Demand an “Out-the-Door” Price Plus GOVERNMENT Fees Only

A car dealership, or any business, is entitled to charge any price for their product they want. This is what the free enterprise system is all about. Prices by the sellers should be decided by what the buyers are willing to pay. All too often, manufacturers endeavor to influence or even control the retail price of their sellers. Sellers that are monopolies or near monopolies like Florida Power & Light and Comcast can also defeat the free enterprise system too. However, the most common threat to the consumers’ right to choose the best price is deceptive advertising by the retailers.

Car dealers lead the charge in the category of deceptive advertising. This is not “just a few car” dealers as their manufacturers and dealer associations want you to believe, but is sadly true for the majority of car dealers. If you doubt I’m right about this, just click on http://www.gallup.com/poll/1654/honesty-ethics-professions.aspx. This is the Gallup annual poll on Honesty and Ethics in Professions. This poll has been conducted for over thirty years and car dealers have been ranked at or near last for every year, including last year.

There is only one surefire way to get an honest and low price from a car dealer. This is by COMPETITIVE SHOPPING. This sounds simple but it’s not. Car dealers will do everything they can to prevent you from comparing their price. Their advertised prices are almost always lower than the actual price. When you ask for a price by phone, email, or in person, they will usually refuse to give you a firm price unless you commit to buy “today”.

You must insist that they give you their best price. I have a recommended “word track” for you that almost always work. “I know you don’t want to give me your best, out-the-door price because you don’t want me to shop your price with your competition. This is understandable. But also please understand that if you refuse to give me your best price, you have ZERO chance of selling me a car. This is because I will leave your dealership and never return. It’s true that, if you give me your best price, I will shop it with your competition and you will have less of a chance to sell me a car. But less of a chance is far better than ‘no chance’. The decision is yours.”

Follow this procedure with three car dealers and be sure to compare the exact same year-make-model with identical accessories. This car will have the identical MSRP on the factory sticker at each dealership you shop. Be forewarned that the car dealers will do everything they can to SWITCH you to a different car. You must remain firm on the exact car you originally chose. You must compare “apples and apples”; otherwise you will be tricked into paying the dealer more profit.

There’s a simple way to communicate to the dealer what you mean by an out-the-door price. Tell him that in addition to the quoted price you will pay extra only for GOVERNMENT fees. These are fees that do not go in the dealer’s pocket but go directly to the state or local government. These are simply sales tax and the actual cost of the license tag and registration. Dealers try to confuse you by adding extra charges, often with the word “fee” included in the same. Examples are dealer fee, doc fee, notary fee, electronic (or “e”) filing fee, tag agency fee, service fee, administration fee, billing and handling fee, and on and on.

If the car dealer tells you that he must charge these fees, explain that if he insists on charging them, you want them included in your out-the-door price. These charges are not really fees, but they are added profit to the dealer or reimbursement to the dealer for non-government expenses (the exact same thing as added profit) that should be included in the price of the car.

The second big trick most car dealers use is DEALER INSTALLED accessories. These cheap, over-priced accessories like (nitrogen in the tires or paint protections) are always excluded from the advertised price and even the verbally quoted price. Sometimes the dealers will tell you that you must buy their installed accessories because they are pre-installed on all of their cars. Tell them that anything they must include in their price you want to know upfront so that you can shop and compare their best price with their competition.

Once you’ve chosen the lowest out-the-door price by shopping at least three car dealerships, be sure to keep the transactions for your trade-in and financing separate from the car purchase. You do this by shopping the value of your trade-in with at least 3 used car lots from dealerships that sell your make car. You shop your financing by checking with your bank and/or credit union. As a final check on the best price of your car click on www.TrueCar.com. At no cost, they will provide you with the lowest price from three dealers in your market for the car of your choice

GO VIRAL!

If you’re like me and can’t understand why our federal and state governments don’t pass a law making it illegal to sell a car with defective airbags that can explode in your face killing and/or maiming you or a loved one, help us make this petition go viral.  

You see in the news every day that millions more vehicles equipped with Takata airbags are being recalled. Auto manufacturers cannot obtain safe airbags fast enough to fix the over 100 million vehicles that are already on our highways, and are actually knowingly building new cars with the very same unsafe airbags.  

Did you know that federal law makes it illegal for a car dealer or other company to rent you a car with a defective airbag, but the very same car dealer or rental company can legally SELL you the same car without disclosing the fact that it has a dangerous airbag? As you know, Hertz, Avis, Enterprise and most rental companies and car dealers retail their rental cars after they stop renting them. Are they taking the cars out of their rental fleets that are illegal to rent, and selling them to the public instead? 

Anna Werner is a well-known reporter for CBS national news, and she recently conducted several undercover mystery shops of car dealerships. The mystery shopper pretended to be interested in buying a used car that had been predetermined to have an unrepaired dangerous Takata airbag. This was aired a few weeks ago on the CBS news and in no case did the salesman disclose this fact. When I saw this on TV, I mystery shopped TWENTY-FOUR car dealerships in South Florida. In four cases I sent mystery shopper physically into the dealerships and in twenty others my mystery shopper called the dealer on the phone. In 23 out 24 mystery shops the sales people denied the truth that the car had an unsafe airbag. The sales people were asked specifically if there was any unfixed safety recall on the car the mystery shopper was buying. Only one car dealer told the truth…Mullinax Ford in North Palm Beach.  

