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Monday, April 10, 2017

Red Flags to Watch for When Buying or Leasing a Car

The “Big Sale Event"
If you go online or turn on the TV, you will find that most car dealers in your area are having a “sale” of some kind. It may be because of a current holiday, “too large an inventory” of cars, to “reduce their taxes”, “the manager is out of town”, or some other nefarious lure. “Advertising 101” says that you should give the prospective buyer a “motive to act”. Unfortunately, it doesn’t matter whether the motive is real or not. The fact is that most car dealers do not sell their cars for less during “sales events” than they do at any other time. I point this out so that you don’t rush your buying decision. If you don’t buy a car during the tight time constraints of a phony sales event, you can negotiate just as good a price, if not better, the next day. The exceptions to this are legitimate rebates offered by the manufacturer. These often expire at the end of the month which is one reason why the “last day of the month” really can be the best time to buy a car”.

“The Price I’m giving you is only good for today."
If a salesman or sales manager tells you that, it is only a tactic to push you into buying the car. The only exception would be the expiration of a factory rebate. Once again, this is simply a tactic to push you into buying before you have a chance to do your comparative price shopping.

“Take the car home today and see how you like it."
Test-driving the car you are considering buying home can be a good thing. It will give you a lot better idea about how the car performs, etc. However, there are two reasons the car salesman offers this. One is that you must leave the vehicle you might be trading in with the car dealer. This means that you cannot shop prices with other dealers. The second reason is the psychological impact of parking that new car in your driveway where your family and neighbors can see it. The slang expression for this is “the puppy dog”. If you were to take home a little puppy from the pet store, you and your children would fall in love with her and could not return her the next day.

“You must give me a deposit before I can give you a price."
This must be one of the most insulting ways that some car salesmen have of intimidating a prospective buyer. It’s amazing how many people actually succumb to this which allows the salesman an element of control…. you can’t leave until they give you your money back. If confronted with this ultimatum, simply walk away.

“Are you ready to buy a car today?" 
Often, if you say no to this question, the salesman will tell you to come back when you are ready to buy. He will tell you to shop around and come back with your best price so that he can beat it. The salesman is afraid that, if he does give you his best price, you will go somewhere else and that salesman will beat it. Of course, that is the whole idea of competition and that is exactly what you should do. If the salesman is afraid to give you a price because his competitor will beat it, it must not be the best price!

“Make me an offer and I will take it to my manager for approval."
This is a very common tactic which you may have already encountered. It’s not unethical. It’s simply part of negotiating. I point this out so that you are fully aware that this is part of the negotiating game. Be aware, that no matter what price you offer, the manager will ask you for more money. Even if you mistakenly offered a high price that would be a very large profit for the dealer, the manager would ask you for more money. The psychology behind this is that if you suddenly accepted the offer, you may frighten the customer by thinking he had offered too much (which he would have). When you negotiate, you must be well versed on what is a good price for that car. Start out below the best price you think you can buy it for. If you cannot negotiate a price close to your best price, get up and leave. Continue this process with another car dealer.

The “really big” discount”
The other day a friend showed me direct mail advertising piece from a new car dealer with a coupon good for $2,000 discount on any car in his inventory. This is very common for online and TV ads too. Federal law requires new cars to have a price sticker on the window named the Monroney label. A discount from this suggested retail price gives you a fair basis for comparison. Unfortunately, most car dealers today, increase the suggested retail price substantially with the use of an addendum to the Monroney sticker often referred to as a “Market Adjustment Addendum”. This “adjustment” can be several thousands of dollars. Be sure you know what the true MSRP is for the car when you have been offered a “big discount”.

The best protection from all of the above is to find a car dealer that you can trust. Ask your friends about their experiences with dealers and call the Better Business Bureau and the County Office of Consumer Affairs. I have a list of dealers that I recommend and a list to beware of that you can access online at www.GoodDealerBadDealerList.com. All things being equal choose the dealership that has been in business a long time and an owner or general manager who will make himself accessible to you and all his customers.

Monday, April 03, 2017

Fake News Is No Worse Than Fake Advertising

The media has been bombarding us for nearly a year with their pompous outrage over “fake news”. The democrats are blaming the republicans, and parties are blaming the media, and everyone is blaming the Russians.

