Monday, June 17, 2019

Why Even “Honest” Car Dealers Lie to You

If you owned a business that employed a lot of people, including family and friends, that all depended on their earnings from that business to support themselves and their families, how important would the SURVIVAL of that business be to you? Of course, you and your family also depend entirely on the earnings from that business to provide housing, food, medical care, and education for you and your family. Arguably the strongest instinct in all living creatures, including humans, is SURVIVAL. Would you break the law, act unethically, or deceive someone if it was necessary to provide food, shelter, or medical care for you and your loved ones?

All retail businesses must advertise their products to sell them. Arguably, the most important factor in the consumer’s decision to buy is the LOWEST PRICE. Granted, quality and reliability of the product are important too, but once a buyer has decided on the best product, she begins looking for the lowest price. Most car dealerships each sell one brand of cars and a few sell several. Once the consumer chooses the brand, they begin shopping for the lowest price. A Ford, Honda, Jeep, or Toyota at one dealership is the same as those at all other dealerships. Furthermore, the car dealers all pay the manufacturers the same price for their cars. Despite what car dealers may tell you, large volume dealers don’t pay less for their cars than small volume dealers.

Consumers learn the lowest prices from car dealers advertising…online-digital, TV, radio, newspapers, email and snail mail. This is where the problem arises. If you’re in the market to buy a New 2019 Jeep Wrangler Unlimited Sahara 4X4 with an MSRP of $53,940, you’re going to check prices at all the Jeep dealerships in your market first. Usually there are at least 3 dealers for each brand in a market, but when you add shopping online a buyer can shop prices at DOZENS of dealerships. You’ll buy your Jeep from the dealer that gives you the biggest discount from MSRP, the lowest price.

All car dealers, of course, know that you will visit the dealer with the lowest price, so they must be sure their advertised price will be either lowest or close to it. They can only ensure that you won’t find a lower price by pricing their Jeep lower than they can afford to sell it, often below their true cost. This is how HIDDEN FEES, aka DEALER FEES came to exist. These hidden charges aren’t fees at all…at least not legitimate government fees; Hidden dealer fees are PROFIT TO THE DEALER which are not revealed to you in the advertising or the prices quoted to you online, by phone, or in person. A car dealer with $1,000 in hidden fees (average in South Florida) can advertise a car for $1,000 lower than he can afford to sell it for and still make a profit after he adds his hidden fees.

HAVE YOU EVER BOUGHT A CAR FOR THE ACTUAL ADVERTISED PRICE? Most people will say “no” and those that say “yes” probably were tricked into believing the hidden fees that were added were legitimate government fees like sales tax and license plate. Dealers can “name” a hidden fee anything they like. They typically choose names that sound “official” like tag agency fee, electronic filing fee, doc fee, notary fee, doc stamps, administrative fee, dealer handling fee, and dealer prep fee. Often, buyers never see the fees because they aren’t added until you’ve signed the dealer “worksheet” which you thought was a purchase agreement. It’s not a legal document and this disclaimer is in the fine print. Dealer do this, so they don’t have to disclose all of their hidden fees. These are printed out on the real buyer’s order in the Finance Office, along with reams of other paper and fine print that nobody has the time to read.

Who’s to blame for this sad state of affairs? The answer is our legislators and regulators, both federal and state. The political contributions by auto manufacturers, car dealers, and their associations dwarf that of the gun manufactures and NRA and rival those of Big Insurance. If the auto manufacturers and dealers don’t want a politician elected, he just must find another line of work.

About the only thing you can do to get the best price on a car is to outsmart the car dealer, and I have tool that you can download that will help you. It was invented by Nancy Stewart, my wife and co-host of my consumer advocacy radio show, “Earl on Cars”. Download this form at www.OutTheDoorPriceAffidavit.com. It is a legal affidavit that you insist your car dealer sign before you sign to buy any new or used vehicle. The car dealer is swearing that the price he advertised or quoted is the true out-the-door price plus government fees only. If the car dealer won’t sign it, buy your car from the dealer that will.

Monday, June 10, 2019

Seniors… Think Twice Before Leasing

Leasing a new vehicle is very different from renting. When you sign a 36-month or 48-month lease, you obligate yourself for 36 or 48 monthly payments, even if you can no longer drive. You’re also responsible for maintaining insurance on the leased vehicle, even if it’s not being driven. You may become incapacitated or your driver’s license can be revoked. If you die, your estate is obligated for the remaining payments.

It’s possible to have your lease assigned to another person, but this must be approved by the leasing company. There are companies that, for a fee, specialize in finding people to assume lease payments, but these people must have the approval of the leasing company.

You may have noticed that most new car advertising is for leasing, not buying. This is becausecar dealers average a much higher profit from a leased car than a purchased car. Also, the car dealer has a much better chance of keeping you as a customer if you lease. You must return the car to the dealer at the end of the lease. The car dealer and leasing company (usually the manufacturer) have monthly contact with you, because your making lease payments. Leasing companies penalize you with a “lease disposition fee” if you opt not to buy or lease another car of that make.

For all the above reasons, the car dealers and manufacturers will encourage you to lease rather than buy. Be forewarned that unscrupulous salesmen will give you bad advice to persuade you to change your mind about buying and leasing instead. They earn much higher commissions on leases, and they’re more likely to lease or sell you another car. The expression used by car salesmen when they attempt to do this is called the “Lease Flip”. The sales manager will instruct his salesman who is having difficulty making a big profit on a car purchase to “Flip her to a lease”. The salesman will try to focus your attention on the lower monthly payment of a lease and not mention the fact that you are building no equity when you lease like you do when you purchase. He won’t mention the higher cost of insurance, excess mileage charge, lease inception fee, lease disposition fee, or the charge at the end of the lease for excessive wear and tear. Some sales people will imply, or say, that you can return a lease early without any penalty. Too often your trade-in is undervalued or not valued at all on the lease contract. Lease contracts are very complicated compared to purchase contracts. There’s lots of fine print and variables that affect the total cost. The main numbers you have be aware of are the lease factor (interest rate), residual value (estimated value at the end of the lease) and the capitalized cost. The capitalized cost should reflect the fair credit for your trade-in and should represent the discounted price if you were buying the car.

With all that said, a lease can be just as good a value as a purchase, but leases are far more complicated. This gives the car dealer, manufacturer, and car salesman more of an upper hand. There’s an old joke that goes like this…” If you sit down at a poker table, look at all the other players, and can’t figure out who the sucker is…it’s probably you. Always be extra careful when you’re playing somebody else’s game.

Saturday, June 01, 2019

$100,000 DEALER FEE CHALLENGE

Debate the Resolution to Make Dealer Fees Illegal


WHAT? DEBATE RESOLVING THAT DEALER FEES SHOULD BE MADE ILLEGAL
WHEN? ANY SATURDAY MORNING 8AM TO 10 AM
WHERE? TRUE OLDIES RADIO STATION, 8895 N MILITARY TRAIL, PBG, FL


The first car dealer to accept my challenge will debate me for about one hour on my regularly scheduled Saturday morning 8-10 AM radio show (WSVU, TrueOldies 95.9 FM & 106.9 FM; Stream www.EarlOnCars.com) The audience will judge the debate, hearing both sides of the dealer fee issue and vote for the winner. The loser pays the winner $100,000. If I win, I pledge to contribute the $100,000 to Big Dog Ranch Rescue (www.BDRR.org).

DEBATE RULES: 

1. Earl Stewart and the Car Dealer will jointly agree upon, and choose a neutral, unbiased moderator; if no agreement can be reached, a flip of the coin will allow the winner to pick the moderator.
2. The Car Dealer must be a legally appointed dealer, named in the franchise agreement between him or her and the manufacturer of the vehicles he or she sells. 

3. Earl Stewart will open the debate, explaining to the audience why the dealer fee should be made illegal. The length of time will be 5-10 minutes.