The manufacturers, car dealers, and the National Highway Traffic Safety Association (NHTSA) know that only ONE IN FOUR SAFETY RECALLS IS EVER REPAIRED! Tens of millions of used cars are being sold with unfixed dangerous safety recalls. For every new car sold in the US, there are 2.5 used cars sold. Last year there were over 17 million new cars sold but there were over 40 million used cars sold. Three out of four of those used cars with safety recalls have not been repaired. As I write this column, there are hundreds of unsuspecting used car buyers buying a used car with a dangerous safety recall.  

For all of the above reasons I implore you to, not only sign this petition, www.AirbagRecallPetition.com, but to tell your friends, family, work associates and anybody else who will listen. Please put this on your Facebook page, Twitter, Instagram, Snap Chat, YouTube and email it to everyone you know. If you have access to anyone in Florida’s legislature, especially the governor’s office please let your voice be heard.  

  

Best, 

Earl 

The War between Insurance Companies and Body Shops

(That You Never Knew Was Being Waged)

I’ve written other articles about how insurance companies try to fix your car as cheaply as they can without showing the necessary concern for the quality and safety of the repairs. You can find them on this blog, “Collision Insurance and Your Rights” and “Coping with Body Shops and Insurance Companies”.

This new article was written by Alan Nappier, my body shop manager at Earl Stewart Toyota. Alan is, not only the best body shop manager I’ve employed in my 47 years as a car dealer, but one of the smartest, most articulate people I know. I’ll probably sound like I’m overdoing it but he also has an incredible sense of humor. I say all this so that when you read what he has to say below, please take it as the gospel. Alan is not a “smoke blower” or an exaggerator. He tells it like it is. You can ask Alan a question about repairing your car and your insurance company any Tuesday afternoon between 4 and 6. He appears on my live radio talk show, “Earl Stewart on Cars” on 900 AM, The Talk of the Palm Beaches. You can also stream this show live at www.StreamEarlOnCars.com.

Your body shop is either at war with the insurance companies or they fight on their side. If your body shop is not fighting for you to protect your car from cheap, poor quality, and unsafe repairs you’re in a “heap of trouble”. The chances are that if your body shop is on your insurance company’s “approved repairer list” that its loyalty is not to you but to that insurance company. You should take your car to the body shop that you know and trust will fix your car with your interests paramount in their mind, not one who must “play ball” with your insurance company or lose their membership on the “approved repairer list”. One way to find out whose side your body shop is on is to ask them if they will be asking you to sign two forms. One is called a “Limited Power of Attorney” and the second is called an “Assignment of Proceeds”. Please read on and Alan will explain very clearly why this is so.

By Alan Nappier:

Getting an insurance company to “approve” proper repairs to a collision damaged automobile is the toughest part of the collision repair industry. First of all, in a legal sense, the insurance company really has no right to dictate or blueprint a repair process. Their responsibility to the customer is to pay for property damage, NOT determine HOW the vehicle is to be repaired. The insurance company makes money by taking in premiums and investing these premiums. Any damage claim payouts are EXPENSES and like any company, controlling expenses is a top priority. This creates a conflict of interest when the insurance company is allowed to participate in the repair process. Contrary to popular belief, insurance companies DO NOT look out for YOUR best interests; they look out for their OWN best interest. This scenario leads to an adversarial relationship between insurance companies and HONEST repair facilities. Dishonest or unethical repair facilities view the insurance company as their customer and you as a product. They will repair your vehicle however the insurance company instructs, regardless of quality or the resulting structural integrity of the automobile. They want to keep the insurance company happy so that they may keep getting business referred to them. It’s a great arrangement for everybody EXCEPT the vehicle owner. An ethical body shop will repair your vehicle properly REGARDLESS of the insurance companies’ suggestions otherwise. In the past, we would have to just “absorb” the difference between what the insurance company “allowed” and what it REALLY cost to repair your car.

Enter now a powerful couple of legal documents called the “Limited Power of Attorney” (POA) and the “Assignment of Proceeds” (AOP). The POA is exactly what it says it is. It gives the repair facility the power to initiate legal action or collection efforts on your behalf. No, we can’t steal your house or take over your bank account, the LIMITED POA is specific to the insurance claim[Symbol] Remember, in a legal sense, the shop has NO legal connection with, or obligation to, the insurance company. Our contract (signed repair order) and responsibility is with YOU, the vehicle owner. Therefore, YOU are still financially obligated for the monetary difference between what the company allowed and the true cost of the repair. A POA allows me to repair the car properly, deliver the finished product to you and then begin collection efforts on your behalf. Odds are, you’ll never hear about the claim again.

The AOP is actually a document that “assigns” your contractual arrangement with the insurance company to the repair facility which then gives us legal standing to sue this insurance company directly. This “connection” must be established to allow the shop to sue for “breach of contract”. When an insurance company fails to adequately compensate for property damage, they have breached their contract with YOU. The AOP extends this contractual obligation to the repair facility.