But what about fake advertising? Where is the media’s outrage when a car dealer advertises a car to make you believe it’s brand new, but when you try to buy it, you find out, either doesn’t exist, or it’s a used car? Most of the car dealer advertisements that you see on TV, hear on the radio, view online, read in the newspaper are FAKE.

The Federal Trade Commission, FTC, has regulation that requires the advertiser to display any fact that changes the price or payment of an advertised product in a clear and conspicuous fashion. The FTC says that this means it must be portrayed adjacent to the advertised price or payment and in as big letters. The next time you’re watching a car advertisement on TV, try to read the fine print. You’ll be lucky if you even notice it because it’s flashed on the screen for only a second or two, and the print is so small you couldn’t read it even if it stayed on the screen for 30 seconds.

The only reason I know what is being disclaimed in the fine print is because I’ve gone to the trouble of standing within inches of my TV screen with a high-resolution camera and taking a picture of the fine print which I then enlarge. This is how I discover the “$5,000 down payment” required for the low monthly payment advertised in large print along with the loud audio. I see $999.95 dealer fees, $398 electronic filing fees, $149 doc fees, $79.50 tag agency fees, etc. These “fees” are disguised, hidden profit to the dealer.

Another common deceit hidden in the fine print are price “qualifiers” that are impossible for the buyer to have. Most common are rebates named military, college graduate, conquest, and loyalty. Military means that you must be on active duty in the military. College graduate means that you must have graduated from a 4-year accredited college within the last 6 months. Conquest means that you must own or lease car which is not the same make as the car you’re looking at. Loyalty means that you must drive a car that is NOT the same make. These rebates, totaling over $1,000, are deducted from the advertised price.

What I’ve disclosed to you is just the tip of the iceberg when it comes to car dealers’ deceptive advertising. Why, you ask, does the media allow these advertisements to run? You probably know the answer before I tell you…M O N E Y. Car dealer advertising and car manufacturer advertising are two of the media’s largest sources of revenue.

Maybe IBM’s Watson could calculate how many billions of dollars are stolen from consumers in this country annually by fake advertising. All of our politicians are talking about lowering taxes, repatriating overseas money, and cutting costly regulations (we have plenty of regulations against false advertising but no enforcement).

I would like to see a politician run on the platform that she or he would stop fake advertising. He could do this largely by enforcing the laws and regulation we already have on the books. I would recommend one more law. Make it illegal for the media to run an advertisement that violated federal, state, or local laws.

Monday, March 27, 2017

Don't Get Spotted!

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, March 20, 2017

What is the True Cost of a New Car?

One of the most common questions I’m asked during the Q&A at public speaking engagements is, “How can I calculate the real cost of the new car I want to buy?”.

Unfortunately, my answer is always that It is almost impossible for you to determine the true cost of a new car. This might sound crazy, but many dealers don’t know the true cost of their cars. The manufacturers and distributors invoice their dealers for an amount when they ship them a car that is almost always several hundreds of dollars more than the true cost. It’s fair to say that in virtually every case the “invoice” for a new car is much higher than the true cost. By true cost, I am referring to cost as defined by GAAP, generally accepted accounting principals. You probably have heard about “holdback”. That is an amount of money added into the invoice of a car ranging from 1% to 3% of the MSRP which is returned to the dealer after he has paid the invoice. Some manufacturers include the cost of regional advertising in the invoice which offsets the dealer’s advertising costs.