4. The car dealer challenging this proposition will take 5-10 minutes explaining why dealer fees should remain legal. 

5. Earl Stewart rebuts the car dealer challenger for 5-10 minutes.
6. The Car Dealer rebuts Earl Stewart for 5-10 minutes.
7. Earl Stewart has a second 5-10-minute rebuttal.

8. Car Dealer has a second 5-10-minute rebuttal. 

9. There can be no interruptions of either speaker.
10. The listening audience will cast their votes for the winner by texting their votes or posting their votes to Facebook, Twitter, YouTube, or Periscope. All votes must be accompanied by a name and phone number for verification. Any employee of a car dealership, car dealer association and family members of either are ineligible to vote. 

I invite all challengers to contact me directly on my cell phone, 561 358-1474 or email me at Earl@EarlOnCars.com. If I receive more than one challenge, the participating challenger will be “drawn from a hat”. The $100,000 prize will be deposited in the escrow account of an attorney mutually agreed upon by both parties at least one week before the debate. If they cannot agree on an attorney, he or she will be decided by the toss of a coin. 

For those unfamiliar with my position on dealer fees and/or unclear on exactly what the dealer fee is, I refer you to my numerous blogs and newspaper articles on this subject, http://oncars.blogspot.com/search?q=dealer+fee

Monday, May 20, 2019

Good People Make Good Car Dealerships

In my columns over the years I’ve always advocated carefully choosing the car dealership that you buy your vehicle from or allow to service it. I still believe this is important. In fact, I publish a list of dealers that I recommend you buy your car from and a list that I recommend you avoid,www.GoodDealerBadDealerList.com. We’ve all visited a restaurant or retail store and had a terrible experience with a waitress, sales person, or other employee and never returned. Yet, we’ll hear friends recommending the same store that we swore never to patronize. We condemned an entire company because of one person.

I also wrote a column a couple of years ago in which I suggested that you carefully choose the individual who advises you and sells you service on your car. These individuals are really commissioned sales people who sell you service just like car sales people sell you cars. Unfortunately, most dealerships call them something else like “assistant service manager” or service advisor. In my dealership we used to call them Assistant Service Managers because that’s the term that Toyota uses. We now call them “service advisors” because too many people thought they were dealing with the service manager. In all candor, I’d feel more comfortable naming them what they are, “service sales people” and I may make that change.
It occurred to me that the same recommendation applies to all companies, not just car dealerships and it applies to all departments in a company. Whichever car dealership you choose, take the time to pick and choose those individuals you deal with. Car dealerships, just like other organizations, are nothing more than the sum of their parts…their people. You should get to know the person who sells you service and, if you don’t like him, ask for another person to handle your service requirements. You should also meet and cultivate a manager in the service department.

The same holds for the sales department. When you buy a car, don’t settle for the first salesman who approaches you. For example, if you’re a woman you may feel more comfortable dealing with another woman. Or, if your first language is Spanish or Cajun, you may feel more comfortable with one who can converse with you in your native tongue. Don’t be shy about asking, and don’t feel bad about hurting the feelings of the first sales person. An automobile is the 2nd largest purchase most people make and it’s very important that you feel comfortable with the person selling it to you. Furthermore, if after dealing with your sales person for a while, you think you made a bad choice, ask to speak to the sales manager or general manager. Believe me, car buyers hold all the cards (until they get your money), and no sane sales manager is going to lose a sale because a prospective customer doesn’t like or trust the sales person she’s dealing with. He will handle your sale personally or choose another sales person you do feel good about.

Car dealerships have other departments including parts, finance and insurance, accounting, and some have body shops. My same recommendation applies to all departments. A word of caution, when you ask to speak to a manager, be sure you’re really are truly speaking to one. Car dealerships are notorious for calling rank and file employees managers to trick the customer.

My purpose in writing this column is in realization of the fact that there are no perfect companies, especially car dealerships and that includes mine. I employ about 160 individuals and I would be less than candid if I didn’t say I have a few rotten apples in my barrel. Unfortunately, I don’t know who they are and finding them is a continuous work in progress. The same thing applies to all companies including car dealerships. In my list of recommended dealers, there are some employees of those dealerships who would take advantage of you, but most would not. In those dealerships that I recommend you don’t buy your car from, there may be a few honest, courteous employees. Then there are all the dealerships that I don’t put in either category. Your odds of finding the right individual are much better if you patronize a good company or car dealership, but never let your guard down.

Just stay away from the ones that I recommend you don’t deal with. In every organization there’s a tipping point. A great company reaches a critical mass of good employees and as their reputation grows, more good employees from other companies seek to be employed there. Honest, hardworking, courteous people enjoy working in an environment where others are like them. The same holds true for evil dealerships and bad companies (those on my “don’t buy” list). A good person with a conscience has a very difficult time functioning in an environment where, from top management all the way down, the design is to trick and take advantage of customers. These few good people don’t last long in evil dealerships and flee to a place where they can treat their customers in a manner that lets them sleep at night.

Monday, May 13, 2019

Buying a Car When You Have a Credit Problem

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. Make no mistake about it. A car dealer is probably making more money selling 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. 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 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 false phone numbers 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 criminal offense.

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 of 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 of the features of the vehicle.

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 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? Check his Google rating. 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, May 06, 2019

THE LOWEST PRICED CAR CAN END UP BEING THE MOST EXPENSIVE


Too often car buyers focus on buying the car that fulfills their preferences of styling, size, and accessories that they can buy for the lowest price. There are other important cost considerations you should look at before buying the cheapest alternative.

Resale value is the number one consideration that is most often overlooked by car buyers. All cars depreciate in value, but some hold their value a lot better than others. You might save a thousand dollars by choosing to buy one used or new car over another more expensive make and model. But if the make and model that cost $1,000 more, held its value by $2,000 more over the 3 years you owned the car before trading it back in, the “lowest priced car” was really $1,000 more expensive.

There are several ways you can check on how much cars will depreciate. A good one is to check the resale value of that same make of car that is 3 or 4 years old. You can also find this information on the Internet. Kelly Blue Book, for example is www.KBB.com, www.Edmunds.com, and www.ALG.com are good sources. If you are thinking about buying a new 2019 car of a particular model and make, find out what a 2016 model sells for today. Compare other makes and models.

Maintenance and repair cost are the second biggest factors in measuring the true cost of a car. When a car has a relatively higher depreciation, one of the biggest reasons is probably because it is more prone to break down. CheckConsumer Reports or Google the year make and model to find the projected repair histories of the cars you are comparing. Saving $1,000 on a make and model is not very significant when you are facing the cost of a blown transmission or engine. Does the manufacturer provide complimentary maintenance? This should be a factor to consider as well.

Big cash rebates and big discounts are not necessarily a good thing. First you must ask yourself, why is it necessary for this manufacturer to giving me such a big cash rebate (I have seen them advertised as high as $11,000) to sell his car? You will generally find that the manufacturers of higher quality, higher demand cars offer fewer rebates and discounts. These are also the manufacturers of cars that depreciate less and cost less in terms of repairs. Big rebates and discounts also negatively affect a cars resale value. It’s what you could call “vicious cycle”. A car is hard to sell because of its high repair costs and high depreciation so the manufacturer pays a big cash rebate to sell it. The rebate lowers the value of the used car of that make and model because the price of a used car directly tied to the cost of that same new car.

You will be surprised how much the color of the car you buy can affect the resale value. Think about it. The color was very important to you when you bought your last car. It is just as important to the person who will be buying the car you trade in. The most popular colors are white, silver, beige, and black. If you have a “thing” for green, blue, orange, or another unusual color, it can negatively affect the resale value of that car by over $2,000. I’m not suggesting that you always buy a white car, but if you like white, silver, beige, and black you are going to get more money for that trade-in than if you like blue and green. Bright colors can be good for certain models. Red is a popular convertible color for example.