With all of THAT being said, here’s the REALITY of the situation. We are most likely never going to use these documents. The power of these documents is the knowledge that they exist. Reaching an agreed repair dollar figure is a negotiation and a negotiation is a battle of wills. You don’t want to enter any “battle” without the proper weapons and knowledge. The AOP and POA are the most powerful weapons the repair facility has available to it. When confronted by a mugger with a knife, just showing the dirty no-good your gun is enough to deter further aggression and typically end an ugly situation and you walk away the victor, not with any illicit gains, but, just with what was rightfully yours to begin with. This is the EXACT same thing we use the AOP and POA for. Simply by brandishing these powerful weapons, the muggers (insurance companies in this case), recognize a losing battle and retreat. No insurance company wants to have their dirty little secrets exposed in court. They know they can’t win because the facts and truth are on our side. The end result is, these couple of signatures you gave me makes me David to the insurance companies Goliath.

Open Letter to Auto Manufacturers: Accept Your Responsibility for Takata Airbag Debacle

Dear Automobile Manufacturers,

As I write this letter, there are over 100 million vehicles on the road with defective Takata airbags. You selected Takata as the supplier for these airbags and you installed them in your vehicles. You then sold them to your dealers, and they sold them to over 100 million drivers.

Many of these airbags were installed more than a decade ago and many more are being installed today even though you know them to be dangerous. The metal inflator which contains an unstable explosive propellant, ammonium nitrate, can detonate too forcefully, causing the metal casing to explode into shrapnel, striking the car’s driver and/or passenger. There have been 10 deaths and over 100 injuries due to this in the United States, and many more worldwide.

Because Takata cannot manufacture safe airbag replacements fast enough, the drivers of your vehicles with unsafe airbags cannot have them replaced. They are faced with the dilemma of renting or buying a safe car or driving the dangerous one. Unfortunately, most can afford only the latter option. Car dealers are telling their customers that the waiting list for a safe airbag can be as long as one year.

As the manufacturer of these dangerous vehicles, you must immediately accept the responsibility for keeping their owners and drivers safe. Why? Because you should have been absolutely certain that the maker of one of the most important safety components on your vehicles, the airbag, was building a safe and reliable product. Your due diligence was clearly insufficient. Investigations have revealed that Takata has been aware of this safety problem for many years and covered up the fact that they were supplying you with millions of dangerously defective airbags every year.

You can point the finger of blame at Takata, and they certainly are guilty. However, Takata has not taken any meaningful actions whatsoever to protect the drivers of your vehicles and it’s highly unlikely that they will; their liability is so massive that they cannot afford to do so. Most industry observers believe that Takata will declare bankruptcy, or have their assets acquired absence any liability.

You must protect the drivers of your vehicles now, and take legal action against Takata to recover whatever you can!

As I write this letter, unsuspecting customers continue to buy the defective used cars you manufactured more than a decade ago. Virtually none of these have had their dangerous Takata airbags replaced. Car dealers are under no requirement to even disclose the fact that that the used cars they are selling contain a potentially lethal airbag. CBS News recently aired an exposé on this by sending mystery shoppers into several car dealerships in several different states. Their investigation revealed that no disclosure was offered to the customers. I mystery shopped twenty-four car dealerships in South Florida. I sent my mystery shopper into four and contacted twenty more by telephone. Twenty-three car dealers misrepresented the car the shoppers were buying as not having a recalled Takata airbag. I verified that the cars did, in fact, have dangerous airbags on the NHTSA website, http://www-odi.nhtsa.dot.gov/owners/SearchSafetyIssues.

This is what you must do immediately to stop the deaths and injuries in the vehicles you manufactured:

(1) Order your car dealers not to sell, or allow to be driven, any of the vehicles you manufactured with an unsafe airbag: new or used.

(2) Provide free loaner cars to all owners and drivers of the cars you built with defective airbags until safe airbags can be installed. Honda is already doing this and all manufacturers should follow their example.

(3) Compensate your dealers as well as independent used car dealers for the financial loss they experience by being unable to sell your unsafe vehicles.

(4) Immediately stop manufacturing vehicles that you know to have unsafe airbags. Although you may anticipate eventually being able to replace the faulty airbags, many of these vehicles will find their way into the used vehicle market and in the driveways of unsuspecting consumers prior to being fixed. Millions of these vehicles will never be fixed and remain on the road for years. CarFax data shows that only one in four recalls are ever fixed.

(5) Lobby federal and state governments to pass laws making it illegal to sell a used or new car with an unsafe airbag. 

Sincerely,



Earl Stewart

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

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

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

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

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

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

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

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

Good People Make Good Car Dealerships

In my columns over the years, I’ve always advocated carefully choosing the car dealership that you buy your vehicle from or allow to service it. I still believe this is important. In fact, I’ve published a list of dealers that I recommend you buy your car from and a list that I recommend you avoid.  You can access that list at www.GoodDealerBadDealerList.com.

We've all visited a restaurant or retail store and had a terrible experience with a waitress, sales person, or other employee and never returned. Yet, we’ll have friends recommending the same place that we swore never to patronize. We condemned an entire company because of one person.

I also wrote a column a couple of years ago in which I suggested that you carefully choose the individual who advises you and sells you service on your car.  These individuals are really commissioned sales people who sell you service just like car sales people sell you cars. Unfortunately most dealerships call them something else like “assistant service manager” or service advisor. As I was rereading this old column, it occurred to me that the same recommendation applies to all companies, not just car dealerships and it applies to all departments in a company.

