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