Be sure to check your cost of insurance before you make a final decision. Cars with the most safety features, highly rated in collision and rollover tests, relatively low cost of repair especially for bumpers, and non high-performance cars have much lower insurance rates.

Cars are no different than any product that you buy when it comes to the principal of “the cheapest product is usually not the best value”. You buy a quality pair of shoes, paying more than you would for a cheap, poorly made pair because they will look good and wear many times longer. Shopping for the lowest price is a very good idea, but only after you have chosen a car that has low depreciation, operating costs, and cost of repair.

Monday, April 29, 2019

Car Salesmen Don’t Look or Talk Like Car Salesmen Anymore


 - by Earl Stewart 

Many of my readers know that I send mystery shoppers weekly to car dealerships around South Florida so that I can learn how they are selling, leasing and servicing cars. I do this for two reasons. The first is that this is a common practice for all businesses to learn how their competition operates and to have the competitive edge you really need to know how your competitors do business. The second reason is that I feature a mystery shopping report on my weekly radio show, Earl Stewart on Cars that airs between 9 and 10 every Saturday morning. I've done hundreds of these mystery shops and I've noticed an interesting trend over the years.

Back in the day, car salesmen looked and sounded like what many people consider the stereotype for a car salesman. You know what I mean, gold chains, diamond pinkie ring, sunglasses, loud shirt, and white shoes. As car buyers became more educated, sophisticated, and demanding, it didn't take car dealers long to realize that they had to dress their car salesmen in a nicer fashion, “lipstick on a pig”, But even though they looked nicer, they sounded and acted pretty much the same.

With the advent of the Internet, Google, today’s consumer has made a quantum leap in knowledge, education and sophistication. Today’s buyer of virtually everything is far more demanding and far less tolerant of deceptive advertising and sales tactics.

The most recent shift I've seen in car dealers’ efforts to make their salesmen seem less threatening is in who they hire and how they train their salesmen to behave. More and more car dealers are hiring younger sales people, and fewer older, experienced salesmen. These dealers want their sales people to treat their customers with courtesy and respect and gain their confidence. We've all heard the terms con man and con-artist. We also know the verb, “to con”. To con somebody means to steal from them as in Bernie Madoff. Did you know that “con” is short for confidence? A successful con man is good at gaining the confidence of his victim. The con man’s appearance and how he sounds play a critical role in this. I often hear people who were taken advantage of and stolen from say, “He looked and sounded like such a nice person”. Think about that for a minute. How successful could a crook be who looked and sounded like one?

The important thing to remember is that it’s usually not the car salesman who is responsible for the deception. Certainly, he cannot be held accountable for the deceptive and often illegal advertising. In fact, many car sales people hate the advertising that brings prospective customers into the car dealership by false and misleading promises. Especially in today’s economy, many people work in car dealerships because they can’t find a job anywhere else. Imagine how embarrassing it must be to a salesman, new to the car business, when he must try to explain away a bait and switch advertisement. How can you tell a prospective customer that the “sale car” on the showroom floor costs several thousands of dollars more than the one advertised on TV? In my mystery shops, it’s becoming more and more common for the salesman to “nicely” tell my shopper when she asks to see the advertised car that they can’t really buy the car for that price and to apologize for the deceptive ad! These sales people will say right up front that the ad is just to get you to come in so that they can try to sell you a car at higher price.

Also, the salesman is often an innocent victim when it comes to the deceptive sales practices. Many car dealers use attractive, friendly sounding sales people to lure the fly into the web. It’s been proven in studies that customers put more stock in the individual they deal with at a store than the store itself. If that salesman can capture your trust and especially if he can make you like him, the car dealership is 90% closer to closing the sale.

Today’s sales people are more “greeters” than sales people. Many car sales people today are not privy to the cost or even the selling price of the cars they “sell”. The true cost of the car is known only by the sales managers who are also known as closers and team leaders. These managers are also the only ones authorized to quote a price. They also appraise your trade-in. The interest rates you pay and the warranties, maintenance plans, GAP insurance, etc. that you buy are all handled by mangers.

The bottom line is that it’s not the rude, aggressive car salesman you need to be afraid of. There are very few of those around anymore. The car dealers have wised up and you will be dealing with young, attractive, non-threatening, and polite sales people today. In many cases, they know very little about the unfair and deceptive sales and advertising. What little they do know makes them feel bad, but they need the job and want to put food on the table for their family. As much as you like this salesman or saleswoman, don’t give him or her your trust when it comes getting a fair price, trade-in allowance, lease payment, or interest rate. That nice, smiling sales person is the dealer’s pawn and is “just following orders”. Verify all the numbers your new friend gives you by competitively shopping and comparing at least two other car dealers.

Monday, April 22, 2019

The Lemon Law: Your Nuclear Option

By Earl Stewart
Lemon laws are state laws which give rights to purchasers of new vehicles if they find that they have bought a car with a defect that cannot be fixed in a timely fashion by the dealer or the manufacturer. Every states lemon law is somewhat different, but they all have a lot in common and are aimed at the same result. Most car buyers have misconceptions of the lemon law. These are some the most common ones: The car owners think they are going against their car dealer when they are really going against their car’s manufacturer. If you prevail it costs the car dealer nothing. The manufacturer pays. The law applies only to cars purchased as new, not used. If you win a lemon law dispute, the manufacturer or dealer does not simply replace your car with a brand new on. The amount of credit you win toward a replacement vehicle is arrived at by deducting a charge for the usage of your lemon car based on time and mileage.

The complete lemon law process is a difficult and time-consuming task for all concerned… you, the car dealer, and the manufacturer. It’s difficult for you because the law requires specific and extensive documentation. You must have allowed your dealer to try to fix the problem at least three times and you must have detailed written documentation of this. You must be sure that your complaint is clearly spelled out by the dealer on your repair order and that his failure to fix it is also a matter of written record. After three times, you must notify the manufacturer by certified letter that you are invoking the lemon law. Now the manufacturer has one last chance to fix your car. At this time, the manufacturer may take your car to another dealer who he feels is more competent in repairing your car. If the fourth attempt to fix your car fails, your case is assigned to a board of arbitrators. Their ruling is final. This entire process usually takes a very long time. Several months is not uncommon. Meanwhile, you’re saddled with a car that has a problem nobody can fix.

When you formally invoke the lemon law with your certified letter, you sever all communications with the manufacturer other than formal, legal communications as dictated by the law. The manufacturer considers you a legal adversary and their attorneys consider anything they say to you as something that can be used against them in the arbitration. At this point they are legally barred from fixing your car or talking to you about fixing your car.

All the above is why I advise that you use the lemon law only as a last resort…the nuclear option. Put emotion aside and focus on what your purpose should be, which is to have a car that you can drive without the problem that has been driving your crazy since you bought it. Your priority should not be to punish the dealer because, as I already said, he suffers nothing from your winning a lemon law decision. You are punishing the manufacturer to some extent, but this is “business as usual” to all manufacturers who fight (and usually win) thousands of lemon laws annually. What I’m suggesting is that you might want to consider giving the dealer and manufacturer a little more time to fix your car after the first three attempts. If they look like they are sincere and trying hard, it could save you a lot of time driving your broken car (not to mention the mental anguish) compared to waiting months for the lemon law process to work itself out.

I’m not saying that you shouldn’t tell the dealer and manufacturer that you will invoke the lemon law if you have no other choice. You should do that. You should let both the dealer and the manufacturer know in no uncertain terms that you have meticulous documentation of their failed efforts to fix your car, you have familiarized yourself completely with the specifics of your state’s lemon law, and you will not hesitate to invoke it if you are left no other choice. This will instill a sense of urgency to fix your car ASAP if it’s within their abilities. The reason is the dealer and the manufacturer want to keep you as a customer. In fact, the dealer may stretch to give you a better deal on a new car to replace yours than you would ever otherwise have gotten. He can’t do that once the lemon law has been invoked because he would be trading in a “lemon”. A “legal lemon” has the same stigma as a flood car or totaled car that has been rebuilt. The manufacturer not only wants to keep you as a customer but wants to avoid the cost of arbitration (the manufacturer is responsible for all the costs… the cost of disposing of a lemon, and the cost of the damage to their reputation by chalking up another lemon laws loss in the record books. For more information about the lemon law, Florida residents can call the lemon law hotline, 800 321-5366 or you can click this link: http://www.myfloridalegal.com/lemonlaw.