Another fairly common charge included in invoices is “floor plan assistance”. This goes to offset the dealer’s cost of financing the new cars in his inventory. Another is “PDI” or pre-delivery expense which reimbursed the dealer for preparing the car for delivery to you. I could name several more, depending on the manufacturer or distributor. Some of these monies that are returned to the dealer are not shown as profit on his financial statement and some are. Technically a dealer could say that the cost he showed you reflected all of the profit (by definition of his financial statement), but the fact would remain that more money would come to back to him after he sold you the car. To me, that’s called profit. Besides holdbacks and reimbursements for expenses, you must contend with customer and dealer incentives when trying to figure out the cost of that new car. You will probably be aware of the customer incentives, but not the dealer incentives. Most dealers prefer and lobby the manufacturers for dealer rather than customer incentives just for that reason. Also, performance incentives are paid to dealers for selling a certain number of cars during a given time frame. These usually expire at the end of a month and are one reason why it really is smart to buy a new car on the last day of the month. Last but not least, remember the “dealer fee”, “dealer prep fee”, “doc fee”, “dealer inspection fee”, etc. which is added to the price you were quoted by the salesman.. It is printed on the buyer’s order and is lumped into the real fees such as Florida sales tax and tag and registration fees. Most dealers in Florida (it is illegal in many states) charge this fee which ranges from $500 to $1,000. If you are making your buying decision on your perceived cost of the car, even if you were right, here is up to $1,000 more in profit to the dealer. Hopefully you can now understand why it is virtually impossible to precisely know the cost of the new car you are contemplating buying. Most often the salesman and sales manager is not completely versed on the cost either. Checking the cost on a good Internet site like www.kbb.com or www.edmunds.com is about the best you can do. Consumer Reports is another good source. One reason that Internet sites don’t always have the right invoice price is that different distributors for cars invoice their dealers at different prices.

Do not make a decision to buy a car because the dealer has agreed to sell it to you for “X dollars above his cost/invoice”. This statement is virtually meaningless. As I have advised you in an earlier column, you can only be assured of getting the best price by shopping several dealers for the exact same car and getting an “out the door” price plus tax and tag only.

Monday, February 27, 2017

YOUR INSURANCE COMPANY HATES EARL STEWART TOYOTA’S BODY SHOP

This article was written by Alan Nappier, my Body Shop manager. I’ve owned and operated body shops for over four decades…at one time I owned five! I’ve never had a body shop manager as qualified as Alan and never had one that put the customer first 100% of the time the way Alan does. By putting the customer first, I mean considering the customers’ needs above those of the insurance company that pays us for repairing the customer’s car. Please read what Alan has to say carefully:

So, you had an accident and called your insurance company to report it and things seemed to be going pretty smoothly…. Then you told them you were taking your car to Earl Stewart and everything started getting weird…. The claims adjusters’ demeanor inexplicably just changed…. And NOT for the better!! Suddenly they’re telling you they that have a perfect shop in mind for you that will get your car in and out in a hurry and the whole process will be effortless for you. Yep, it’ll be such a great experience, you’ll be GLAD you had an accident. You thank them politely and tell them you’re just more comfortable repairing your vehicle at Earl Stewart, where you bought the car and know and trust the people.

Now it seems like the adjuster is downright angry with you and the real pressure tactics start!! They start making vague yet ominous sounding statements about Earl Stewart Toyota, almost as if they’re letting you in on a dirty little secret….. “We can’t guarantee their work….” “We’ve had problems with that shop….” “They charge more than we allow for repairs and you will have to pay out of pocket…” “If you take it to our shop, you won’t have to wait for an adjuster…” “They ignore our estimates…” The list goes on and on, but, they’re planting their seeds of doubt…. And now you’re concerned and thinking “Earl Stewart Toyota must have done something to cause this hostility by my insurance company…”, after all, your insurance company only has your best interest in mind…..

Well, you’re right, we DID do something to cause your insurance company to hate us and I’d like to tell you what….. We actually had the audacity to tell your insurance company something that they’re not used to hearing…. “NO!!” and they reacted like any spoiled 3 year old would who’s never heard the word before.

But wait, you’re still “in good hands” right? Wrong!! Your insurance company will instruct “their” repair facility to install untested aftermarket crash parts on your vehicle, even knowing that these parts can absorb crash energy differently and affect the timing of your air bag deployment, resulting in possible death and serious injury.

Here’s the really crazy thing…. The insurance company’s “approved” repair shop will do it!! Do you see what’s going on here? Everybody’s making out like Jesse James!! The insurance company is saving money, the body shop is making money, and you? You’re getting scammed!! Your insurance company has been provided with countless documents, provided by the vehicle manufacturers that state that these “cosmetic crash parts” are actually “designed and tested as part of the overall vehicle and may help send impact energy to the SRS sensors. In addition, some of these parts may help GM, Chrysler, Ford, Toyota, for Nissan vehicles comply with several Federal Motor Vehicle Safety Standards (FMVSS) including hood intrusion in the passenger cabin, preservation of proper door operation following a collision and proper airbag function.

