Monday, August 03, 2015
Lenders who specialize in lending to those with bad credit are known as “special finance” lenders. Many of these lenders charge the dealer a large upfront fee, as much as $2,500. Legally, the dealer is not supposed to add this fee to the price of the car you buy but, in the real world, the price of the car is usually higher as the result of this fee. In addition to an upfront fee, the interest rates are very high from special finance lenders. Because they anticipate a much higher amount of repossession losses, they must make more on each transaction. Don’t automatically accept a dealer’s opinion that you must finance through such a lender. There are many conventional banks these days that loan to people with bad credit. Their interest rates are lower and they don’t charge large upfront fees.
There is much fraud in special finance lending. Credit applications are falsified to show more time on the job, higher incomes, etc. W-2 forms and check stubs are counterfeited. Buyer’s orders show accessories and equipment that do not really exist on the car. Hold checks or promissory notes are misrepresented as cash down payment. Co-signers signatures are forged. Confederates pose as employers, answering 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 of the information on that application is accurate. Be sure that you understand and agree to all parts of the transaction including down payments, accessories on the car, etc. Never be a party to falsifying information to a lender to obtain a loan. This is a criminal offense.
Advertisements aimed at people with bad credit usually exaggerate with claims like, “We finance everyone”, “Wanted, good people with bad credit”, “No credit, no problem”, and, my favorite, “No credit application refused” (it doesn’t say your loan won’t be refused, just your application). My advice is to ignore these kinds of ads and these kinds of dealers. Their strategy is to take advantage of people with bad credit who they believe will buy any car, pay any amount of interest, and any profit to the dealers as long as the dealer can get them a loan.
It is common practice in Florida to encourage the car buyer to drive the car home immediately upon signing all of the papers. In some states like New York this is not permitted until all the car has been registered with the state in the new owner’s name. The reason for this immediate delivery (commonly referred to as the “spot delivery”) is to discourage and possibly even prevent the buyer from changing his mind. Taking possession of the car is a legal consideration making the purchase more binding. I recommend that you not rush the purchase or the delivery. For one thing you want to be sure that the car is exactly the way you want it…clean inside and out, all the accessories properly installed, no dings, dents or scratches, and that you have a complete understanding of how to operate all of the features of the vehicle.
I mention the risk of the “spot delivery” in this column on buying a car with bad credit because it can be especially harmful to someone whose credit is denied after the car has been delivered. You will most likely be required to sign a “Rescission Agreement” before you drive the car home. This is a legal document which requires you to return the car if your credit is denied. You will probably be told that your credit will be approved, but sometimes the dealer is wrong. The rescission agreement will have a charge for time and mileage that you have put on the car you are driving. Usually this is a very high charge from 25 cents per mile plus $50 per day and higher. It can take weeks for a special finance lender to rule on a credit application. If your credit is denied you could owe the dealer thousands of dollars which the down payment you made might not even cover.
As frightening as all of 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.
Posted by Earl Stewart at 9:42 AM
Monday, July 27, 2015
This is the second time that the car dealers have declared war on the online company, www.TrueCar.com. The last time was in 2011 when thousands of car dealers boycotted TrueCar to force them out of business. The U.S. Justice Department investigated this for being an “Illegal Boycott” and, as far as I know, it’s still under investigation. The car dealers were joined by their state dealer associations (well financed political lobbying groups). These lobbyists pressured legislators and state attorneys general to find legal reasons to stop TrueCar from doing business in their states.
The car dealers almost won the last war by depriving TrueCar of millions of dollars in revenue (TrueCar earns $299 for every new car sold through their referrals). TrueCar was losing money and almost went bankrupt, but Scott Painter, the founder and CEO, was able to negotiate a truce with the car dealers and their political lobbying groups. TrueCar began to grow very rapidly again. They signed up dealers very quickly because they were attracting millions of car buyers. They grew to about 10,000 car dealers and are selling about 5% of all the cars sold in the USA.
You, the car buyers, love TrueCar when you experience their service. Why? Simply because they offer an honest, low price and a fast, pleasant car-buying experience. Car dealers make their money by negotiating (haggle and hassle) the highest price that they can on each customer that walks into their showrooms. You and your next door neighbor might buy the exact same car but your neighbor might pay thousands of dollars less because he was a better negotiator. In most dealerships no two people pay the same price for a car. Typically the disadvantaged in our society end up paying the highest prices which is most unfortunate because they can least afford it.