Monday, April 15, 2019

FLORIDA CAR BUYERS BEWARE

By Earl Stewart

This front-page headline appeared in last week in USA Today. I’ll summarize the story for you: Car dealers and their associations are lobbying legislation into state laws to preserve their legal right to sell you a used car with a dangerous recall, like a defective Takata airbag. The law they’re advocating “sounds” like a good law until you think about it. The law is to require car dealers to “disclose” to the buyer that the car they’re buying has a dangerous recall. The word “disclose” when applied to car dealers becomes an oxymoron. Car dealers bury their “disclosures” in ultra-fine print, flashed on the TV screen, webpage, or PC monitor in a fraction of the time you can read it…that is, if you could even see it. Car dealers believe that, but getting these laws passed, they’ll dissuade federal and

state government from doing what they should have done years ago…MAKE IT ILLEGAL TO SELL A VEHICLE WITH A DANGEROUS SAFETY RECALL. By the way, there’s still no law in Florida requiring car dealers to disclose dangerous recalls.

Can anyone explain to me why it’s legal to sell you a vehicle with a dangerous recall? In fact, it’s even legal to sell you a vehicle with a dangerous recall that CANNOT BE REPAIRED. Thousands of used vehicles are sold every day with defective Takata airbags that cannot be fixed because the parts to fix them are unavailable.

I’ll answer my own question of why this is legal. Auto manufacturers and car dealers are afraid of the huge economic impact upon them if such a law were passed. The Florida Auto Dealers Association, FADA (and all other state dealers’ associations) the National Auto Dealers Association NADA, and Big Auto (VW, Toyota, GM, Ford, Honda, etc), combined, have ENORMOUS POLITICAL CLOUT. The auto manufacturer-auto dealer syndicate makes the NRA look “politically weak by comparison”.

So, what are Florida used car buyers to do? Contact Governor Ron DeSantis, Attorney General Ashley Moody, and your state senators and representatives. I tried for two years with Rick Scott and Pam Bondi to no avail. The more likely successful course of action is to check every used car you buy at www.SaferCar.gov, the website for the National Highway Traffic Safety Association. DO NOT BUY A USED CAR UNTIL YOU CHECK YOUR VIN AND VERIFIED IT HAS NO OUTSTANDING SAFETY RECALLS.

Monday, April 08, 2019

FOR IMMEDIATE RELEASE: Florida Attorney General’s Seniors vs Crime presents free program April 25 on How Not to Get Ripped Off when Buying, Leasing or Maintaining a Vehicle


Earl and Nancy Stewart to be Featured Speakers

Thanks to our new Florida Attorney General, Ashley Moody and her Seniors vs. Crime members, Tony Zappone, Sheila Butler and Frank Starnella for inviting Nancy Stewart and me to speak to the seniors of South Florida this April 25th.

Attorney General Ashley Moody has clearly prioritized doing more to protect Florida’s large and growing elderly population from fraud and abuse. She recently announced the formation of Florida’s Senior Protection Team that will work closely with Seniors vs. Crime and the Florida Department of Law Enforcement.

The details of our public seminar on how to avoid being taken advantage of when buying, leasing, maintaining or repairing a vehicle are shown below. If you are a senior, or know seniors that can benefit from our seminar, please book this time and location in your calendar or ask them to: April 25, Thursday, 2 PM at 900 Brandywine Road is located just west of the I-95, Exit # 53, Palm Beach Lakes Blvd. interchange, located on the United Methodist Church campus. Google Maps link is https://goo.gl/maps/7qSXbXU4yV72.

PRESS RELEASE:
Seniors vs Crime, a special project of the Florida Attorney General’s Office, is presenting a free public seminar to educate senior citizens on how they can prevent being victimized when buying, leasing or maintaining their vehicle. The program will be on Thursday, April 25 at 2 p.m. at 900 Brandywine Road in West Palm Beach, at the Gathering Place on the United Methodist Church of the Palm Beaches Campus. Earl and Nancy Stewart will be the featured speakers. The first 500 attendees will receive a free copy of Earl Stewart’s book “Confessions of a Recovering Car Dealer.” He is the owner of Earl Stewart Toyota in North Palm Beach. Light refreshments will be served following the program.

Topics to be covered include how to avoid tricks and scams when buying or leasing a vehicle, how to determine if buying or leasing is the best option, what to look for in a qualified mechanic or body shop, what vehicle safety options are helpful for senior drivers, how to get the most money for a trade in, are extended warranties a smart buy, how to shop for the best financing, and more. Attendees can submit questions ahead of time to earl@EarlOnCars.com with Seniors vs Crime in the subject line or text questions to 772-497-6530.


Reserve a seat by calling 561-844-3461 
or by emailing sandrav@estoyota.com
Reservations are encouraged but not required. 


“We’re pleased to offer local seniors the opportunity to learn how to avoid being ripped off when buying or maintaining their vehicle,” said Tony Zappone, a member of the Palm Beach County Seniors vs Crime organization. “Crime prevention is our key mission, and to help seniors avoid these costly mistakes is important because investing in a vehicle and maintaining it are among the biggest expenses of our age group, and an area where many are most at risk.”

“Being a senior myself, and in the car business for more than 50 years, I have too often seen older people taken advantage of and it is very upsetting,” Earl Stewart said. “Cheating anyone is wrong, but taking advantage of someone on a fixed or limited income is especially bad. We are happy to be able to pull the veil back and reveal some of the ‘tricks of the trade’ to educate people so they can avoid becoming victims.” Nancy Stewart will address some of the issues that older women face when buying or maintaining their vehicles. “Knowledge is power and we want them to go into the process of buying or maintaining their vehicle with as much information as possible,” she said.
The program site at 900 Brandywine Road is located just west of the I-95 – Palm Beach Lakes Blvd. interchange. Google Maps link is https://goo.gl/maps/7qSXbXU4yV72. Plenty of free parking is available immediately adjacent to the meeting site and the building is fully accessible.

The Seniors Vs Crime Project is sponsored by the Attorney General to reinforce the message of crime prevention and to provide methods by which Florida’s senior population can be alerted to consumer fraud, con games, and other criminal acts. The purpose of the Seniors Vs Crime Project is twofold: to offer crime prevention seminars to Florida's elderly and to provide comprehensive training for law enforcement officers and other criminal justice practitioners in understanding how the aging population impacts upon the role of police and other criminal justice professionals.

The program has more than 2,000 volunteers staffing 44 local offices throughout Florida. For more information about Seniors vs Crime visit www.seniorsvscrime.com or call 1-800-203-3099.



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Monday, April 01, 2019

A “TOOL” FOR AN HONEST PRICE FROM A CAR DEALER, AT LAST!


The form above was created based on a discussion with Nancy Stewart, my co-host on our radio show, “Earl Stewart on Cars”, last Saturday.

The next time you purchase a vehicle, insist that the price quoted to you by the salesman be certified by the signature of a manager of the dealership; or, if you are responding to advertisement, be sure that the advertised price is so certified.

Most of the skullduggery by car dealers comes from two sources, hidden fees added after the price is advertised or quoted and dealer installed accessories that are pre-installed on the vehicles, but not included in the advertised or quoted prices.

You can even use this form when you shop by phone or online. Fax or scan and email the form to the car salesman and insist that he sign it and fax or email it back.

This form will be available for download at EarlOnCars.com or you can just click this link here: Download "Out-the-Door" Price Form

You may even be thinking, what if the car salesman refused to sign this document? My answer is simple…LEAVE!

