Monday, June 27, 2022

Open Letter to Gov. Ron DeSantis


Dear Governor DeSantis,
 
You probably don’t know me, but I’m a native Floridian, born in Ft. Lauderdale in 1940. I’ve owned and operated Earl Stewart Toyota in North Palm Beach since 1975, after beginning in the car business as a Pontiac dealer in 1968. For about the last 20 years I’ve evolved into a consumer advocate for car-buyers, advising them how to buy a car in Florida without getting ripped off.
 
I became a consumer advocate for car-buyers because I came to realize that my chosen profession as a car dealer was regarded by the public as the most dishonest and unethical of all other professions. Governor, did you know that the Gallup Annual Poll on Honesty and Ethics in Professions has ranked car dealers at the bottom or next to the bottom for the past 48 years? The honesty and ethics of car dealers in our state, Florida, is the worst of all 50 states. Florida is the beast; South Florida is the “belly of the beast”.
 
Governor DeSantis, I challenge you to find one price advertisement for a new vehicle in Florida that is honest. In other words, one that allows you to buy the car for the ad price (excluding only the government fees of sales tax and license plate). If you can do this, I’ll write an apology to you and the car dealers that advertised those prices.
 
Only car dealers are allowed by Florida’s regulators to get away with this. All other retailers comply with Florida laws to advertise real prices without hidden fees or extra, undisclosed options. The two largest retailers in World, Walmart and Amazon comply. Check Florida Statute 501, section 976, actionable, unfair, or deceptive acts or practices and you’ll confirm that virtually all Florida car dealer price advertisements are illegal. They’re illegal, not only by Florida law but federal law, the FTC. The Federal Trade Commission prohibits any fine print that will serve to increase the advertised price.
 
Your Attorney General, Ashley Moody, should be acting against all car dealers violating Florida and federal laws. Other AGs in many other states are acting, including against Florida car dealers. Why do Floridians need to rely on an Attorney General from Arizona to discipline Ed Napleton, a Florida car dealer?

By the way, Governor, I’m a realist and pragmatist. I understand how politics work and I know what it takes to get elected. I have my problems with politics and politicians, but our system is the greatest on the Planet and every day I’m thankful to be an American. I think you’re missing a huge opportunity by not coming down on dishonest, unethical car dealers. Most voters’ own cars and must do business with car dealers regularly. Most voters also fear and/or despise their experience…” I’d rather have a root canal than buy a car”. If you became a champion for the car buyers of Florida and the nation, you’d garner a lot of admiration and thanks, maybe resulting in the casting of their votes for you for he next President of the United States.

Yours Truly,

Earl Stewart
The Recovering Car Dealer

*Note: This column appears in The Florida Weekly. The Hometown News, who publishes my regular column, refused to print this column, citing my references to politicians and car dealers.

Monday, June 20, 2022

Your Car is Safer to Drive after a Collision When it’s Repaired at a Certified Dealer’s Body Shop


Fewer than 1 out of 5 vehicles involved in crashes are repaired at a dealership certified by the manufacturer of that vehicle. Most insurance owned body shops and independently owned body shops will use the cheapest fenders, bumpers, roof and door panels and other crash parts to repair your car. These parts aren’t made by the manufacturer of your car and are often Imported from other countries. No other countries have as strict and safe requirements regarding the manufacturing of auto parts than the United States.
 
When your car was sold as new, it was required by the NHTSA, National Highway Traffic Safety Association, to use crash parts that have passed safety crash tests. Only original equipment manufacturer, OEM, parts are safety tested. Other non-OEM parts manufacturers and your insurance company will tell you that their parts are “certified”, but that only alludes to quality, not safety. Your insurance company does not require OEM parts because they’re more expensive and therefore insurance company owned body shops and independent body shops use mostly aftermarket, non-safety tested, crash parts.

The dealer for the manufacturer of your car can buy original equipment parts from the manufacturer for about 40% less, than a non-dealership operated body shop. Therefore, he has the motivation to use the best and safest parts to repair your car. Non-dealership body shops must buy the parts to repair your car form dealership of that make. Of course, the dealership marks up the price well above his cost. Therefore, these non-dealership body shops usually buy cheap, non-safety tested parts overseas.
 