You might be wondering “If the car dealers hate TrueCar so much, why do they have 10,000 dealer members?” That’s a good question and the answer is that car dealers “see the handwriting on the wall” and know that TrueCar is the wave of the future. Only a limited number of car dealers will be signed by TrueCar and they are getting close to that limit right now. TrueCar will never sign up all of the dealers. They will sign only enough to have representation in all markets. Dealers have rushed to join TrueCar for fear they will be left out in the cold when most car buyers find out that the only sure way to get an honest, low price is through a TrueCar dealer. Most TrueCar dealers joined up because they feel they have no choice…they have too!
But, there is a hardcore group of dealers that HATE TrueCar intensely. These dealers are usually owners of a large number of dealerships or publicly held dealer groups like AutoNation. AutoNation was recently “fired” by TrueCar when they were caught cheating on the fees owned to TrueCar. AutoNation was not only cheating on payments but they were not providing the transparency in pricing promised by TrueCar. They were using TrueCar to attract customers expecting an honest, low price and then charging them more than the TrueCar price. When confronted with this, AutoNation refused to turn over their sales transaction data which would have proven TrueCar’s charges. AutoNation claimed this data was proprietary even though all other TrueCar dealers (including me) gladly provide it to TrueCar.
Car dealers that own a large number of dealerships are very wealthy; many have nets worth exceeding a HUNDRED MILLION DOLLARS. Dealership groups like AutoNation are also very flush with cash. There’s nothing plaintiffs lawyers like better than rich men and companies that are angry with, and/or feel threatened by, a competitor! Lawyers in New York and California leaped at this opportunity. Most lawyers don’t care whether their clients are right or wrong; they do care about how much money they can make. Smart plaintiffs’ lawyers ALWAYS structure their fees so that they get paid handsomely even when their client loses.
Lawyers in New York and California where TrueCar has the most dealer-partners knew a great opportunity when they saw one. Most of them were already lawyers for car dealers and knew how much their dealer clients hated TrueCar. Even though these lawyers, and likely the car dealers, knew that TrueCar was in the right and lawsuits would be judged without merit or even frivolous by the courts, they proceeded for two reasons. First, collectively, they have more cash than TrueCar and might be able to force them to settle favorably for the car dealers. Secondly, they might be able to drive down the TrueCar stock price. If they can accomplish that, other plaintiffs’ lawyers would join in the fray and file class action suits on behalf of TRUE stockholders. Their hope was that, by joining forces with the stockholder class action lawsuits, they could put TrueCar out of business. TrueCar stock plummeted and they were sued in class action suits representing the stock holders. TRUE stock has plummeted from a high of 25 to $5.99 as I write this article. The further the stock price drops, the more incentive for more shareholder suits.
This is truly a “David vs. Goliath” battle similar to what Uber is fighting against the entrenched taxi and limo companies of the world. Uber and TrueCar both provide far better, less expensive, honest services for their customers, but they are outnumbered and out financed by entrenched old ways of doing business. Change is a very difficult thing to bring about. I believe that truth, justice, and transparency will prevail for TrueCar as well as Uber.
I urge you to join the fight on the side of TrueCar the next time you buy a car. Click on www.TrueCar.com. You will be offered a platform to specify the exact car you want. You will be shown the prices for that car in your market, not just your price but the lowest prices, the highest prices and the average price. You will then be given three certified TrueCar dealers in your market and three low prices. You will be shown all extra fees that they might charge like doc fees, dealer fees and dealer installed accessories. You select the dealer of your choice and before you even visit that dealer you have an “out-the-door” price plus government fees (sales tax and tag) only. If you encounter any problem with that car dealer, you can contact TrueCar directly at 1-888-TRUECAR and they will make it right. You can also call me on my personal cell phone, 561-358-1474.