Monday, March 25, 2019

Why a Car Dealer Won’t Give You His Lowest Out-the-Door Price... by Earl Stewart

- by Earl Stewart

I’m sure you noticed that the last time you went car shopping you were unable to get a firm price on the car, unless you were willing to sign on the dotted line and put down a deposit. It’s impossible to get a firm, honest price on a car over the telephone, and very difficult to get one via email. If, on the off chance, you’ve never bought a car, or haven’t bought one in a long time, try this. Call any car dealership and ask for a price on a specific year, make, and model. I can guarantee that you won’t be able to get a firm price.

Have you ever wondered why you can get a firm price on just about any other product except an automobile? You can call a jewelry store and get a price on a diamond ring that costs as much or more than a car. You can go on Amazon.com, get a firm price, and buy virtually anything. Walk in or call any department store and they give you a firm, out-the-door price.

Car dealers don’t want to give you a firm price because they want to deprive you of your rights in our American free-market economy. One of our most important American freedoms is to be able to shop and compare prices so that you can choose the lowest one. There are some countries where the prices are dictated by the government or giant cartels. We have anti-trust laws in America that prohibit price fixing, monopolies, or collusion between companies which keep prices artificially high.

In fact, there’s even a federal law that says auto manufacturers must put a sticker on all vehicles that discloses the Manufacturer’s Suggested Retail Price, MSRP. This law was written by Senator Mike Monroney back in 1958. Senator Monroney felt there was a need for this law because, before then, car dealers could ask any price they wanted for car. They could put their own price sticker on their cars and mark their cost up any amount they chose. A car-buyer, pre-1958, had absolutely no basis for comparing prices between competing car dealers. The MSRP gave every car shopper a common basis for comparing discounts from MSRP. All dealers pay their manufacturers the same price for a car and all MSRP’s for a specific year-make-model have the same percentage markup. The Monroney label was a great idea and it worked well for a while, but it wasn’t too long before the car dealers figured out ways around this “handicap” to their profit margins.

The easiest way around an MSRP is simply to refuse to give the customer a firm discount unless they agree to buy the car, and therefore you can’t get a real price from a car dealer until then. Another way is to give you a firm discount but later add hidden charges like dealer fees, doc fees, electronic filing fees, or dealer installed accessories after you agree on the discount from MSRP. “Bait and switch” is a popular tactic which simply brings you in to buy a specific car only to find out that “It’s just been sold” …but here’s another one almost like it”. Another popular tactic is to advertise discounts from “list price”, “dealer list price”, or “sticker price”. Dealers even havecounterfeit Monroney labels printed that they display alongside of the real Monroney label. These counterfeit price stickers I’ve named “Phony Monroney’s”. I’ve seen advertisements from car dealers for “$10,500 Discounts on Every Vehicle in Stock”. The discounts aren’t from the MSRP but from “dealer list” which is clearly thousands of dollars above MSRP.

The best defense against all of this is to insist on an out-the-door price. Explain the following to the sales manager at the car dealership. “If you give me an honest out-the-door price, I will compare it with the two prices I already have from two other car dealerships. I will buy from the dealer with the lowest price. If you agree to give me your lowest out-the-door price, you have a 33% chance of selling me a car. If you refuse to give me a price right now, you have 0% chance of selling me a car, because I will walk out that front door and you will never see me or hear from me again.” You can accomplish the same thing over the telephone or via email.

I also recommend that you try www.TrueCar.com or www.CostcoAutoBuying.com, in addition to the tactic I just described. By way of full disclosure, I’m a TrueCar dealer, I own stock in TrueCar, and I was a member of the TrueCar national dealer council. If you give TrueCar a try, be sure to navigate to the page on their website that gives you the final price certificate. Do not rely on the estimated TrueCar prices on the previous page. To get the TrueCar certificate you must enter a name, email address, and phone number. If you would rather not be contacted by a car salesman, enter a different phone number and name. You can even get a different free email address from Yahoo, Microsoft, or Google. The TrueCar dealers are required to give you an out-the-door price on their price certificate (plus only government fees like license, sales tax, and registration). This means they should disclose all dealer fees and dealer-installed options. If they do not do this, you can call contact TrueCar and they will intervene on your behalf. Also, be sure to check the TrueCar or Costco out-the-door price with two other dealers. "Total Transparency Pledge: As a TrueCar Certified Dealer, this car dealer is committed to total price transparency. This means that this car dealer discloses its dealer fees and commonly installed dealer accessories in its pricing estimates. Call 1-888-TRUECAR if you have questions or concerns.”

Monday, March 18, 2019

A POORLY WRITTEN FLORIDA LAW INEFFECTIVELY “REGULATING” DEALER FEES - by Earl Stewart

by Earl Stewart

The Florida statute addressing the Florida Deceptive and Unfair Trade Practices Act clearly states (and I quote), “The advertised price must include all fees or charges that the customer must pay, including freight or destination charge, dealer preparation charge, and charges for undercoating or rustproofing. State and local taxes, tags, registration fees, and title fees, unless otherwise required by local law or standard, need not be disclosed in the advertisement.” I’ll translate that confusing, redundant, lengthy, outdated, and inaccurate paragraph. All vehicles advertised for retail sale must include all charges to the customer except government fees for sales tax and license and registration.

Almost no car dealership in Florida complies with this law. Some ignore it entirely, some disclose in the fine print only one, not all, of their non-government fees. Some state that there are fees added to the advertised price but don’t state the amount, some state the amount of one of their hidden fees in the fine print, but don’t INCLUDE it in the price.

Florida law does not regulate the amount of the dealer fee, allowing dealers to charge different amounts ranging from a few hundred to a few thousand dollars.

Florida law does not regulate the name of the dealer fee so that the buyer can readily identify it. Few car dealers call their hidden fees “dealer fees”; Dealer Fee has become a generic term for the imaginative names chosen by dealers such as tag agency fee, e-filing fee, electronic filing fee, documentary or doc fee, dealer prep fee, notary fee, dealer services fee, administrative fee, etc...

Florida law does not limit the number of dealer fees a dealer may charge. Rather than having one huge fee, most dealers today have several large fees by different names.

These hidden fees are often not revealed in the paperwork seen by the customer when the vehicle sale is consummated. Dealers often use documents labeled “worksheets” or “Internal documents” with fine print indicating that it is not a legal document of the sale. The official document, vehicle buyer’s order, is printed out in the Finance office along with “reems” of other documents like the installment sale or lease contract, odometer form, power of attorney, extended warranty, maintenance contract, GAP insurance, etc. No customer has the time or inclination to read all the fine print on all the documents. A high percentage of Florida car buyers are unaware they were charged these hidden fees.

This statute states, (and I quote) A dealer shall not “charge a customer for any predelivery service required by the manufacturer, distributor, or importer for which the dealer is reimbursed by the manufacturer, distributor, or importer.” Also, the Florida statute states (and I quote) “Must not charge a customer for any predelivery service without having printed on all documents that include a line item for predelivery service the following disclosure: This charge represents costs and profit to the dealer for items such as inspecting, cleaning, and adjusting vehicles, and preparing documents related to the sale.” The language of the Florida statute is confusing and contradictory. First it says dealers can’t charge for predelivery service if they’re reimbursed (plus paid a profit) by the manufacturer for this. Then, in the same paragraph, the statute requires that the dealer disclose their fee represents costs and profits for inspecting, cleaning and adjusting vehicles. All new car dealers are reimbursed for their costs and a dealer profit by their manufacturer for all predelivery service to the new car.

Finally, almost no car dealers disclose in an addendum alongside the federally mandated Monroney Label (MSRP) their additional fees. This law which became effective in 1958 was to give car buyers a consistent basis for comparison of prices for the same year-make-model-accessorized car between different car dealers. Before the Monroney Label, all car dealers would price their cars differently. The higher they priced their cars, the higher they could advertise their discounts or offer in trade-in allowance. With the Monroney label MSRP, car buyers were supposed to be able to fairly compare discounts and trade-in allowances. The hidden fees from several hundred to several thousand dollars make this impossible and violate the spirit and intent of the federal Monroney MSRP sticker.