Imagine a front-end collision at 40 mph and think how quickly and precisely your airbag must open to keep you safe. The computer that opens your airbag must “know” how fast the bumper, hood, fenders, and doors of your car will collapse to safely deploy your airbag. Deploying your airbag too soon or too late could be fatal. NHTSA testing verifies that all crash parts will collapse at a speed specified by the NHTSA. Crash parts not manufactured to these specifications can collapse too fast or too slow, causing you injury or death.
 
After a collision, most victims are anxious and upset, more likely to be vulnerable to bad advice. Don’t let this happen to you. There are a lot of entities that might “have their fingers in the pie”. That is, have “something to gain” by steering you to a specific body shop. Your insurance company probably has “preferred shops” that they’ll suggest but remember that they’re paying for the repair. The police on the scene may have a suggestion for a body shop they’re familiar with and usually know a towing company. The police’s first concern is getting the wrecked cars out of the street as quickly as possible. The towing companies often have relationships with insurance companies. They’re paid by the insurance company for towing and for storing your car on their lot.
 
Remember that you have the legal right to choose the body shop that repairs your vehicle. You should insist on your right to choose the best and safest place to repair your car. Nobody cares more about your safety and the safety of your family than you.

Monday, June 13, 2022

You Were Overcharged When You Purchased Your Leased Car


Participate in a Class Action Lawsuit to Repay You

Almost one-third of all vehicles on the road are leased. All lease contracts include an option to purchase the vehicle at a price predetermined by the leasing company.
 
Many lessees don’t know about their option to purchase at a specific price. Those who do know are usually unaware that the dealer and leasing company cannot increase the purchase option price included in the lease contract. In fact, this is common practice by almost all car dealers and the leasing companies are almost always complicit in this violation of the federal Consumer Leasing Act of 1976.
 
The violation of the law has been very common, perhaps because few people asked to exercise this option. In the past 2 ½ years, with the advent of the Covid pandemic, more people are leasing, and far more people are exercising their option to purchase. This is because the prices of all used cars have soared!

According to the U.S. Bureau of Labor Statistics, the consumer price index for used cars and truck jumped up by 40.5% from January 2021. That means that if you leased a used car in January of 2021, your purchase option price is about 40% lower that the market value. The leasing company that established the purchase option price didn’t foresee the surge in used car prices. Most people driving lease cars have several thousands of dollars in PROFIT baked into today’s market value of the car they’re driving.

Of course, auto dealers and leasing companies are very much aware of the profit opportunity in your lease cars option to purchase. They hope you don’t know about the option because they want the car for themselves. If you do know about and exercise the option, the dealers are adding thousands of dollars on top of your option price. This is illegal and a violation of the federal Consumer Leasing Act of 1976.

If you’ve already been victimized, there’s still hope that you can “be made whole” again. Public awareness is growing. WPLG, Channel 10 in Ft. Lauderdale recently reported on this crime and there are many car dealers being sued. I’ve written several articles about this, and you can access those articles at www.EarlOnCars.com.
 
You also have an opportunity to participate in a national class action suit which may be filed against Ally Financial and Ally Bank Lease Trust. If you leased Chevrolet, Buick, GMC truck, Cadillac, Jeep, Chrysler, Dodge or Mitsubishi, you probably used Ally. If you’ve been told by your car dealer that you must pay a price higher than the purchase option amount on your lease contract or if you’ve already done so, you have a cause for action.
 
A South Florida resident, Moshe Katzburg, will represent the class action, and you can join in. Email Moshe Katzburg at moshekatzburg@hotmail.com with a complete description of how you were taken advantage of…dealer’s name and information on the car you leased and the purchase option price. Describe the extra charges above the option price that the dealer insisted on. Mr. Katzburg would prefer email but will speak to you if you need to call. His cell phone number is 845-323-6143 and you may text him there also.

Monday, June 06, 2022

Punishment Should Fit the Crime... and the Criminal’s Pocket Book


Have you ever wondered why 95% of all drivers routinely exceed the speed limit? Not only do most drivers wantonly exceed most speed limits, but it’s also often dangerous if you don’t speed when everyone else is. According to Bankrate.com, the average speeding fine in most states is only $150. This cost is relatively low to the average car owner, and a driver’s odds of being the one pulled over by the police are miniscule. The result of these low, “slap-on-the-wrist” traffic fines that are rarely administered is that virtually every driver speeds and traffic deaths and injuries are very high.
 
