. The time it will take to get back quotes varies from dealership to dealership. You may get some back within a few minutes, some will take a few hours, and some may take a day or two. Believe it or not, some might not respond at all. There are even a few dealers who will not quote a price on the Internet, but try to lure you into their store with false promises. Ignore them. I recommend that you get a minimum of 3 valid price quotes on your specific vehicle. It’s so easy to get quotes, why not get a half dozen or so? You are not necessarily even limited by driving distances. If the best price is from a dealer who is too far away, show that quote to a dealer nearer you and ask him if he will match it.

There are some things that you must be careful about. Be sure that that the price you get is an “out the door” price. That is a price which excludes only federal, state, and local fees and taxes which are usually just for tax and tag. Most dealers in Florida tack on fees of their own which are variously referred to as “dealer fee”, “delivery fee”, “do fee”, electronic filing fee, tag agency fee, etc. Typically, there are more than one of these phony fees. This is illegal or highly regulated and enforced in many states, but not in Florida. These fees vary from around $700 to over $3,000. Be sure that this fee (which is just profit to the dealer) is included in your “out the door” price. Also, be certain that you’re comparing “apples and apples”. When you select your low bid, double check that this dealer is quoting you on the same year, make, model, and accessories as the other dealers. A good double-check is to compare the MSRP. The MSRP, manufacturer’s suggested retail price, will be identical on identically equipped cars of the same model and year. Also, be sure that the car  you are considering will actually be there when you come in. Give them deposit on your credit card to hold the car for you. I they try any “flim-flam”, you can always stop payment on your credit card.

One “trick” you can use on a car dealer who is reluctant to quote you his real out-the-door price is to tell him your bank or credit union requires a signed buyer’s order from the car dealer with total (itemized) out-the-door price. Tell the dealer that gives you the lowest online price to email or fax you a copy of this buyer’s order so that you can take it to your credit union or bank, pick up the check, and bring it to the dealer. If he refuses to do this, you know he’s lying to you about his price. I mystery shopped a dealer last week that gave me an impossible low price on line. I emailed him that I liked the price, would come in the next day to buy the car, but he wouldn’t send me a copy of the buyer’s order. I asked him three times and he would not respond.

Online car buyers are the wave of the future. The retail car business is going through rapid changes and the old fashioned, price-haggling way of buying cars is slowly but surely becoming obsolete. If you haven’t already, now is the time to join the ranks of the smart, sophisticated car buyers.

Monday, February 05, 2018

Getting the Best Price from the Car Dealer


Buying a car involves deciding upon a mind-boggling combination of choices: make, model, trim level, options, accessories, etc… Almost every one of these choices affects the cost of the vehicle. Throw in the vast array of manufacturer rebates and lease and finance incentives and you have a very confusing landscape to navigate. This makes simply knowing the cost of any particular car very difficult.

Almost all car salespeople and sales managers are paid a percent of the profit on the cars they sell. The average percent paid to the salesperson is 30%; he makes $60 on a $200 profit and he makes $1,200 on a $4,000 profit. The profit per car for the average car salesperson in a month varies greatly and can range from as low as $100 (or less) to as much as $10,000 (or more)… even on the identical car! A car salesperson’s success depends on how high a price he can sell you the car, so each deal is different and depends on the dynamic between the salesperson and the customer.

All of this is because of the antiquated system of selling cars, a system that was derived from nineteenth century horse-trading. Back in the day, horse-buyers were far better at negotiating a price fair than car-buyers today. Most people couldn’t afford a horse, and those that could were far better prepared and equipped to negotiate.

These days, some car buyers are very shrewd, savvy negotiators and can hold their own with any car salesman. However, many car buyers are not as well prepared. Young, first time car buyers might not be so shrewd. Buyers whose first language isn’t English can have problems. The elderly, especially widows, are often victimized by car salesmen. The shrewd negotiator can actually buy the exact same car from the same dealer and salesman on the same day for thousands less than the elderly widow.