501.976 Para. 16-18

Florida Deceptive and Unfair Trade Practices Act

(16) Advertise the price of a vehicle unless the vehicle is identified by year, make, model, and a commonly accepted trade, brand, or style name. The advertised price must include all fees or charges that the customer must pay, including freight or destination charge, dealer preparation charge, and charges for undercoating or rustproofing. State and local taxes, tags, registration fees, and title fees, unless otherwise required by local law or standard, need not be disclosed in the advertisement. When two or more dealers advertise jointly, with or without participation of the franchisor, the advertised price need not include fees and charges that are variable among the individual dealers cooperating in the advertisement, but the nature of all charges that are not included in the advertised price must be disclosed in the advertisement.

(17) Charge a customer for any predelivery service required by the manufacturer, distributor, or importer for which the dealer is reimbursed by the manufacturer, distributor, or importer.

(18) Charge a customer for any predelivery service without having printed on all documents that include a line item for predelivery service the following disclosure: “This charge represents costs and profit to the dealer for items such as inspecting, cleaning, and adjusting vehicles, and preparing documents related to the sale.”




Monday, March 11, 2019

DON’T FALL FOR CAR DEALERS’ NITROGEN-IN-TIRES CON GAME

I’ve been writing articles on why nitrogen in your tires is a waste of money for several years, but It has had very little effect on the number of car dealers that are selling it to their customers. Just last week, I received a text from a listener to my radio show disputing the fact that nitrogen is worthless for auto tires. The “Nitrogen Lobby” must be very powerful because we still have no federal or state legislation to curtail this. Selling nitrogen generation equipment and tanks of nitrogen to car dealers is very lucrative and, even more lucrative is the money car dealers make selling nitrogen to their customers. One large volume car dealer charges $899.99 for nitrogen in the tires of every vehicle he sells (August 2017). The cost of nitrogen is about “25 cents” per application. If you feel you absolutely must have nitrogen in your tires, Costco will give it to you for nothing which is exactly what nitrogen in your tires is worth. Costco reason for this is to encourage you to come back for more free nitrogen so that they can sell you a rotate, balance, and another set of tires.

I don’t recommend that you even accept free nitrogen for this reason. It’s widely accepted and recommended that you should have your tire pressure checked in your tires at least monthly. We do this free for our customers and automatically do it at every service visit. When you are sold or even given nitrogen, it comes with a sales pitch that nitrogen will remain in your tires for a much longer time than air which is not true. Click on this link to Consumer Reports article,www.NitrogenInTiresWastesYourMoney.com. If you believe the sales pitch, you’re less likely to check your tires inflation every 30 days. You may have a slow leak in one tire from a nail or screw, uneven wear from misalignment, or even a defective tire. Being “over confident” because you paid money for nitrogen may cause these problems to go undetected. Consumer Reports estimates that 1 lb. of nitrogen will escape from your tires every 3 months vs. 1 month for air. Remember that air is 78% nitrogen. I’ll bet the salesman that sells you nitrogen “forgot” to tell you that.

Be prepared for a great sales pitch on nitrogen. You’ll be told that NASCAR uses nitrogen in the tires of their race cars, NASA used nitrogen in the tires of their space shuttle, and that airlines uses nitrogen in airplane tires. All of this is true, but so what? A race car going 200 mph for hours and hours around an oval track subjects its tires to extremely high temperatures. 100% nitrogen gas does expand less under extreme heat condition than 78% nitrogen gas (air). The space shuttle tires go from zero atmospheric pressure in outer space to regular pressure at sea level. Airliners also have extreme pressure variations from 30,000 feet to the ground.

To be perfectly fair, I must say that some car dealers that are selling nitrogen have “drunk the Kool Ade” from the nitrogen generation equipment industry. Some car dealers believe that nitrogen is good for your tires. But those who do know must know how much they’re marking up that 25 cents worth of nitrogen they’re selling you! The argument for nitrogen can be persuasive. In fact, when the concept was first introduced, before the Consumer Reports study, I considered adding nitrogen to my customers’ tires. But, in an abundance of caution, I decided to test the claims about nitrogen myself. Over a six-month period I used pure nitrogen in 50% of my rental car fleet and regular air (78% nitrogen) in the other half. Guess what! There was no measurable difference between the pure nitrogen and air-filled tires in the fuel economy, tire wear, or inflation pressure after 6 months. We did check the tires every 30 days for slow leaks from road hazards, uneven wear from misalignment or other reasons, and we rotated and balanced the tires every 5,000 miles.

Finally, I’ll tell you why I was so careful to be sure there was no advantage to nitrogen. My dealership has a “free tire program”. Everybody who buys a Toyota from me, new or certified used, receives free tires (maximum of $700 per set) for as long as they own their car. The one requirement is that they bring their car back to me for the factory recommended service and we replace only tires from normal wear, not road hazards, underinflating or misalignment. I give away in excess of $100,000 worth of tires every month, well over a million dollars per year. BELIEVE ME, if I thought I could get longer wear from a tire for “25 cents” worth of nitrogen, I would! I look at the tires on my customers’ cars as “belonging to me” because I incur the cost of replacing them when they wear out.

Monday, March 04, 2019

Seniors: Think Twice Before Leasing a Car - by Earl Stewart

Leasing a new vehicle is very different from renting. When you sign a 36-month or 48-month lease, you obligate yourself for 36 or 48 monthly payments, even if you can no longer drive. You’re also responsible for maintaining insurance on the leased vehicle, even if it’s not being driven. You may become incapacitated or your driver’s license can be revoked. If you die, your estate is obligated for the remaining payments.

It’s possible to have your lease assigned to another person, but this must be approved by the leasing company. There are companies that, for a fee, specialize in finding people to assume lease payments, but these people have to have the approval of the leasing company.

You may have noticed that most new car advertising is for leasing, not buying. This is because car dealers average a much higher profit from a leased car than a purchased car. Also, the car dealer has a much better chance of keeping you as a customer if you lease. You must return the car to the dealer at the end of the lease. The car dealer and leasing company (usually the manufacturer) have monthly contact with you, because your making lease payments. Leasing companies penalize you with a “lease disposition fee” if you opt not to buy or lease another car of that make.

For all the above reasons, the car dealers and manufacturers will encourage you to lease rather than buy. Be forewarned that unscrupulous salesmen will give you bad advice to persuade you to change your mind about buying and leasing instead. They earn much higher commissions on leases, and they’re more likely to lease or sell you another car. The expression used by car salesmen when they attempt to do this is called the “Lease Flip”. The sales manager will instruct his salesman who is having difficulty making a big profit on a car purchase to “Flip her to a lease”. The salesman will try to focus your attention on the lower monthly payment of a lease and not mention the fact that you are building no equity when you lease like you do when you purchase. He won’t mention the higher cost of insurance, excess mileage charge, lease inception fee, lease disposition fee, or the charge at the end of the lease for excessive wear and tear. Some sales people will imply, or say, that you can return a lease early without any penalty. Too often your trade-in is undervalued or not valued at all on the lease contract. Lease contracts are very complicated compared to purchase contracts. There’s lots of fine print and variables that affect the total cost. The main numbers you have be aware of are the lease factor (interest rate), residual value (estimated value at the end of the lease) and the capitalized cost. The capitalized cost should reflect the fair credit for your trade-in and should represent the discounted price if you were buying the car.

With all that said, a lease can be just as good a value as a purchase, but leases are far more complicated. This gives the car dealer, manufacturer, and car salesman more of an upper hand. There’s an old joke that goes like this…” If you sit down at a poker table, look at all the other players, and can’t figure out who the sucker is…it’s probably you. Always be extra careful when you’re playing somebody else’s game.