Whichever car dealership you choose, take the time to pick and choose those individuals you deal with. Car dealerships, just like other organizations, are nothing more than the sum of their parts…their people. You should get to know the person who sells you service and, if you don’t like that individual, ask for another person to handle your service requirements. This requires a little courage because we don’t want to offend the person we originally dealt with. If this makes you uncomfortable, the second best thing is to ask the manager of the dealership to recommend their best person. Tell the manager that you would like to deal with the sales or service person that has the “highest customer satisfaction rating”.

All dealerships and auto manufacturers measure this for their sales and service people. There’s a new customer satisfaction measurement that’s slowly replacing the customer survey method. This is called customer retention. It’s a measure of the percentage of customers that return to a dealership to buy another car or additional service. This trumps customer questionnaires because it cannot be “rigged” by the dealership or sales person. Paying money or giving free gas for good surveys is a common practice with car dealers.

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

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

My purpose in writing this column is in realization of the fact that there are no perfect companies, especially car dealerships and that includes mine. I employ 156 individuals and I would be less than candid if I didn’t say I might have a few “rotten apples” in my barrel. Unfortunately, I don’t know who they are and finding them is a work in progress. The same thing applies to all companies including car dealerships. In my list of recommended dealers, there are some employees of those dealerships who would take advantage of you but most would not. In those dealerships that I recommend you don’t buy your car from, there may be a few honest, courteous employees. Then there are all the dealerships that I don’t put in either category. Your odds of finding the right individual are much better if you patronize a good company or car dealership, but don’t totally let your guard down.

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

Open Letter to Governor Rick Scott

Dear Rick,

Please excuse this public form of communication, but I chose it because my message is urgent and I believe it will get your attention faster than going through the normal, bureaucratic channels.

Florida has no law requiring car dealers to disclose national safety recalls on used cars sold to their customers. This has always been bad, but in light of the unprecedented Takata air-bag inflator recall (currently affecting 75 million vehicles in the U.S. and rising), it should be mandatory for all licensed Florida automobile dealers to fully disclose to their customers when a defective Takata airbag is installed in the vehicle they are selling.

I’ve communicated my position directly to the Florida Automobile Dealers Association, and they are aware of this serious omission in Florida’s laws. Unfortunately, legislative action, as you well know, is always a slow process if it ever happens at all. What is required in this case is an emergency executive action by you, the governor of the state of Florida.

I can assure you  that very few Florida automobile dealers are voluntarily disclosing safety recalls affecting the used cars they sell.  As I write this letter, there are Floridians unknowingly buying cars with defective Takata airbag inflators that could possibly explode on impact, firing metal shrapnel into their bodies. There have already been several deaths across the country attributed to these faulty inflators.

It is a certainty that nearly all car dealers in our state have vehicles in their current inventories with these defective airbags and other safety recalls. I have identified sixteen in my used vehicle inventory that are affected. It’s a simple matter to identify these vehicles by entering the VIN online at the NHTSA website, http://www.nhtsa.gov/Vehicle+Safety/Recalls+&+Defects.

The sad fact is that most dealers don’t check these vehicles for recalls because it takes time to have the recalls performed and “time is money”. Recalls can only be performed by franchised new car dealers of the make that is recalled. Franchised car dealers prioritize recalls for their inventory cars and for their customers’ cars. They are also dealing with long waiting lists of these cars awaiting the requisite parts. With the Takata airbag inflator recall, the wait time is about about a year because of the lack of availability of parts. No car dealer is going to let a used car sit on his or her lot for a year!

Sadly, another reason safety recalls are not being disclosed to customers is fear of loss of profit. As it should, telling a customer that they are buying a used car with a potentially deadly defective airbag reduces the value of that vehicle - especially when the customer learns he or she must drive that car for a year before a safe airbag can be installed. 

Because disclosure negatively impacts the affected vehicles' values, car dealers are caught between a rock and a hard place. If they retail the cars to customers, they have to slash the selling price and if they sell them at the wholesale auction they have the same problem. Florida consumers will also be adversely affected, as car dealers will not be able to offer as much money for trade-ins under this recall since the dealer knows he or she can’t resell it for as much as they could with a safe airbag.

This presents an entirely new and different problem…an economic liability question. Everyone agrees that Takata is largely responsible for the reduction in value of the 75,000,000 vehicles with dangerous airbags. However, Takata is rumored to be on the verge of bankruptcy and/or selling out. This leaves the auto manufacturers with, potentially, all of the liability. The only parties that clearly have no responsibility in this are the owners of these affected cars and the dealers who disclose the defective airbags. Unfortunately, these are the only two parties that currently bear all of the economic loss.

Adding to the urgency of this crisis is the fact that the failure rate of Takata airbags is higher in Florida than most other states because of our high humidity which increases the risk of the airbag accelerant, ammonium nitrate, exploding. Furthermore, many of the cars recalled are older models, dating back to 2004 that have been on the highways for many years, and age is also a contributing factor to risk.

Rick, if you have any questions or comments about this letter, please call me on my personal cell phone, 561-358-1474. If you would like to meet with me, I will fly to Tallahassee on a moment's notice.

Best,

Earl

Car Salespersons' Six Deadly Sins

The internationally renowned research and polling company, J.D. Power, LLC, conducts annual surveys of U.S. car buyers to learn what motivates them to buy from one particular car dealer rather than another. The surveys reveal six most common reasons that car buyers choose not to buy from a car dealer.