Regular readers of this column know about the recent “slap on the wrist” given a large auto dealer group owned by Ed Napleton. The FTC settled with the Napleton group, 71 franchises in 7 states for $10 million for allegedly cheating his customers out of $70 million. That’s a “pretty good deal” for Napleton…700% return on his “investment”. Oh, and guess what? My EarlOnCars.com mystery shopper went into two of his South Florida dealerships after he was fined and learned that he’s still deceiving his customers for the same things that he settled with the FTC for!

The May 30, 2022, edition of Automotive News (the trade journal for all auto dealers and manufacturers) features an editorial entitled “Weak Fines do little to deter bad behavior”. They mentioned Chrysler Corp., now known as Stellantis, pleading guilty in the federal courthouse over fraudulent emission testing. Chrysler-Jeep-Dodge/Stellantis will pay $300 million in penalties. Now, I know that sounds like lots of money to you and me but compare this to the $2 billion that Volkswagen agreed to pay in 2017 for the same crime. The $300 Million settlement by Chrysler-Jeep/Stellantis represents “29 hours” of their North American first quarter revenue!

There is a concept in our law called “Punitive Damages”. All businesses fear this when they’re sued because the amount of the fine is left up to a jury and the amount of the fine can’t be covered by insurance. The jury is instructed by the court to take into consideration the extent of the crime and the net worth of the company or individual charged. That means that punitive damages for you or me would be far less than those for Elon Musk or Jeff Bezos for the same crime or bad behavior.
 
This principle should be incorporated into all fines and penalties. Why should a working mom, struggling to make ends meet pay the same fine as Warren Buffet? By the way, Warren Buffet, himself, says that his “secretary” pays more income tax than he does. Folks, there’s something seriously wrong without system of laws and fines.
 
As most of my regular readers know, most car dealers have been breaking the same laws on advertising and sales practices repeatedly for nearly 100 years. Their powerful lobbyists protect them from new laws to protect car-buyers, the enforcement of old laws already on the books, and minimize the fines when they are caught.

Monday, May 30, 2022

Full Disclosure & Transparency or Digital Deception & Opaqueness


Recently, a woman and a mother called into my weekly radio talk-show, "Earl on Cars”, and told us of a bad experience her young son had in purchasing a new car. He purchased a new Kia and brought it home for his mother to see. She asked him how much he’d paid for the Kia, but he was “kind of vague” about the numbers. She asked him to show her the “paperwork” from the purchase, vehicle buyer’s order and instalment sales contract. He reached into his pocket and handed her a “thumb drive”. In case you’re not familiar with a “thumb drive” (many people aren’t), it’s a device about 2” X .5” X .25” that stores digital data. You can only read this data if you insert the thumb drive into your PC (assuming your PC has a slot to do this; some don’t). This also assumes that you were savvy enough to accomplish the technical steps to insert the thumb drive in the right place and make the proper keystrokes on the PC to bring up the information. The son didn’t even own a PC and the mother didn’t know how to read the thumb drive on hers.
 
They went to the Kia dealer and learned that her son had paid $6,000 more for the new Kia than he’d been led to believe he was paying. When they both strongly objected, the sales manager told them that his son had signed the vehicle buyer’s order and installment sales contract and taken delivery of the new Kia. He told them that there’s nothing he could do because the sale was legally consummated.
 
When I first heard this on my radio show, I didn’t believe that this was a legal sales transaction because there hadn’t been FULL DISCLOSURE. Full disclosure is the most important part of contract law. It simply means that before a transaction can be legally consummated between a buyer and seller, both parties must have totally and transparently disclosed all the terms of the sale. My son, Stu Stewart, who is a member of the Earl on Cars team (along with Nancy Stewart and Rick Kearney) told me that other car dealers were also handing customers thumb drives. He said that this is all just part of the digital revolution and online buying.
 
After the radio show, I called an attorney that represents the Florida Auto Dealers Association, FADA, named Alex Kurkin. He told me, much to my chagrin and disappointment, that a thumb drive is considered full disclosure when purchasing anything, including a car. I was very surprised and disappointed.
 