One of the most important things you can do to prevent paying a much larger profit for the same car than the next customer is to compare prices with different dealers for the EXACT SAME YEAR-MAKE-MODEL with the exact same accessories and exact same MSRP. Remember to use the MSRP, the manufacturer’s suggested retail price and not the dealers price often displayed next to the MSRP sticker.

It can be difficult to get a firm price from a car dealer, but I’ve found a method from my hundreds of mystery shopping reports that works every time. Tell the dealer that you are financing through your credit union or bank, and they require an official signed buyer’s order from the dealership before they will give you the check made out to the dealer. Take that buyer’s order to at least two other car dealers of the same make and ask them to beat that bottom line price. You can also compare that price to the TrueCar price at www.TrueCar.com and the Costco Auto Buying program at www.CostcoAuto.com.

One word of warning is DO NOT VARY FROM THE EXACT CAR YOU SELECTED when you compare prices. Each car dealer you visit will do and say anything to persuade you to choose a different car. The dealer knows that his hands are tied and he must cut his profits if he gives you his best price on the car you’ve selected. He may tell you another car is better, cheaper, or that the car you selected is not available. Persist and get at least three prices on the car you decide on.

Monday, January 29, 2018

Earl’s Top Ten Suggestions How NOT to Get Ripped Off by A Car Dealer


1. There are only two reason you should physically visit a car dealership during the car buying process…to test drive and take delivery of the vehicle you’ve selected. When you visit a car dealership to get pricing and information, you lose control. The car sales people and managers are very good at what they are trained and paid to do…sell you a car TODAY at the HIGHEST PRICE.

2. The best online tools to ensure you get a low, transparent, honest price are www.CostcoAuto.com and www.TrueCar.com. Both online buying services require their certified dealers to offer you a low out-the-door price plus government fees only. Their dealers are not permitted to add dealer installed accessories and “dealer fees” to the quoted price.

3. Always use Consumer Reports, www.ConsumerReports.org, to select the best make and model. Consumer Reports extensively tests all new and used cars for safety, reliability, maintenance and repair costs, cost of insurance, customer complaints, fuel economy, and resale value. They list the best and worst new and used cars.

4. Never finance your car with the dealer without first checking and comparing the rate and terms with your bank or credit union.

5. Finalize your purchase toward the end of the month. Yes, car dealers almost always cut their prices toward the end of the month. The last day of the calendar month is a great time to get an even lower price than you were offered earlier. But, be sure you’ve spent ample time selecting the right car at the lowest price available before the end of the month.

6. Never buy a used car without a CarFax or AutoCheck report, checking the VIN for recalls on www.SaferCar.gov, and having the car thoroughly checked by an independent mechanic.
7. When you make the decision to buy a car, devote at least a week or two to the process. A car is one of the most expensive purchases you’ll ever make. Don’t let your excitement and emotion force you into rushing such an important financial commitment.

8. Always take an extensive test drive in the actual vehicle you’ve decided to purchase. Driving around the block isn’t adequate. No two cars are the same, even two of the same year, make and model. Drive the car under the same conditions that you drive your car daily, over the same roads and highways.

9. Ignore all car dealer and car manufacturer advertising. Car dealers and manufacturers advertise prices to “get you in the door”. These prices are usually understated with fine print conditions that raise the price by hundreds or thousands of dollars.

10. Car dealers make more money after they sell you the car in the “business” or “Finance and Insurance (F&I) office than they did when they sold you the car. My fourth suggestion is to never finance with the dealer unless you check and compare with your bank or credit union. But, even if you don’t finance with the dealer, you will still find yourself in the “F&I” office ostensibly to “sign all of the paperwork”. This isn’t just to “sign the papers”, it’s to sell you extra products and services you probably do not need. Some examples are extended warranties or service contracts, prepaid maintenance, GAP insurance, road hazard insurance, etc. Sometimes these extras are included in your finance contract without your knowledge. Be sure that you buy no extras that you’re unaware of or don’t completely understand and need.

Monday, January 22, 2018

Don't Pay Car Dealers 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’re 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 nitrogen instead of air. 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 must 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 we 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.