Surprisingly 49% of people who buy cars, buy from the first dealership they visit. This is a shocking statistic to me because it means that a lot of car buyers are not getting competitive prices from several dealers. This means that they overpaid for their vehicles. Of the 51% of those car buyers who shopped more than one car dealership before buying, 21% bought the same make car from another dealer than the first one they visited for six reasons. I’ve labeled these “The Six Deadly Sins of Car Salesmen”.

(1) Thou shalt not be rude to thy customer. In schools for sales people, no matter what you’re selling, you’d think this would be full explained. How could a salesman expect to make a sale after insulting the prospective customer? But, apparently it happens often. One of the most common offenses is male chauvinist car salesmen referring to female customers as “honey”, “sweetie pie” or other demeaning terms, and even telling them to go home and come back with their husbands!

(2) Thou shalt not be dishonest with thy customer. Of course this applies only to the salesmen who are “caught’ being dishonest.

(3) Thou shalt be knowledgeable about thy product. Today’s automobile is a highly complex, very sophisticated computerized machine. Buyers look to the sales person for answers to their questions. Buyers rightfully assume that, if the salesman can’t even show them how the navigation system works or tell them what the city gas mileage is, why they should believe he’s right about anything else he has been telling her.

(4) Thou shalt not pressure thy customer. Can you believe that car salesmen still haven’t figured this one out yet? Who likes to be pressured? I often drive by car dealerships and see a half dozen or more sales people gathered together in a “pack”, often smoking cigarettes waiting for their “prey” to drive onto the lot. I wonder how many prospective car buyers just keep on driving after absorbing that fearful scene. Has a car salesman ever said to you, “This price is good only for today? If you wait until tomorrow, the price will go up”? How about, “I won’t give you my best price until you tell me you will buy the car today”? Or, “Shop around with the other dealers and get their prices, come back and see me, and I guarantee I’ll beat their prices”?

(5) Thou shalt not ignore thy customer. My first reaction to this one is how a salesman could afford to ignore anybody that might be thinking about buying a car. The unfortunate answer is that a lot of car salesmen think they can tell just buy a person’s appearance if they can afford to buy a car. Boy is that stupid! I know many wealthy people who dress down because they like the comfort or because they don’t want to be seen as having a lot of money. That person that walks into a car showroom wearing a Tee shirt, flip flops, and jeans may well be able to buy the whole dealership.

(6) Thou shalt quote thy customer a firm price. You may find this hard to believe, but this is true of 95+% of car sales people. In fact, a lot of car dealerships have a firm rule never to give a prospective customer a firm price unless that customer will buy now. A salesman can be fired for giving a customer a firm price and letting that customer leave the dealership. This is “old school” but still common and it’s very insulting to the customer. When I ask other car dealers why they continue this practice, they ask me “why should I give the customer a firm price so that he can go to my competitor and let him beat it by $100?” What these car dealers don’t understand is that this is what the free marketplace is all about…shopping and comparing products and prices so that you can make the best buying decision. If you deny your customer this inherent right, they will not buy from you. If you do give the customer a firm price, you show your trust and often times that customer will return to give you a 2nd chance to meet a better price.

I recommend that you do your homework before you begin car shopping. NEVER BUY FROM THE FIRST DEALER THAT GIVES YOU A PRICE. The single best source of information about reliability, performance and safety on cars is Consumers Report. I also recommend that you use a company named True Car to find out what a good price is for the car you’ve chosen to buy. Go to www.TrueCar.com. Armed with information on what a good price is, you can begin your car shopping. The certified True Car dealers you will find in your market are required by True Car to give you an out-the-door price plus tax, tag, and title (government fees) only. They are contractually bound to include their dealer fees and dealer installed accessories. You don’t have to buy from a True Car dealer to get their price; you may want to buy from another dealer who will meet or beat that price.

The Dealer Fee is Illegal if Not Included in the Advertised Price

Daniel Bell, Plaintiff, vs MIAMIMOTORSPORTS, LLC and ZGFINANCIALSERVICES,LLC Defendants 

As all of my regular readers know, I’ve been battling the infamous “dealer fee” in Florida for many years. For my new readers, to bring you up to speed, the dealer fee is a generic term for hidden profit secretly added to the price of a car. Florida is, by far, the worst of all 50 states in taking advantage of car buyers with the dealer fee. There is no cap on the dealer fee as there is in all other states. It’s not uncommon to find dealers charging dealer fees over $2,000. There’s no specific name for the dealer fee, allowing dealers to disguise it as an official government tax or fee. “Electronic Filing Fee” and “Tag Agency Fee” are just two examples.

Dana Manner is a highly qualified and experienced consumer advocate attorney in Miami. He has appeared on my weekly radio show [Earl Stewart on Cars Tuesdays 4-6 PM; www.StreamEarlOnCars.com] three times. Last February he won a judgement against Miami Motor Sports, LLC in Miami for a violation of the Florida Deceptive and Unfair Trade Practices Act FDUTPA. This dealer added his dealer fee to the advertised price of a car he sold to Daniel Bell. The case was published in the Florida Law Weekly Supplement and it is the first of its kind reported in Florida. A lawyer reading this will understand why publishing this court decision is so important and historic. “Case law” is looked to by judges in deciding a lawsuit and this is the first case law finding for the car buyer against a car dealer for adding the dealer fee to the advertised price. You can read this case law by clicking on www.DealerFeeillegal.com.