Posted by Earl Stewart at 11:04 AM
Monday, July 20, 2015
All of the wholesale books, except NADA, are based on prices of cars sold at auction. However, you must understand that those prices don’t give you an accurate price that you should expect for your trade. A car sells at an auction for the price offered by the highest bidder if the seller chooses to accept that bid. I often don’t sell my used cars to the highest bidder that week because I might get a much higher price the next week. Lots of things affect the level of prices at a car auction…the weather, holidays, bribing the auctioneer and bribing the buyers. On a cold, rainy day when few dealers show up to buy or sell cars, prices are lower as well as shortly before and after holidays. Sometimes it happens that a buyer “greases the palm“ of the auctioneer so that he “doesn’t hear” (fast gavel) the higher bid from another dealer who bids higher than the dealer who has let the auctioneer know the price at which he wants to buy the car. Sometimes the sellers pay the buyers cash under the table to bid an unrealistically high price for their car. A car doesn’t even have to go through the auction block for the owner to believe it was “sold at the auction”. Buyers and sellers can make a deal before it goes “through the block”…very cozy, only one bidder. Why would they do that? Often the buyers and sellers are employed by the dealer who actually owns the car. The used car manager or wholesale buyer employed by the dealer might pay $2,000 too much for a car if he can earn $500 cash in his pocket from the seller. His boss, the dealer, is never the wiser. Let me hasten to add that the Manheim auctions are very careful to police these kinds of shenanigans and never encourage them. However, as in every large organization (Manheim is the auto auction in the world), there are a few rotten apples.
OK, then if the books are wrong and the auctions are wrong, then surely the car dealer must know the value of my trade-in….WRONG AGAIN. I have a little “test” on used car appraisal knowledge that I administer to my sales managers from time to time. By the way, my managers are among the most knowledgeable and competent anywhere. This isn’t just my opinion but that of all of their peers in this market. My test goes like this. Without prior notice I randomly select a car from among the 100 or so that come into my service department each day. I ask each of my 8 mangers individually to appraise this car for what they think the current wholesale market value is. They keep their appraisal secret from the others and write it down on a piece of paper and hand it to me. I’ve been doing this for 30 or more years and I’ve never had a variance in appraisals of less than $3,000. Some have been greater than $10,000! The reason I do this is to remind all of my mangers of exactly what I’m explaining in this article….Nobody knows the exact value of a used car. That’s important to my managers because under appraising a used car can cost us a sale. Over appraising a used car can cost us a wholesale loss at the auto auction. Therefore we always check and recheck our appraisals and go so far as to call other dealers and even put cars on Ebay. Another good reason not to accept only one dealer’s appraisal is that dealers will often knowingly undervalue your trade-ink, especially if you’ve negotiated a very low price for your new car. The dealer vernacular for his is “stealing the trade”.
Now that we’ve established that nobody has any idea what your trade-in is worth, what does that mean to you? It means you should stop worrying about getting an accurate appraisal because there’s no such thing. However, what you should positively insist on is getting the highest appraisal. In fact, you should hope that the guy who gave you the highest appraisal was very inaccurate and made a huge mistake that will cost his dealership a large wholesale loss at the auction. You accomplish this by never accepting only the appraisal by the car dealer from whom you’re buying your next car. Before you allow him to appraise your car, you should get at least two other bids from dealers of the make of car you are buying. For example, a Ford dealer will usually appraise a Ford for more than a Honda dealer because more people wanting to buy a used Ford will shop the larger selection at a Ford dealer. Deal directly with the used car department at these other dealerships. Tell the used car manager that you need to sell your car for cash and that you’re getting two more bids from two other dealers. If you have the time to get more than two more bids it’s even better. Another good place to get a bid on your used car is from CarMax, the largest retailer of used cars in the world. They buy lots of cars directly from owners even when they don’t buy a car from CarMax. Their prices are sometimes higher than dealers will offer you.
After you determine the highest bidder, if it’s not the dealer from whom you’re buying, give him the right of last refusal. If he can match the price from his competitor, you save the sales tax on the price of your trade.
Posted by Earl Stewart at 10:00 AM
Wednesday, July 15, 2015
I need to know:
- Which Autonation dealership you purchased your vehicle
- The date of the purchase
- The make and model you purchased
- The VIN of your vehicle
- Your name
- The sale price on your buyer's order
I will need to see copies of your deal paperwork - I promise to keep your name and information private. I will only furnish it to TrueCar so they can verify the transaction with Autonation. I will not use your information for any other purpose.
If you're not sure if your dealership was an Autonation dealership, you can check here
To say ""thanks for helping out with this, I'll pay you $100. I'm limiting this to the first 100 respondents, so hurry :)
Just email me at email@example.com to get the ball rolling!