You may be thinking “Well, if these parts are that bad, surely there’s a law against using them without my permission…” You’re right again!! Florida statute 626.9743 states “An insurer may not require the use of replacement parts in the repair of a motor vehicle which are not at least equivalent in kind and quality to the damaged parts prior to the loss in terms of fit, appearance, and performance.” Sounds like an open and shut case, eh? The law doesn’t say “if the insurance company believes they’re the equivalent”. It doesn’t say anything about “if the insurance company hopes they’re the equivalent”. The insurance companies need to prove these cheap parts are the exact equivalent to the original factory parts to be in compliance with the law or stop mandating their use. Right? I thought so too….

So, I wrote a letter to the Florida Office of Insurance Regulation!! Went right to the top, straight to Commissioner Kevin McCarty (well, his office anyway…. he’s got “people” for that…). After much arm twisting via the Florida CFO’s office, the FLOIR begrudging agreed to “investigate” our concerns. After a couple of months, we received their response “We have concluded our investigation and found no violation of the Florida Insurance Code.”, and my favorite part….“Generally speaking, the burden of proof that an aftermarket part is not of like kind and quality or as safe as an OEM part rests with the one making that assertion, as opposed to one having to prove that the aftermarket part is of like kind and quality and as safe as OEM.” Huh?? That one left me scratching my head. Why have a consumer protection law at all then? Your insurance company can mandate the usage of any part they desire, so long as it looks the same. Nobody really complains though because, as they say, “dead men tell no tales…”The jury’s still out on this one, but rest assured WE WILL NOT USE AFTERMARKET PARTS TO REPAIR YOUR VEHICLE.! (p.s. Also check out Title 49, Chapter 301 Subchapter II Sec. 30122 "Making Safety Devices and Elements Inoperative" in the Federal Code-you can Google it).

How about used crash parts then?? Your insurance estimator will tell you “they’re factory original parts taken off of a car that’s just like yours”. Really? Was your car damaged so severely that it was deemed a total loss and ended up in a junk yard? The car they want to cannibalize to get your replacement parts was. We won’t even know if the donor car was damaged in an accident, a flood or even a fire and quite frankly, we don’t care-WE’RE NOT GOING TO USE THESE PARTS EITHER!!

Well, what about Earl Stewart overcharging for labor??? THAT sounds pretty shady….. let’s talk about it…. I recently had my lawn mower repaired and it cost me $65 per hour and having an electrician fix my air conditioning at home cost me $75 per hour (plus gas & travel time), plumbers and a/c repairmen are $100+ per hour. If you have mechanical work on your car, it’s liable to cost you anywhere from $100 to $200+ per hour, depending on the repair shop and type of car.

The insurance companies feel that $42 an hour is more than fair to have your collision damaged vehicle repaired and they won’t pay a dime more. If you want to repair your vehicle here, they will tell you that you’ll have to pay the difference out of pocket OR, well….. they know a guy…… Ironically, back in the early 70’s, when Allstate and Sears were all part of the same company, Sears wouldn’t repair your toaster for less than $12 an hour while at the same time Allstate wouldn’t pay more than $7 an hour to have your vehicle repaired. Hilarious, ain’t it? Back in the 60’s, the insurance industry running roughshod over the repair industry was so pervasive and blatant that the Kennedy Administration tackled them before they even got started on the Mafia!!! (see 1963 Consent Decree-Google is your friend) What the insurance industry is doing to the repair industry is a clear violation of antitrust laws and we are part of a class action lawsuit to try to put a stop to it. WE WILL NOT MAKE YOU PAY THE DIFFERENCE IN LABOR RATES!!

Then we get to “charging for supplies and labor operations not customarily charged for in the market area”. This basically means that because they’ve been able to badger, coerce and intimidate some repair shops into not charging for certain supplies and labor operations necessary to return your car to pre-accident condition, they should not have to pay it to anybody whether they ask for it or not. Your insurance company won’t dispute that the materials are being used or the labor operations performed, nor will they dispute the necessity. Their only problem is having to pay for it because at some point, long ago, somebody “cut a deal” to get more business sent their way and it then became the “new norm” for every shop. We will never charge for a labor operation or supplies that cannot be verified. WE WILL NOT MAKE YOU PAY THE DIFFERENCE.