Consumer Reports also conducted a test on nitrogen in tires vs. air. The bought samples of virtually every tire sold in the USA, filled half with nitrogen and the other half with air. The let the tires sit for one year and then checked the air pressure vs the original. There was virtually no difference in air pressure. Consumer Reports conclusion was that nitrogen won’t hurt your tires, but you shouldn’t waste your money. Air is just as good.

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 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.

Monday, January 15, 2018

Bait and Switch Advertising

All car dealers pay the manufacturers the same prices for their new cars. Large volume dealers will lead you to believe that they pay less, but this is not true. So, when a car dealer advertises a price for a new car, he has no price advantage over his competition. This isn’t the case with most other products. Large volume sellers like Amazon, Walmart, Target, and Costco can negotiate much lower prices from the manufacturers than smaller “mom and pop” stores. Protective car dealer franchise laws lobbied into law in all 50 state legislatures require auto manufacturers to sell their cars to all their dealers at the same price.

Virtually all the prices for new cars you see advertised are so low that it would be impossible for a dealer to remain in business if he sold more than a very few cars at that price. The reason for this is that, if a dealer advertised realistic prices with a reasonable profit built in, another dealer would advertise a lower price. The dealer who advertised a realistic price is helping his competitor sell a car.

Most of the new car prices you see advertised are below the dealers actual cost. He protects himself by selling very few at this price and counting this loss as a cost of advertising. Next to an advertised car you will see some letters and numbers like, #5632A. That is the “stock number” of the car being advertised. This is all that the dealer does to tell you he has just one at this price. The chances are that if you are not the first person in the dealership on the morning of the ad, this car will be gone. Often these cars never existed, but you are told that the vehicle was sold.

Look for these two fine print disclosures at the bottom of the ad: (1) Price good on date of publication only. (2) Price good with copy of this ad only. These are just two more ways the dealer can avoid selling you the car at the advertised price.

If you’re a regular reader of my column, you understand about “dealer fees”. These fees are additional dealer profits ranging from $700 to over $2,000 that are added to the agreed upon price of the car by virtually every car dealer in Florida. They’re generally more than one dealer fee. “Dealer Fee” has become a generic term for phony fees like electronic filing fee, notary fee, doc fee, tag agency fee and many more. Florida law requires that this dealer fee be included in the advertised price. When the salesman tells you the advertised car has been sold but he has another one “exactly like it”, he can legally add back all of his dealer fees.

As you would guess, the salesman’s commission on an advertised car is often either zero or very small. Having no or a very small incentive to sell an advertised car, he will most likely encourage you to buy any other car.

My recommendation to you is to ignore advertised new car prices. If you must respond to an ad car, call the dealership first and ask if the car is still available. If the answer is no, you have saved yourself a lot of time and aggravation. If the answer is yes, ask if they will hold the car for you. If you must, offer to give them your credit card for a deposit to hold the car. If they won’t hold the car, save yourself the wasted trip.

The only way to get the best price on a new car if you’re dealing directly with car dealers is by getting competitive bids from at least 3 car dealers for the exact same year, make, model, and accessorized car with the identical MSRP. You can do this on the Internet, by phone, or in person. The Internet is likely to give you the lowest price. UseConsumer Reports magazine, the Internet www.edmunds.com and www.kbb.com are two excellent free sources of information), or even your local library. There are two other great ways to buy online, www.TrueCar.com and www.CostoAuto.com.

Monday, January 08, 2018

Dear South Florida car dealer:

You’ve probably heard of Earl Stewart Toyota, located in Lake Park, FL but you might think we’re located in North Palm Beach. We exercise “poetic license” and use North Palm Beach as our location because Lake Park is such a small town, population 8,155 as of 2017, few people know where it’s located. Last year, 2017, Earl Stewart Toyota sold 3,349 new cars and 1,934 used… 5,283 total vehicles!

As a car dealer in a large metro area like West Palm Beach or Delray, you must at least be curious how a car dealer in a small town with a population of just over 8,000 (including those too young and too old to drive) can sell more cars than you. In fact, for the last 14 years, Earl Stewart Toyota sold more vehicles than any new car dealership on Florida's east coast between Orlando and Broward County.