Posted by Earl Stewart at 10:23 AM
Monday, July 13, 2015
As I have said in previous columns, the best way to buy a new or used car in on the Internet. You can do your research on which car is the best to suit your needs, get guidance on what kind of price you can expect to pay, and finally get quotes from several dealerships on that specific car. However, everybody is not “Internet savvy” and if you are not, you may find it necessary to walk into a car dealership and negotiate for the lowest price.
If you are not comfortable with negotiation, the best advice I can give you is to bring someone along with you who is. Car sales people and sales managers are trained experts in negotiation. This is how they make their living. Here are some tips for you if you decide that you want to negotiate the best price on a car.
(1) If you have a trade-in, keep that separate from the negotiation. Negotiate the best price on the car you are buying and then negotiate the best price you can get for your trade-in. Don’t fall for the old “over allowance” on your trade-in ruse. This is where the dealer makes up the price of car you are buying higher so that he can make you think you are getting more for your trade-in.
(2) Never buy a car on payments alone. Always negotiate the best price you can for the car you are buying and then calculate your best payment when you have negotiated for the best interest rate.
(3) Be sure you understand how the dealer arrived at his retail price. Federal law dictates that a Monroney label be affixed to every vehicle with a manufacturer’s suggested retail price. Many dealers mark that up with another label, often referred to as a “Market Adjustment Addendum”. This markup can be several thousands of dollars.
(4) Expect the first price you are given to be substantially higher than what you can buy the car for. Sales people and sales managers are trained to “start high because you can always come down”. Don’t be afraid to offer substantially less than the initial asking price. You should look at just like the car salesman does, but the reverse…”start low because you can always go higher”. If the salesman accepts your first offer, you probably offered too much. In fact, shrewd car sales people are trained to always ask for more money, even if the offer is good one. This is because they don’t want to “scare off the customer” by telegraphing to the customer that he “left some money on the table”.
(5) If the sales person asks you for a deposit before he will begin negotiating, determine whether the deposit is refundable. Florida law requires a nonrefundable deposit be disclosed in writing on the receipt. If this is printed on your receipt, insist that this be waived in writing on your buyer’s order. If the dealer will not agree to this, be warned that he may be able to keep your deposit if you change your mind about buying the car.
(6) Be prepared for a lot of “back and forth” when the salesman takes your offer back to the manager. When you get close to finding a mutually acceptable price, the manager himself will often come to talk to you. Don’t be intimidated stick to your guns even when they tell you this is “positively, absolutely the lowest price”. Even if you think you do have the lowest price, a great strategy is to get up, walk out of the showroom, and get into your car to drive away. This will often precipitate an even better price. When you try this, the worst case scenario is that you really do drive home, but you can always return and buy the car the next day for the last price they quoted you. They may tell you that you have to buy today, but nine times out of ten that is a bluff. The only exception is when there are factory rebates and incentive expiring.
(7) The last day of the month really is a good time to buy a car. The salesman’s bonus money is maximized, the factory incentives are in effect, the managers are desperate to make their quotas, and it is the one time of the month when the buyer has the best edge in negotiation.
Caveat emptor “let the buyer beware” could have been written specifically for what you can expect when you walk into a car dealership to negotiate the best price. You are up against experts who negotiate for living. But, if you will follow my advice above, you should be able to hold your own and maybe even get a great deal.
Posted by Earl Stewart at 12:24 PM
Monday, July 06, 2015
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 principles.
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.
Posted by Earl Stewart at 9:57 AM
Monday, June 29, 2015
I’m deeply honored to be asked to speak to you this afternoon. I do a lot of public speaking at civic clubs, churches and synagogues, libraries, and chambers of commerce. I do a live radio show every week with my wife, Nancy. Normally I speak extemporaneously. I’ve never written out a speech, and I rarely even use notes. But I have to confess, addressing a group of young women and men who will graduate from high school in a few minutes “scares me to death”. And, as you can tell, I’ve written out my words and I will read them to you. I want to be sure that I say the right things and give you the best advice I possibly can because you're beginning one of the most important phases of your lives.