The legal decision, Daniel Bell, Plaintiff, vs MIAMIMOTORSPORTS, LLC and ZGFINANCIALSERVICES,LLC Defendants reads as follows:

Consumer law---Florida Deceptive and Unfair ‘Trade Practices Act---Vehicle sale---Dealer committed per se violation of FDUTPA by adding upcharge to advertised cash price of vehicle sold to plaintiff—Dealer and financial service company that is holder of dealer’s written contract are liable to plaintiff for actual damages and attorney’s fees---Where notice sent by financial service company prior to disposition of collateral failed to satisfy Uniform Commercial Code Article 9, plaintiff is entitled to statutory damages equal to finance charge plus 10% of principal amount.

What this court decision means to you, a Florida resident, is that it makes it much easier for you to demand an out-the-door price which includes all dealer fees. If you respond to any advertisement online, TV, radio, or print, the dealer fee or fees should all be included in that price. Dealers “disclose” their dealer fee in the fine print in different ways and some don’t disclose them at all. Some disclose it by saying “price excludes all fees”. This lumps together government fees (tag-tax-title) with the dealer fees, clearly illegal. Other dealers disclosure says “plus dealer fee”, but it doesn’t tell you the amount of the dealer fee, much less include it…thus it’s not legal. Some dealers disclose the amount of their dealer fee in the fine print, but that does not abide by the law which says it must be included in the price. This is not even to mention that the Federal Trade Commission (FTC) requires that anything that increases the advertised price must be “clearly and conspicuously displayed adjacent to that price”.

Perhaps the most common dealer fee deception is advertising just one car at the price which includes the dealer fees. For example, a Ford dealer might have 50 Ford F150 trucks of the exact same year, model, accessories and identical MSRP’s. He advertises this F150, including this disclosure in the fine print…”#A62932”. No one except the dealer knows what that number means; it’s the “stock number” of one of those identical Ford F150 trucks. He “might” sell you that exact truck at the advertised price, but if you buy any one of the other 49 identical trucks, you will have to pay extra for his dealer fees. Typically, when you ask the salesman to see the advertised vehicle, “it’s just been sold” or he “can’t find it”. But, the salesman says, “Not to worry…we have 49 more F150’s that are identical.” Yes, they are identical, but now the dealer can legally add his dealer fee to the advertised price.

Another common dealer fee deception is the multiple dealer fee charges using different names. Remember that the term “dealer fee” is generic. Many dealers don’t call their extra profit charge a dealer fee and, if they do, they often charge other dealer fees by a different name. Electronic filing fee, e-filing fee, doc fee, Dealer Services fee, documentary fee, processing fee, tag agency fee, administrative fee, notary fee, notary and closing fee, dealer prep fee, freight fee, and document processing fee are just a few. Some dealers will include only one of their dealer fees in the advertised price, the one that they named “dealer fee”. They can claim that they abided by the law because they did include their “dealer fee” in the advertised price. But the truth is that their “electronic filing fee” or “tag agency fee” is added to the price and they are also dealer fees under Florida law.

Remember that the powerful thing about Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA) is that it awards attorney’s fee to you if you win the case. Too many consumers hesitate to sue over a relatively small sum like a $999.95 dealer fee on a $40,000 vehicle. They’re afraid that their legal fees will cost them more than the amount they can recover. But under the FDUTPA, you can recover all of your attorney’s fees plus the $999.95 dealer fee. The dealer you’re suing knows this, and he assesses his downside as many thousands of dollars, not just $999.95…plus his own attorney’s fees. Most smart dealers will refund his dealer fee money, his ill-gotten gains, immediately upon receiving the initial demand letter from your attorney. Most attorneys will conference with you to assess your chances of winning at no charge. With a winning case, you pay him nothing and get back the illegally charged dealer fees. It’s a win-win for you and a lose-lose for the car dealer.

Never Buy A Tire Without Knowing the Date of Manufacture!

My motivation for writing this article was the recent tragic traffic accident death of six people, four of whom were young children. This accident occurred when a tire separated causing a blowout and the loss of control of the vehicle. The tires on the vehicle were very old...


I’ll bet you never buy milk or eggs without checking the expiration date. In fact, you exercise this same caution with all food and certainly your medication. The Food and Drug Administration (FDA) mandates that food and drugs have the expiration date prominently displayed on the labels before a manufacturer or retailer can legally offer food and drugs for sale.

Would you be shocked to learn that the National Highway Traffic Safety Association (NHTSA) does not mandate that tire manufacturers and retailers do the same? Consensus has it that tires manufactured six or more years ago can be unsafe. The reason for this is that the rubber degrades with age from oxidation. Sometimes you can see this condition from cracking on the outside of the tire. But oxidation can also occur on the inside of your tire. In fact, because your tires are inflated under pressure, there is a lot more oxygen (which causes the oxidation) per square inch on the inside.

There are other conditions that affect the speed of oxidation such as temperature, humidity, road conditions, and even your driving habits. You should have your tires inspected, or do it yourself, every thirty days. When the inflation psi is being checked, you should also inspect for uneven wear, road hazard damage, and “cracking”. Most people think that when they buy a set of “brand new” tires, they’re perfectly safe. But, if those brand new tires were manufactured a decade ago, they’re probably unsafe. Most tire retailers will not tell you the date of manufacture of the tires you just bought. They may not know themselves and, if they do know, they’re under no obligation to tell you.