Now you’re probably saying “I never get into accidents so I can’t believe I’m still reading this. Can this guy just get to the point??” and the answer is “YES! Yes I can!!” Please don’t fall victim to your insurance companies scare tactics! The top 5 insurance companies spent over $4,000,000,000 (yep, that’s $4 BILLION) last year to convince you that they’re good guys so that you will buy their product (GEICO alone spent over $1 Billion if that tells you anything). Sometimes, there’s not enough perfume to cover up a smell and not enough lipstick to pretty up a pig and this is one of those times.

Please go to some consumer websites and check out how these insurance companies perform once you’ve had to turn in a claim (a.k.a. became an expense to them). Also keep in mind, the shops that enter into these unholy alliances with the insurance companies see them as their #1 priority and best customer and they will do whatever they are told to stay in their good graces. The insurance company feeds the shop lots of work and the shop does what they’re told to keep the repair cheap. It’s a marriage made in Hell. The repair shops that participate in this fraud are just as, or maybe even guiltier than the insurance companies. They should know better, but, it’s all about the money (insert photo of pigs at trough HERE) ;)

If you have already had your vehicle repaired at one of these direct repair shops and you’re not exactly sure how your car was repaired, bring it by with the invoice and the final estimate and we’ll be glad to take a look at it for you. If the vehicle has not been repaired properly, we’ll point out the deficiencies so that you can return to the shop for corrective repairs. If they repaired your car with aftermarket or junkyard parts, you may be entitled to higher than normal diminished value compensation. WHAT?? Your insurance company didn’t tell you that your car is worth less now and you’re entitled to additional compensation?? You might want to contact Gordon and Doner, they have a division that can handle that for you. If your insurance company has pressured you to not have your car repaired at Earl Stewart Toyota, please email me the details at alann@estoyota.com or Mr. Stewart at earl@estoyota.com and share the gory details.

Earl Stewart Toyota will repair your vehicle properly, per the manufacturers’ recommendations and only with new OEM crash parts. We will guarantee our paint, our workmanship AND the OEM replacement crash parts, for as long as you own your car. That’s right, I said AND THE PARTS!! The manufacturers’ warranty for replacement parts is 12 months or 12K miles. Earl Stewart Toyota will pick up the warranty after Toyota’s warranty expires, this includes parts, materials and any necessary labor to paint and install the failed part. Everything!! If we are unable to convince your insurance company to pay in full for the properly repaired property damage, with your written permission we will initiate action on your behalf to recover the funds. Ultimately, it is YOU who are responsible for ensuring your vehicle is repaired properly. You already had an accident; don’t let your insurance company force you into making a mistake.

Monday, February 20, 2017

Earl’s Good & Bad Car Dealer Lists



I must explain that those dealers listed as “Good Guys” are far from perfect. I urge you to shop and compare prices, stick up for your rights, and do your homework in preparing to buy. South Florida is the “Sodom and Gomorrah” of the retail car business. Listing the best dealers is like listing the most honest inmates in Attica or Leavenworth.

I arrived at my evaluations of these dealers by my weekly mystery shopping reports that I’ve conducted for more than 7 years. I also gather data from my constant interaction with you, the car buyers of South Florida. You call my weekly Tuesday afternoon talk show, “Earl Stewart on Cars” (stream it live at www.StreamEarlOnCars.com 4-6 PM), my cell phone, and text me, you send me emails, and you write me letters about your experiences in buying and servicing your cars. You post comments on my blog,www.EarlStewartOnCars.com.

This list is not static and I update it regularly, adding more “good guys” and dropping the undeserving from the list. Hopefully, I will not have to add to the “bad buy” list very often, but I will if I have to. These dealerships are the worst of the worst and should be totally avoided at all costs. You would be better served to drive an extra 50 miles to buy the make car you seek than buy it from one of these dealers. In fact, you would be better served to buy a different make from a good dealer.