When I was asked to speak to you, I was naturally very flattered, but I was also surprised. I wondered why I was chosen out of all the very qualified people that would be just as honored as I to speak to you. Then it came to me that I’m a successful businessman, a car dealer that is very different from most other car dealers. Not only am I different, but I’m far more successful than most other car dealers. But the reason I'm more successful is not that I’m smarter, or that I work harder or even that I sell a better product. I do sell a good product…Toyotas, but I also outsell all of the Toyota dealers in my market.
I haven’t always been different from all other car dealers; In fact for most of my career I was just like them. I started in the automobile business in 1968, long before any of you were born, and probably before most of your parents were born. I was successful for many years doing business just like all the other car dealers. The conventional, simple formula for success of car dealers was then, and still is today: (1) Advertise whatever it takes to lure prospective customers into your dealership. (2) When they arrive, do whatever it takes to sell them a car at the highest possible profit.
Back in the day when I was just like every other car dealer, I didn’t think I was doing anything wrong. There’s a sociological phenomenon that makes many of us think we’re doing the right thing because everybody else is doing the same thing. Two extreme examples of this are Nazi Germany in the thirties and forties and the Southern USA during the slavery era.
When we were kids, almost all of us used this excuse to our parents when we were caught doing something stupid like smoking or drag racing. “But, Mom…EVERYBODY IS DOING IT!” Then your Mom would say, “If everybody jumped off a cliff would you do the same thing?”
I’m not really sure when I began to “see the light” and realize what I was doing was very wrong. It wasn’t an overnight revelation; it was more of an evolution. Twenty years ago, only one of my three sons had any interest in my business. The other two didn’t want to do what I did for a living. About that time I came very close to selling my business and retiring. Thirteen years ago my first (of five) grandchildren were born. About that same time, I married Nancy, the second marriage for us both. She loved the business and has taken an active role in it. A little over 10 years ago, I contracted colon cancer and thought I might die. These are “life changing events” in a person. My evolution from a “run of the mill” car dealer began back then. I began to “clean up my act”. I stopped my bait and switch advertising and I reformed from deceptive sales practices. My youngest son, Josh, and oldest son, Stu, joined me in the business. I remember one day my oldest son, Stu, told me that his children, my grandchildren, told him that they were proud of what he did for a living and that they would like to be car dealers one day. This had a very powerful impact on me and when I think about it today, it still brings tears to my eyes.
A funny thing happened as I began to treat my customer with more respect and integrity. My business began to improve. The customers that I sold for the first time began to come back again and again. They even told their friends and families. I was becoming more successful than I had ever been before. Suddenly it dawned on me! Being honest and respectful of others is GOOD FOR BUSINESS. Not only was I able to have my family with me, sleep better at night with a clear conscience, but I was making a lot of money.
I discussed this with my family and we decided to do what we were doing even better. Our company motto is “Kaizen” the Japanese word for “continuous improvement”. The next major step we took was to eliminate the “Dealer Fee”. The dealer fee also known by many other names like doc fee and dealer prep fee, is car dealers’ dirty little secret. It’s extra profit added to the price of a car making the customer believe it's an official state or federal fee. It’s the single most profitable component of most car dealers’ income. In my case, it amounted to about a $150,000 monthly. I was taking a huge chance by eliminating a source of profit that could literally bankrupt us. But, we agreed that if our goal was to be totally honest with our customers, the dealer fee had to go. Our profit per car did drop but the number of cars we sold increased so much as to offset the loss. Almost every car dealer in Florida and the USA, still charges a dealer fee.
Our next major step was to stop making high profits on those who could least afford to pay them, the less educated and sophisticated members of our society, and making low profits on those who are highly educated, shrewd negotiators. This is the hassle and haggle way of selling cars which is still prevalent today. For the past 3 or 4 years we have posted our lowest price on every car we sell. We encourage our customers to shop and compare our price with other dealers. Everybody pays the same price when they buy a particular car from us.
Another change we made was to offer unconditional money back guarantees on every car we sell. If a customer changes his mind for any reason, maybe they found a lower price or don’t like the color, we refund 100% of their money. No other car dealer I know of offers unconditional money back guarantees. On the contrary, most car dealers do everything they can to persuade you to take the car home the same day that you visit the dealership. “Taking delivery” is a vital component to making the car purchasing contract legally binding. It’s called a “spot delivery” by car dealers and most sell virtually all of their cars this way. You are rarely ever allowed to return the car and get your money back.