Just like any merchandise, all types and sizes of tires don’t sell at the same rate. “Slow movers” can sit on the shelves of tire stores or in warehouses for years. I don’t know this for a fact, but I’m betting that some tire manufacturers sell older tires to some retailers at greatly discounted prices. This is typical behavior for all manufacturers and retailers. You can buy expensive brands at discounts in outlet stores like Loehmann’s and TJ Max and there are even shopping malls selling only merchandise the manufacturer chooses to divert from their regular retail stores. My recommendation is that you be especially careful when you buy a tire that has a “too good to be true” discount. Look at the Department of Transportation (DOT) date code. A tire with a DOT code of 1109 was made in the 11th week of 2009. Tires with a three-digit code were made prior to 2000 and are trickier to decode. The first two digits still tell you the week, but the third digit tells you the year in the decade that it was created. The hard part is knowing what decade that was!

Dr. Mark R. Rosekind is the director of the NHTSA and I’m addressing him in this paragraph:

Dr. Rosekind, I respectfully submit that your primary duty is to do whatever you can in your power to ensure the safety of American motorists. I suggest that you study the correlation between auto accidents caused by tire blowouts and the age from the date of manufacture of those tires. If you see a correlation, establish a legally enforced time limit on the selling of tires beyond their date of manufacture. Enforce that time limit with heavy fines and/or imprisonment. Furthermore, change the DOT date stamp from its current virtually indecipherable “code” to something like TIRE EXPIRATION DATE 12-11-16. This currently appears on all tires as “5216”. WHAT?

I also suggest that you contact your US Senator and Congressman. This should be a bipartisan issue and the only obstacle I can see to getting this law approved by Congress would be tire manufacturer and retail lobbyists.

The Owner of the Car Dealership is Accountable

Congress passed a law a few years ago that really “shook up” publicly owned companies. It’s called Sarbanes-Oxley, named after the Congressmen who sponsored the bill. Basically this law says that the CEO and other high echelon managers of a public owned company cannot get off the hook from wrong doings because they claim they didn't know what their employees were doing. I believe the same rules should apply to all businesses, even if their stock is not publicly held. The boss should always be held accountable for the actions of his employees and this should apply especially to car dealerships.

Most of the employees that the customer comes into contact with in a car dealership are paid on commission. Those employees get a percentage of the profit that the company makes on the transaction. Car sales people, service sales people (also called service advisors or assistant service managers), parts sales people, and the mechanical technicians who work on your car are mostly all paid on commission. This method of pay tilts the relationship between the customer and employee in somewhat of an adversarial manner. The employee wants the price to be as high as possible but the customer wants it to be low. In a car dealership that has talented, fully engaged, and ethical management, this potentially adversarial relationship is kept in a fair balance. Without the oversight of upper and middle management and careful hiring practices, some employees will exploit a customer to increase his commission.

What brought the subject of this column to mind was a call I received from a 78 year old widow from Ft. Pierce. She called to thank me for writing my column and to tell me that she wished she had read some of my columns before she bought her used Mazda. This was the first car she had bought on her own. Her husband had always taken on this responsibility. She paid the dealership a huge profit on her purchase. She was sold a maintenance package that she believed cost only $25 but it really was $2,500. She was rushed to sign the papers at night because the dealership was closing. In the morning, when she realized the mistake, she drove back to the dealership and asked to back out the sale but was told it was too late. She was told she had signed all the papers and that they had already sold her trade-in even though she had not given them the title. When she asked to speak to the General Manager, three different employees identified themselves as the General Manager. I get a lot of sad calls like this.

The owner of that dealership should know what’s going on. I’m giving him the benefit of the doubt by saying that he doesn’t know because if he does know it’s even worse. The owner should look at the big picture and the long term view of his business. You can take advantage of customers and benefit in the short run, but you eventually “pay the piper” when your bad reputation spreads far enough. Most of the bad things I hear about car dealers from their customers are not illegal things. They are simply unethical and not the way one human being should treat another. Refusing to refund the money of an elderly, widow after she realized that she had been taken advantage of is not illegal, but it sure “stinks”. Jim Press was the top executive for Toyota over all of North America and he was also the only non-Japanese to occupy a place on Toyota’s board of directors. He was quoted in the book, The Toyota Way by Jeffrey Liker, as saying “It’s what you do for a customer when you don’t owe him anything that is the true measure of character. It’s like sticking up for somebody who can’t defend himself”. I really like this quote and I have it engraved on a plaque which I give out each month to the employee who wins the “Above and Beyond Award”. This award goes to our employee who does something for her customer above and beyond what the customer would have expected.

If you have a bad dealing with your car dealership, do your best to contact the owner. This is impossible with publicly held dealerships like AutoNation and United Auto Group, but you should be able to talk to their General Managers. If it’s privately owned dealership, don’t give up until you see the owner.

Caveat Emptor and Car Dealers: You Can Fool Some of the People All of the Time

Almost everyone has read Abraham Lincoln’s popular saying, “You can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time.” I think Abe meant this to be a positive assertion that government may get away with deceiving us for a while, but in the long run, truth justice and the American way will prevail…and I think he was right.