I know I’ve angered a lot of car dealers (so what else is new?) by leaving them off the “good guy” list and especially the bad guys. I urge those of you who are sincere to call me personally and I will be glad to discuss with you what your customers told me about you that led me to omit you from the “good guy” lists. The “bad guys” won’t call me because they know exactly what they are doing and how they are premeditatedly deceiving their customers.

If the make car you are seeking does not show a dealer, it’s probably because not many people buy that make. I listed only the most popular. I suggest that you choose a dealer a “good dealer” who is listed that also sells your make. For example, Schumacher also sells Mitsubishi and Infiniti and he is listed as a good dealer for Chevy and Buick.

Monday, February 13, 2017

BUY YOUR NEXT CAR THROUGH COSTCO

There are lots of third-party new car buying programs out there but the Costco auto-buying program will give you the lowest price and the best protection from car dealers’ efforts to increase the price by dealer fees and dealer-installed options.

My second choice is TrueCar, www.TrueCar.com. My first choice used to be TrueCar, but several auto manufacturers including Toyota and Honda, have recently began requiring their dealers to increase the MINIMUM ADVERTISED PRICE for all the cars they advertise and sell. These manufacturers consider TrueCar dealers that share their best price with TrueCar, to be “advertising” their price. Thus you will no longer find a TrueCar dealer’s lowest price displayed on the TrueCar website. In my opinion, this is a bad thing for the car buyer because it has the net effect of raising the price you pay for your new car.

Unfortunately, Costco requires an annual membership fee, but this fee is nominal, $55, in comparison to the large savings you realize from buying, not only cars, but all of their products. I’ve been a member of Costco for over 20 years and I can promise you that you will save thousands of dollars a year by shopping there. There’s another problem with buying from Costco and that is there may not be a location near you. My answer to that is that you can still buy from them online, www.Costco.com and, if even if you have to drive 20 or 30 miles, you’ll find out that the savings justify your time and gas expense.

The only real problems with the Costco Auto Buying program are not from Costco, but from their car dealers. You probably have had bad experiences buying or leasing cars from car dealers and this is why you’re reading this article. You’re not alone, the Gallup Organization has been conducting an annual opinion poll on Honest and Ethics in Professions for the past 36 years. Last year (2016) car dealers ranked next to last, just above Congressmen. Car dealers have been at the bottom or near the bottom of this list for every one of the past 36 annual surveys. Even though Costco selected their car dealers in good faith and required them to sign a contract obligating them to give you their best price (the price must be lower than the price they sell to anybody else except a Costco member), does not mean that you will get that price UNLESS YOU FOLLOW THESE THREE IMPORTANT RULES.

COSTCO AUTO BUYING RULE ONE. Visit the Costco Auto Program website, www.CostcoAuto.com. You’ll be asked to input your Costco membership card number and other information pertaining to the make and model of car you wish to purchase. From your zip code, you will be advised of the Costco approved car dealer nearest you.

COSTCO AUTO BUYING RULE TWO. You will also be advised of the names of the Costco approved sales representatives at the dealership. It is imperative that you speak to no other sales person other than those named on this list. You should print out the information sheet which includes the names of those Costco sales people that are approved and bring this to the dealership when you visit.

COSTCO AUTO BUYING RULE THREE. When you arrive at the dealership and are sure you’re dealing with the official Costco approved sales person, insist on her showing you the Costco Member-Only Price Sheet which shows your exclusive prearranged Costco member savings. Remember that you are entitled to applicable manufacturer rebates and incentives or special financing. You should also ask to see the manufacturer’s invoice and MSRP for the vehicle you selected so you can see how much you saved as a Costco member.

Remember that Costco rules do not allow their approved dealers to add anything to the Costco Member-Only Price except GOVERNMENT FEES…namely sales tax and the actual cost of the rag and registration paid to the state of Florida. If a Costco dealer tries to add anything else, do not buy the car and report them to Costco. Be especially wary of dealer or port installed accessories like nitrogen in tires, LoJack, protection packages like Toyoguard, floor mats, pin stripes, etc. Also, pay no dealer fees which often carry different names like electronic filing fee, tag agency fee, dealer prep fee, doc fee, notary fee, etc.

If the Costco dealer attempts any of these shenanigans, report him to Costco immediately. If the dealer refuses to make things right, Costco will cancel him as an approved dealership.