Our next change, in the spirit of Kaizen, will be to become the Amazon.com of car dealers. Very soon we will make it as easy to buy a car as it is now to buy flowers or a box of candy online. We will offer our customers the ability to choose their car, trade in their old car, and finance or pay for their car on their computer or smart phone. We will accept credit cards for a down payment or full payment and approve credit online for financing. We will send our appraisers to the customers’ homes to establish the trade-in value and we will also deliver their purchased car to their home. Our unconditional money back guarantee will take all of the risk and fear out of buying a car, even online.
I mentioned earlier that I do a lot of public speaking, just like I’m doing now. In recent years my role has changed from that of a car dealer to more of a consumer advocate. Because we’ve built the Earl Stewart brand so solidly to represent integrity to the car buyers of South Florida, I’ve moved to the “next level of trust” from a seller of Toyotas to an educator to buyers of all makes. In any business this is the highest level of trust attainable. I’m betting that you have a great amount of trust in your teachers that worked with you over the past twelve years to bring you to this great moment in your lives. Your parents also had a great deal of trust in your teachers in choosing this high school that you attended.
In addition to my weekly radio show and my regular speaking engagements, I write a weekly blog and newspaper column. I am looked upon by the local and national media as a source of candid, truthful information about the retail auto industry. I’ve been quoted by the Wall Street Journal, USA Today, CNN, Fox News, US News and World Report, Fortune Magazine, Forbes and many local medium. I’ve written a book, Confessions of a Recovering Car Dealer, that I sell on Amazon and I donate 100% of the proceeds to charity. In fact, tonight, as a graduation present to each of you, I will give you a copy of my book. Just email your address to firstname.lastname@example.org and I will mail you a copy of Confessions of a Recovering Car Dealer.
So, you might ask, what has all of this got to do with me? What it has to do with you is that I’ve shared a “secret” with you…a secret that is “hidden in plain sight”. You’re mother always told you to be a good person, "do unto others as you would have them do unto you", "never say anything about anybody else unless you have something nice to say", "honesty is the best policy", don’t be a bully, and so on. We see and hear this advice often and from an early age, but what we don’t see is the majority of people around us, friends, family, and most others, following all of this advice themselves. You can compare this to the speed limit signs on I-95. Everybody sees and understands their meaning all the time they are driving, but very few pay any attention including the Florida Highway Patrol. J
The reason that you don’t obey the speed limit is that you want to get where you’re going faster and you know that if you exceed the speed limit by just 5 or 10mph, you won’t be issued a ticket. You also notice that everybody else is exceeding the speed limit and they aren’t being ticketed either. In fact, your trip is actually smoother if you stay in the flow of traffic. If you slow down, other drivers continuously pass you and some might tailgate or even blow their horns.
But what if, counter intuitively, you discovered that, for whatever reason, you actually made better time by rigidly obeying the speed limit? Do you see where I’m going with this? I discovered, almost by accident, that all other car dealers were doing it wrong! And remember, this phenomenon isn’t confined to only car dealers. This applies to all businesses everywhere.
This is because the world is changing at warp speed. At the end of WWII, human knowledge was expanding at the rate of doubling every 25 years. Remember that in 1945 we had no computers, no Internet, and there wasn’t even any television. Today the sum total of human knowledge is doubling every 12 hours and that rate is accelerating as I speak! Today, the smart phone you hold in your hand has more computing power than was available to the President of the United States twenty years ago!
\Some of you will be going on to college next and some won't, but all of you will be looking for a job at some point. You might be tempted to take job with the company that offers or promises you the most money. You must overcome that temptation because, in the long run, very few 21st Century companies will prosper without transparency and integrity. This is because of the "knowledge explosion" I've told you about. Today's consumer is far smarter, more sophisticated, and more demanding than the consumer of just a few years ago.
My advice to you is to look for a company to work for that believes, understands, and applies the "secret" that I've shared with you this afternoon. Good companies always try to hire good people. That’s what makes them good companies. In your job interviews let them know that you strongly believe in total transparency and honesty and that you chose their company because they have that reputation. It goes without saying that a strong work ethic, high energy, and a good education are prerequisites for most jobs. But, what will make you stand out from the crowd at a good company is your ability to fit well into their culture of transparency and integrity.
Thank you for honoring me by asking me to speak to you today. Good luck and God bless.
Posted by Earl Stewart at 10:39 AM