Monday, February 25, 2019

Don't Get Spotted!

This article was run previously. I apologize to those readers who have read this before, but I feel it’s necessary to rerun columns that focus on dangers to car-buyers that are prevalent. The situation described in the next paragraph motivated me to rerun this column.

Yesterday, I received a phone call from a young man whose wife had purchased a new Tundra truck from a Toyota dealership South Florida. She traded in her old car for a down payment and financed the truck at an interest rate of 5%. She happily drove the truck home and showed it off to her friends, neighbors, and relatives. About 3 weeks later, she received a call from the salesman at the dealership telling her that her credit had been declined by the bank. She was ordered bring the truck back and that the contract would have to be rewritten. The new contract had a substantially higher interest rate, raising the total cost of the truck by thousands of dollars. When she demanded her trade in back, she was told “they couldn’t find it”. I told the husband and wife to speak to the owner or general manager of the dealership and tell them that they would hire an attorney if they refused to reverse the deal and give them their trade-in back or honor the original contract.

When you bought your last new or used vehicle, did the salesman encourage (or even insist) that you drive your vehicle home that same day? The chances are very good that he did because Florida dealers and those in most other states have a firm policy of doing this. I’ll estimate that 90% to 95% of all cars sold in Florida are “spotted” which is the slang expression dealers have for this policy. A few states, like New York, make it illegal to deliver a newly purchased car until the tag, title, and registration process have been finalized which delays the delivery for a few days. As much as you may be tempted, these are 5 reasons you should not sign the papers and drive the newly purchased vehicle home the same day you decide to buy it. Some car buyers are under the impression that there’s a 72 hour “cooling off period” mandated by law that allows you to return purchases, but this is not true when you buy a car at the dealership. It applies only if you purchase the product in your home.



(1) If you’re financing the car through the dealer, there’s a chance that your financing has not been approved based on the same terms, interest rate, and down payment you agreed to. If you bought the car on a weekend or after 5pm, most banks and credit unions are closed. Even if you bought it earlier during a weekday, it can take a day or more for a bank to do a thorough credit
investigation and approval. If your credit is later turned down or the down payment, interest rate, or terms modified, you will be faced with the embarrassing necessity of returning the car and resigning a contract that will result in you paying more money than you had agreed to.



(2) Most cars, surprisingly, are purchased on impulse with emotion overcoming logic. The 2nd largest expenditure the average person makes in their life is for their car. This decision should be made with logic, not emotion. Logic dictates that one should spend several weeks studying the pros and cons of the many different vehicles available. The Internet offers a wealth of information. Should you lease or buy? Should you buy a late model used car or a new one? Which dealer offers the lowest price? Which dealer offers the highest price for your trade-in? Which bank or credit union offers the lowest interest rates and terms and down payment acceptable to you? You should never buy a vehicle without an extensive test drive.



(3) The dealer may be insisting that you take delivery immediately because he knows that this is the best way to force your emotion to overcome your logic. When you take your new vehicle home and show it off to your friends, family, and neighbors, you’re far more likely not to change your mind. Because you’ve left your trade-in with the dealer, you’re not going to be checking prices with other dealers. Taking you out of the market by keeping your trade in has a slang term among dealers…you’ve been “de-horsed”. Taking that new car home the same day also has a slang term…you’ve been “puppy-dogged”. Have you ever gone puppy shopping with your family and brought home a warm, cute, and cuddly puppy? What are the chances you’ll return her the next day because the price was too high?



(4) A legally binding contract must have “offer and acceptance.” Taking your car home completely binds the acceptance of the contract, if you signed one, and makes it far less likely that you will be able to get out of the deal you made.



(5) Unscrupulous car dealers will spot deliver cars knowing that the lender will not approve the low interest rate, low down payment, and longer terms that you have agreed to. They’re relying on the fact that you’ll fall in love with your “new puppy” and that you’ll brag to your family, friends, and neighbors how about the low price, low interest rate, etc. that you negotiated. When you get that call from the finance manager at the dealership a few days after delivery that you must come back to “take care of a little more paperwork”, you won’t hesitate. When you get there, you find out that you have to come up with a lot higher down payment, a much higher interest rate, and tell you that you have to buy an extended warranty because “the bank requires it”. Your monthly payment goes way up and so does the dealer’s profit. The dealers have a slang expression for this too…it’s called the “yo-yo delivery”.



If you find yourself in the position of being told to return your purchase because the bank requires a higher interest, higher down payment, or shorter terms be sure that you understand that you have no obligation to sign a new contract and keep the vehicle. Your contract is null and void. There’s even an argument to be made by you and your lawyer that the first contract is valid and that you can keep the car at the original terms agreed upon. You may have signed a paper, typically referred to as a “Rescission Agreement”, which purports to require you to return the car if the bank refuses to honor the contract as written. There are financial penalties if you don’t. This was common practice with all Florida car dealers for many years but court decisions, case law, has made this a very questionable practice. I hope that this never happens to you but if it does and you decide you want to keep the car under the terms of the original finance contract, I recommend you hire a lawyer.

Monday, February 18, 2019

Car Dealer Victim Profiles


I receive a lot of emails, calls, and letters every week from victims of car dealers who were taken advantage of in buying, leasing, and servicing their cars. They mostly call to ask what they can do to get all or some of their money back. These “victims” fall into different categories:

The elderly (often widows)

The very young, usually buying their first car

Those who don’t read, write, speak or understand English well, not born in this country

The less educated.

People with no or bad credit. 

Everybody else

1. The elderly, especially widows, are the most victimized. The reasons for this are that Florida, especially South Florida, is a “retirement” state. Baby boomers and pre-baby boomers make up a disproportionately large percentage of Florida’s population. Not only that, but life expectancies have soared in recent years…81 for a woman and 76 for a man. Men usually predecease their wives. Women’s role in the American culture is a great deal different than in the 1930’s, 1940’s and 1950’s. Often, the husband was not only the breadwinner, but the decision maker in the household. Widows of that era are often buying or leasing their first car today. Men and women in their seventies, eighties, and nineties (Yes, I have a lot of customers in their nineties) aren’t as sharp as they once were. I’m 78 and I’ll be the first to admit this. In my opinion, men and women of my age, and older, are more trusting. We can’t forget the terrible disease, Alzheimer’s. Unless a court declares a person incompetent, a person with dementia can legally buy a car in Florida, and it happens all too often. Knowingly selling a car to a person with dementia is a despicable act that too many car dealers commit.

2. What chance does a teenager or a young person in his twenties have when negotiating with a car salesman and his manager to buy a car? Usually it’s the parents who call me to tell me how their son or daughter was taken advantage of. I don’t tell them this, but what I’m thinking is “Why didn’t they accompany them to the car dealership to advise them?”

3. South Florida is not only a retirement area, but it’s a haven for immigrants from Cuba, Haiti, and South and Central America. Many of these are first generation Americans who have a difficult time with English or can’t speak, read, or write English at all. These people are easy prey for unscrupulous car dealers. Can you imagine how difficult it would be for you to get a fair price on a car you were buying in a foreign country where you did not speak or understand the language?

4. Let’s face it; there are too many Americans who never had the benefit of a proper education. We have too many high school dropouts and too many high school graduates who still can’t read or write as well as they must to function in our society. Lack of a good education is one of America’s most serious problems and we’re seeing other countries like China, Japan, Germany and India pass us by in educating their children. It’s almost criminal how the educated are exploited by car dealers’ advertising and sales tactics. How many car dealers’ TV advertisements have you seen that you laugh at, knowing that they are totally untrue, “bait and switch” to lure you into the dealership? You wonder who would believe that kind of nonsense. The reason that car dealers keep running those ads is because they work.

5. There are always people with bad, marginal or no credit who must buy a car. In Florida, without an effective mass transit system, a car is virtually a necessity to get to your job or find a job, not to mention the doctor, school, or the pharmacy. People with bad credit are at the mercy of the car dealer. The main thing on these peoples’ minds is NOT how good a price or a car can I buy or how low an interest rate, but can they be financed? Knowing this, car dealers will charge whatever price and interest rate the lender will let them get away with. People with bad credit almost always pay dealers a higher profit than those with good credit.