There is the “letter of the law” and there’s the “spirit of the law”. In my opinion, giving a buyer a “thumb drive” violates the spirit of the law, because many people today can’t see and read what the seller has given them to describe all the terms of the transaction, especially the full out-the-door PRICE.
It's hard enough to understand all the terms and conditions of buying a car when full disclosure is in writing on paper. When the seller makes this information “invisible” on a thumb drive that can be seen only by someone who is digitally savvy about thumb drives and PC’s.
 
Humans are caught up in a whirlwind of technology unlike anything seen before in our history. With the Internet, Google, PC’s, smartphones, artificial intelligence, quantum computing, the Cloud, and the Metaverse, many humans were left behind in the twentieth century. The law must not allow these older, perhaps less educated people to be victimized (accidentally or on purpose) by car dealers or any other businesses. All buyers should be given a paper copy of all details of every purchase transaction.

Monday, May 23, 2022

WPLG, Channel 10 in Ft. Lauderdale, Upholds the Meaning of the Fourth Estate

In 2009 my wife, Nancy, and I were fortunate enough to have lunch at the Capital Grill in Washington D.C. with the famous journalist, Bob Woodward, of “Watergate” fame. We and nine other dealers were invited by Toyota as a way thanking us for our performance in sales and customer satisfaction. Bob Woodward said something at lunch that I’ve never forgotten…He told us his greatest fear affecting the USA and the world was that the media is failing to fulfill its vital role to report all the news fearlessly, completely, honestly, and ethically.

The media in America is unlike that anyplace else in the world. You might dislike the media because you don’t agree with their political leanings or their dwelling on the bad news vs. good, but there’s one thing we can say good about the American media…they can be, and are often highly critical of our political leaders, powerful companies, and most anybody they choose to target. Freedom of the press is very real and powerful in the USA. Today we talk a lot about “fake news”, exaggerated news, and focusing on the sensational and worst news. But we all know that our media is “head and shoulders” above what we see in Russia, China, and many other countries.
 
When our forefathers wrote the Declaration of Independence and our Constitution, they wanted to guarantee freedom of the press against tyrants, meaning our government and its leaders. Maybe they didn’t foresee what the elements of capitalism, which also set America apart from most other countries, would have on honesty and transparency in the media.
 
The media in America are made up of digital, print, audio, and video generating companies that are part of our capitalistic society dependent on earning a profit by selling a product or service. If a newspaper, radio station or a TV channel is to survive they need to sell advertising and/or subscriptions. This means that large advertisers wield heavy influence on the media in which they advertise, whether it be Facebook, Google, local newspapers, radio stations or TV channels.
 
I personally experienced this phenomenon a few years ago when my radio show, Earl Stewart on Cars, on Seaview radio in North Palm Beach was canceled because the local car dealers threatened to boycott advertising on the station if Seaview continued to broadcast my show on “how not to get ripped off by a car dealer.”
 
This is especially true of local media. For example, in South Florida if you turn on your TV to a broadcast channel, you’ll likely see a car dealer, lawyer, or a pharmaceutical company advertisement. Without this advertising revenue, these TV channels might go broke.
 
A couple of weeks ago, I received a call from investigative reporter, Jeff Weinsier, of WPLG, Channel 10 in Ft. Lauderdale. He’d read some of my blogs and seen some of my YouTubes on how not to be taken advantage of by car dealers and asked if I would agree to be interviewed on WPLG, Channel 10. I agreed, did so, and the TV spot aired a short time ago. The subjects were “Why are car dealerships adding extra fees to those buying out their leases and Did you pay a dealer fee when buying out your lease” If so, you’re entitled to a refund, attorney says."

I told the WPLG reporter, Jeff Weinsier, at the time of the interview, how much I respected and admired WPLG for having the courage to go after dishonest car dealers. I told him that I’d been interviewed often by reporters on this subject only to have the story quashed by the TV station or newspaper’s editors. In fact, this happened a few years ago at WPLG. I think we were both a little surprised and relieved when our interview was allowed to air.
 
