Monday, April 16, 2018

Never Go Car Shopping Alone

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

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

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

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

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

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

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

Monday, April 09, 2018

Buying a Car When You Have Bad Credit

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

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

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

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

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

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

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

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

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

Monday, April 02, 2018

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

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

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

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

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

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

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

Monday, March 26, 2018

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


Hopefully the sales or service experience with your car dealer went well. But, too often, they don’t. Now what? The advice I give you applies to all business transactions, not just car dealerships.  

Your first step should be to communicate your complaint ASAP to the General Manager or, preferably, the owner. Be sure that you are talking to the real owner or the real general manger. A General Manager is over all employees in the entire company. A general “sales” manager is not a General Manager. If you can’t reach the owner (Many car dealerships are either publicly owned or owned by absentee owners), ask to see the General Manager. Often times the owner or General Manager is not aware of everything that goes on with all of their customers and employees. They might have new employee that should not have been hired or received inadequate training. Or, they may simply have a “rotten apple” that should not be working there. The ease and speed with which you can meet and speak to a General Manager or an owner is a pretty good measure of the integrity of the company as whole. If the owner or General Manager cares enough about her customers to allow total access, it is probably a very good place to do business. In fact, it is a good idea to find this out before you do business.  

If you cannot reach the owner or General Manager, contact the manufacturer who franchises the dealership. Car dealers have a contract with the manufacturer called a franchise agreement and this contractual agreement requires that they treat their customers with courtesy, efficiency and integrity. Most manufacturers have a customer hotline that allows you to call and register a complaint directly. The owner or General Manager of the dealership will be made aware of your complaint. As you might guess, the manufacturer has quite of bit of clout with their dealer. If a dealer does not live up to his side of the contract, his franchise could be canceled or not renewed.  

The third step I recommend, if numbers one and two don’t work, is to contact a consumer agency like The Better Business Bureau or the County Office of Consumer Affairs. These agencies will send your complaint to the dealership and request a written reply. No car dealership or business wants an unanswered complaint in the file of a governmental or private consumer agency 

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

Your last resort is to contact an attorney. I list this last because hiring an attorney just about eliminates the possibility that you can quickly, amicably and inexpensively resolve your differences with the car dealer. Be very careful which attorney you choose. Try to choose one that is primarily interested in helping you and not in generating large fees for him. Under the Florida Deceptive and Unfair Trade Practices Act, an attorney is entitled to his fees and costs from the defendant in a lawsuit if he wins. These fees can be much larger than the amount of your claim, motivating an unethical attorney to spend more time than is needed and dragging out a case to generate more fees than are necessary. This can be very dangerous for you because the car dealer’s attorney’s fees run roughly parallel to your lawyer’s and you can be held liable for those if you lose the case. However, there are honest and talented consumer advocate attorneys that will counsel with you at no charge. They will tell you whether or not you have a lawsuit you can win. If you do, the car dealer will pay your attorney’s fee. 

Hopefully you never have to resort to the final step of hiring a lawyer. In trying steps one, two, three and four try to present your complaint as concisely and politely as possible. You have every right to be angry when you are taken advantage of, but try to let your anger subside before you speak to or write to someone about your problem. We all react negatively to someone who is profane, raises his voice, or is sarcastic. Your goal of communicating and resolving your complaint is best reached by communicating clearly, politely and concisely. 

Monday, March 19, 2018

Car Dealers Exploiting the Elderly

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

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

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

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

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

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

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

Monday, March 12, 2018

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

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

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

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

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


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

Monday, March 05, 2018

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

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

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

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

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

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

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

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

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

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

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

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