6. Who should be held responsible for car dealers ripping off customers? For categories one through five, the answer is our regulators and our lawmakers. But for the last category, “Everybody else”, it’s themselves. Of course, it goes without saying that the car dealers who do this are responsible too. But who doesn’t know that most car dealers do business this way? Who doesn’t know that car dealers perennially rank LAST on the annual Gallup “Honesty and Ethics in Professions” poll? I recently received an email from a woman who fell in none of the first 5 categories above. She was terribly victimized by a very unethical car dealer from whom she bought two used cars on the same night. Her email asked me for advice on what she should do. Of course, the “horse was out of the barn” and this makes things more difficult. This woman did not ask for or receive a CarFax report on either used car. Nor did she take either car to her mechanic for approval. She clearly didn’t investigate the dealer for reputation. She didn’t check any sources like Consumer Reportsfor recommended used cars. She did not shop and compare prices for similar cars and the list of “did not’s” goes on. If you don’t do your due diligence when you buy a car you are equally culpable with the car dealer who took advantage of you.

At this point, I will shamelessly plug my book, Confessions of a Recovering Car Dealer. I say “shamelessly” because 100% of the proceeds from my book go to the charity, Big Dog Ranch Rescue, www.BDRR.org . You can buy this book at www.Amazon.com. It will tell you everything you need to know about how not to be ripped off by a car dealer. Or, you can read my blog articles at www.EarlOnCars.com. Or, how about tuning in my weekly radio show aired on 95.9 FM, 106.9 FM or 960 AM in North Palm Beach? It’s live talk radio from 10 am to noon Saturdays Eastern Time. You can also stream this show live onwww.Facebook.com/EarlOnCars or at www.StreamEarlOnCars.com. Call me during the show and ask any question you like.

Monday, February 11, 2019

Earl’s Suggested Word Track For No-Haggle, No-Hassle Car Buying

You can use this word track to buy a car online, via regular mail, over the telephone, or in person. I strongly recommend that you use online, but I know that some car buyers, seniors like me, are not as comfortable with buying over the Internet. Using this word track in person can work, but it will be much more difficult and take a lot longer. Only a person with very strong will, stamina, and a very thick skin should attempt face-to-face negotiation. I strongly recommend that you don’t.

1. Dear Car Salesman, “Within the next two weeks (enter your own time frame), I will be purchasing (leasing) a (fill in the specific make, year, model and optional accessories).” (You should carefully research the vehicle that you decide to purchase using all sources of information available such as Consumer Reports. You should also test drive the car to be sure it feels and drives the way you want it to. It is vital that you not change your mind during the purchasing process. If you do change your mind, you must begin all over again. Never let a car salesman change your mind for you. That is one of their favorite ways to charge you more money than you had anticipated paying.)

2. “Please quote me your lowest price on (your specific car). This price must be an out-the-door price with only state sales tax and the license tag fees paid to the state. To be sure there is no confusion, please understand that the only dollar amounts that I will pay in addition to the price you quoted are taxes and fees paid to the government. I will not pay dealer fees by any name such as electronic filing fees and tag agency fees.”

3. “I understand that my request may not be one you wish to comply with because you are concerned that I will shop and compare your price with other car dealers. Your concerns are valid because this is exactly what I will do. You may be asking yourself, ‘why should I do this if I know that my lowest price may not be low enough and that I will show it to your competitor to get an even lower price?’ My answer is quite simple; you may have only a small chance of winning my business if you do give me your lowest price, but you will have ZERO chance of winning my business if you do not, because you will never hear from me again.”

4.“I will sell my trade-in to the highest bidder, just as I will buy my new car from the lowest bidder. I will also finance my car at the lowest interest bid by a bank or credit union. If you can meet or beat other dealers and banks, I will trade my car into you and/or finance with you.”

5. “If you quote me your lowest out-the-door price and I come to your dealership to purchase my car, please don’t even think about: (A) Telling me that the car I specified was sold and that you would like to show me other cars just like it. (B) Telling me that the car I specified has some accessories/options that you installed like nitrogen in the tires, glass etch, pin stripes, floor mats, paint sealant, etc. (C) Telling me that you priced in rebates and incentives that I don’t qualify for like college graduate, military, customer loyalty, customer conquest, etc. (D) The price you quoted me is only valid if I finance my car through you. If you do any of these things, I will not only not buy from you, but I will report you to the Florida Department of Motor Vehicles, BBB, the County Office of Consumer Affairs, Florida Attorney General, and your manufacturer. “

6. “If everything goes well with no shenanigans, I will write a letter of commendation to your owner and manufacturer. I will also tell all my friends, neighbors, relatives, work associates, and club members about my wonderful experience with you and your dealership. I will also post recommendations on Google, Yelp, Instagram, Facebook, and Twitter.”

7. “The choice is yours and I hope that you see the benefits of selling me a car at the lowest price you can afford to give me. I also hope you can see the dangers of giving me a dishonest price so that you can get me into your dealership and try to charge me more than we agreed.”

8.  “I wish you the best of luck and I sincerely hope we can do business and have a long car buying and servicing relationship.”

If you apply this word track and do not vary from it or weaken to the car salesmen’s objections, you will buy your next new or used car for a very low price and without the haggle, hassle, and resulting anxiety and anger that you’ve experienced in the past. Good Luck.

Monday, February 04, 2019

Most Florida Car Dealers Break the Law Every Day

The following is part of Section 501.976, paragraph (16) of the Florida Deceptive and Unfair Trade Practices Act: “The advertised price of a vehicle must includeall fees or charges that the customer must pay...except “state and local taxes, tags, registration fees and title fees” …. In other words, ONLY GOVERNMENT FEES may be excluded from the advertised price of car in Florida.

I have been mystery shopping Florida car dealers every week for 14 years and I estimate more than 95% violate the law with all their vehicle advertisements.

Your reaction to this incredulous statement must be something like, “How is that possible?” Ask yourself if you’ve ever bought a car in Florida at the advertised price plus only sales tax and license and registration fees. If you dig out your paperwork and check, you’ll discover that you paid from several hundred to several thousand dollars more in hidden fees and dealer installed accessories.

Some car dealers don’t even mention the fact that they have hidden fees or dealer installed accessories on every vehicle they sell. Some will disclose in the fine print the fact that they do have a dealer fee, but they don’t mention theamount. If they do mention the amount in the fine print, this doesn’t comply with the law which says, “the advertised price must include all fees or charges the customer must pay, except government fees”.

Florida regulators are primarily responsible for letting this law be flagrantly broken by virtually every car dealer in Florida. The Florida Attorney General’s office know this is going on, but refuses to do anything about it. The last time I asked the Attorney General why they took no action, I was told that they receive very few consumer complaints. This doesn’t surprise me because this law has been violated and ignored for so many years that most car buyers don’t even know that hidden fees are illegal. I also must add that car dealers and their lobbying association, Florida Auto Dealers Associations (FADA) have strongly supported the election of every Florida Attorney General.

You would think that public awareness through the media, the fourth estate of government, would rally public outcry and eventually get the attention of the Attorney General…not so. Local auto dealers are among the biggest advertisers on radio, TV, and newspapers. If a local radio station, TV channel, or newspaper says something bad about a local car dealer, the loss of that advertising revenue could seriously affect their bottom-line. When was the last time you saw, heard, or read a negative story about a local car dealer? I never have, and I’ve been a car dealer in Florida for 50+ years.

With the rapid switch from newspaper, TV and radio to digital…Facebook, Google, YouTube, Instagram, and Twitter, there’s hope for us to spread the word. Talk about your last car buying experience on your favorite digital platform. Some of these could go viral and even the Attorney General might decide to act.