If you’re driving a leased car today (about one-third of all drivers are), you can purchase your leased car back from the leasing company at the end of the lease for a very low price, thousands below the actual value. You have an option to purchase the car at the price the leasing company anticipated before the covid pandemic and resulting spike in used and new car prices. The Consumer Leasing Act of 1976 by the Federal Trade Commission guarantees that you can buy your leased car at the option price and that the dealer cannot add any additional charges to the option price. You do have to pay the state’s government fees for sales tax and license plate.
 
There are two lawyers now in the process of suing a lot of South Florida dealerships for violating the Consumer Leasing Act. Almost all car dealers are breaking this law too and if you are being victimized, you can call either of these two lawyers to help you: Joshua Feygen at 954 697-0357 or Jonathan Kane at 954 523-5123.
 
Hopefully more TV channels and other media will have the courage to follow the lead of WPLG Channel 10 in Ft. Lauderdale. Virtually every car dealer in Florida including Palm Beach county, all the way north to Duval county, Jacksonville, are violating the Consumer Leasing Act and many other laws on unfair and deceptive trade practices.

Monday, May 16, 2022

If You’re Driving a Leased Car, You May Have a “Happy Ending” Surprise




Leasing has become more and more popular, and today about a third of the cars on the road are leased. If you leased your car two or more years ago, the leasing company didn’t know what was going to happen to the price of new and used cars as the result of the COVID pandemic.
 
The main variable that determines the size of your monthly lease payment is the depreciation of the vehicle you’re leasing. The total depreciation is calculated by subtracting the estimated value of the leased car at the end of the lease from the cost of the new vehicle. To some extent, leasing companies must “look into their crystal balls” and estimate what the market value of the new car they lease you will be worth as a used car in 3 or 4 years. There are guidebooks for residual values based on historical supply and demand for different makes and models of vehicles. But these studies didn’t anticipate the Covid pandemic and resulting surge in demand and supply chain stoppage that sharply reduced supplies, especially of vehicles.

Consequently, depending on when you leased your vehicle and what make and model you leased, the actual market value may be thousands of dollars higher that your option to purchase it. Many people who lease cars never knew they have an option to purchase it at the anticipated residual value. Most people, if they did know, don’t exercise this option. People generally lease new vehicles because they like to drive a new car every 3 or 4 years and aren’t used car buyers.
 
Today, you should check the residual value of your lease that is on your lease contract. It’s not prominently displayed and will require some searching on your part. You should then compare this amount with the current market wholesale value of your leased vehicle. It’s easy to get this today because of the huge demand and low supply of used cars. All car dealers are frantically looking for and buying used cars. New companies have sprung up during the pandemic to exploit the high demand and low supply of used vehicles. Some of the new ones are www.WeBuyAnyCar.com, www.Carvana.com, and www.Vroom.com. www.CarMax.com has always been a good place to sell your used car. Include the used car lot for the dealer that sells the make you’re leasing. Get at least three bids to maximize the price you’ll get. You might be able to buy your leased car for thousands of dollars less than what you can immediately resell it for.
 
The biggest problem you’ll encounter is buying your leased car back from the leasing company at the promised option price. This is because you must go through a franchised dealer for the make of car you leased even though you’re buying it back from the leasing company. There are some leasing companies that will sell you your car back directly, but most require you go through a franchise car dealer for that make.
 
Almost without exception, the car dealer will try to add profit for himself to your purchase option price, amounting to thousands dollars. You should object strongly, check with other dealers of your make to see if they will be honest with you and call the leasing company directly. The leasing company, even if they won’t buy it directly, can direct you to a dealer who won’t take advantage of you.
 
Recently, lessees in South Florida have sued two dealers, Gunther Volkswagen, and Brickell Motors for adding profit for themselves to the purchase option prices in their lease contracts. This was reported last month by investigative reporter, Jeff Weinsier, for WPLG, Channel 10 in Ft. Lauderdale. The attorney representing the two lessees is asserting the law that states you cannot charge anything extra for an off-lease car that’s not in the initial lease agreement. The two attorneys suing these dealers are Josh Feygin and Jonathan Kane in case you have a problem with your option to purchase.
 
Thousands of unwary lessees are returning lease cars to dealers and leasing companies daily and losing the large profit opportunity, thousands of dollars, because they didn’t know or remember they have an option to purchase their lease vehicles at the end of the lease. Please spread the word if you have a friend who’s leasing.