How is this possible? The answer is that Earl Stewart Toyota is selling cars to your customers in your town…Deerfield, Delray, Boca Raton, Boynton, Lake Worth, West Palm Beach, Palm Beach Gardens, Riviera Beach, Wellington, Stuart, Ft. Pierce, Port St. Lucie, Melbourne…in fact all over the state of Florida. Your next question must be “why is this happening?”

All car dealers claim to be honest, transparent, and to “love" their customers. This is clearly not so because the Gallup Organization in its annual poll since 1977 has ranked car dealers last, or almost last, in their “Honest and Ethics in Professions” poll, http://news.gallup.com/poll/1654/honesty-ethics-professions.aspx. At this dealership, they walk the talk.

1. Earl Stewart Toyota posts the lowest out-the-door price on every new and used car.

2. The prices Earl Stewart Toyota's customers are quoted by its sales people and advertisements are the same as its lowest online price.

3. Earl Stewart Toyota does not add dealer fees to the posted, quoted prices. As you know, the dealer fee is the generic term for the hidden profit you add to the price of your cars. You use lots of names to disguise it like electronic filing fee, processing fee, notary fee, doc fee, tag agency fee, dealer services fee, etc. Earl Stewart Toyota's prices are our lowest and out-the-door, adding only what it pays the state of Florida for the sale tax and license plate/registration. 

4. Earl Stewart Toyota does not pre-install dealer installed options or accessories and add these to its advertised prices. All options and accessories on cars it sells you are factory installed, unless you ask for them to install a special option after you buy the car. 

5. Earl Stewart Toyota sells you the car that you came into buy, and does not try to switch you to another car with more profit.

6. Earl Stewart Toyota gladly gives you its lowest price on any car you choose to buy and encourages you to shop and compare its price with the competition. They don’t try to switch you to leasing because dealers make more money leasing. The price its customers pay if they lease is the same price and profit to them if they buy.

7. Earl Stewart Toyota doesn’t ask its customers to trust them without reciprocating that trust. If the customer changes her mind for any reason after the purchase, they offer a100% unconditional moneyback guarantee for one week. This is a full cashback offer, not a “credit” on another car. There are no conditions and no fine print, the customer doesn’t even have to tell them why he/she changed her mind.

8. Earl Stewart Toyota offers real online, one-click Amazon-like car buying. A customer doesn’t even have to come into the dealership or talk to a salesman. They offer free delivery anywhere in Florida. The customer can pay with his credit card, bank transfer, or finance. 

9. Earl Stewart Toyota is the only car dealership I’m aware of that does not take away the customer’s right to sue the dealership if he/she feels she has a reason. All other dealers have an arbitration agreement in the fine print of their vehicle buyers order. This requires customers to waive their constitutional right to their “day in court”. An arbitration agreement requires that any dispute be resolved by a team of lawyers or retired judges. This “team” is chosen by the car dealer and their decisions often favor the car dealer. This is further evidence that Earl Stewart Toyota trusts its customers as much as they ask their customers to trust them. 

10. At Earl Stewart Toyota, there are no automated answer machines, secretaries, or anything else shielding anyone from direct access by all customers. One again, how can one expect customers to trust them if we don’t return this trust. My personal cell phone number is 561 358-1474 and every one of my customers has this number. All my managers…service, sales, body shop, parts, finance, and accounting make their cell phone numbers available to all our customers. We also have five RED PHONES strategically located around my dealership. My customers can pick up any of these phones and be automatically connected to my cell phone. We do this because we know we’re far from perfect and we do make mistakes; but what makes us different from other car dealerships is that our customers can always reach the person in charge who can make it right.

There, Mr. Car Dealer, you now have the 10 secrets to Earl Stewart’s success. All you must do is put them in place and be sure they are followed by your employees. If you do this, you’ll be able to sell as many cars as I do, or maybe even more! Excuse me if I don’t look worried, because it requires a lot of courage, trust, moral integrity, transparency, and HARD WORK.



Yours truly,

Earl Stewart