However, it doesn’t work that way with unethical car dealers and car buyers. It always has been “caveat emptor”, or “buyer beware when it comes to buying or servicing a car. Unfortunately for a buyer to “beware” he must be “aware”…that is to say educated, mature, sophisticated and experienced. This excludes a very large segment of our population including the very young, the very old, the uneducated, those with low I.Q.’s and those not proficient in the English language. Is this one reason why our regulators and elected politicians don’t seem to care or take action with respect to the rampant unfair and deceptive sales practices of a large number of Florida car dealers? Most elected officials and regulators are lawyers and are highly educated and sophisticated. They don’t have a problem buying or servicing a car. In fact, the car dealer that tries to take advantage of a lawyer, regulator, or politician is asking for trouble.

I’ve been writing this column/blog and broadcasting my radio show, Earl Stewart on Cars, for over ten years. I sometimes feel that I’m “preaching to the choir” when it comes to advising people how to avoid getting ripped off by a car dealer. You, my readers and listeners, largely fall into the category of the educated and sophisticated, “aware” buyer. Most of you aren’t taken advantage of when you buy or service your car because you won’t allow it. Unfortunately, there are enough uneducated, naive, and otherwise vulnerable consumers to feed those unethical car dealers who prey on the defenseless among us. All you have to do is read some of the car ads in the Saturday (the biggest selling day for most car dealers) auto classifieds. To the educated, sophisticated buyer, these ads are actually funny, if you can forget the fact that so many fall prey to them and are taken advantage of by the dealers. For example, it’s hard for you or me to believe that anybody would respond to an advertisement without reading the fine print. Many dealers today are advertising prices that, when you read the fine print, are understated by many thousands of dollars. When you or I see a dealer stating that the car price is plus “freight”, we are educated enough to understand that the law requires that the freight cost be already included in the price. A shrewd buyer knows that “dealer list” is not the same thing as MSRP and that a large discount from “dealer list” means absolutely nothing. We know that the “lowest price guarantee’ is worthless if the dealer reserves the right to buy the car from the other dealer that offers a lower price.

There are those who argue that all buyers have the responsibility to guard against unethical sellers, to take care of themselves. In fact, that’s the literal translation of the Latin legal term “caveat emptor”…let the buyer beware. That’s sounds good, but what about the elderly widow whose husband recently died and who never had to make a the decision on a major purchase in her entire life? What about the young person just out of school with no experience in the real world? How about the immigrant who struggles with English? Should we be concerned about our underprivileged classes who often drop out of school because they have to go to work to support themselves or their family? You and I know lots of good people who, for one reason or another, simply can’t cope with a slick car or service salesman.

My bottom line is this, since we can’t rely on our regulators and politicians to protect those who “can be fooled all the time”, maybe we owe it to society to protect these folks. If you know someone who is thinking about buying a car or has a service problem with her car and you feel she may not have the ability to fend for herself with the car dealer, offer your support. If you’re one of the people who needs support, ask someone who can go “toe to toe” with a car dealer to come with you when you are car shopping. By the way, nobody, sophisticated or not, should car shop alone. Two heads are always better than one and it’s always a good idea to have a witness to what was said during a negotiation. And, of course, if you don’t have the time to help a person or you’re that person, you can always call me…I’m always here for you.

What to Do If You’re Treated Badly by Your Car Dealer

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

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

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

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

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

Your last resort is to contact an attorney. I list this last because hiring an attorney just about eliminates the possibility that you can quickly, amicably and inexpensively resolve your differences with the car dealer. Be very careful which attorney you choose. Try to choose one that is primarily interested in helping you and not in generating large fees for himself. Under the Florida Unfair and Deceptive Trade Practices Act, an attorney is entitled to his fees and costs from the defendant in a lawsuit if he wins. These fees can be much larger than the amount of your claim, motivating an unethical attorney to spend more time than is needed and dragging out a case to generate more fees than are necessary. This can be very dangerous for you because the car dealer’s attorney’s fees run roughly parallel to your lawyer’s and you can be held liable for those if you lose the case.

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

TEN BOOBY TRAPS WHEN YOU LEASE A CAR

The percentage of cars being leased, not purchased, is growing at a rapid rate. Currently it is about 25%. The manufacturers and the car dealers are pushing leasing because dealers make a lot more money when the lease a car and the manufacturers and dealers have a much better chance that you will be a repeat customer when you lease. For the careful, sophisticated consumer, leasing can be the best option, but these are ten traps to avoid if you lease your next car.

(1) You owe the bank or leasing company for damage beyond “normal wear and tear” and excess mileage. The danger here is because many people return their car to the dealership after the lease expires without getting signed, written verification of what damage exists on the car and what mileage is on the odometer. Return lease cars commonly sit on the car dealer’s lot for weeks or even months before the bank or leasing company gets around to picking the car up to send it through the auction. Anybody might be driving that lease car in the interim. It could be an employee of the dealership. A returned lease car with a full tank of gas can be a big temptation. In many dealerships the accounting for returned lease cars is very sloppy. Remember, the car does not below to the dealership, but to the bank or leasing company. The dealer doesn’t even have insurance on this car. The insurance may even still be in your name. A return lease car can easily be stolen and no one would even notice. I have heard many horror stories of customers who received bills from their leasing company weeks after returning their lease car for thousands of dollars in damage and excess mileage that they say they were not responsible for. Your only protection is to be sure that a representative of the dealership fills out, with you, a complete return lease inspection form which notes all damage, the estimated cost of repair and the mileage. As an extra precaution, I recommend taking pictures of your lease return car. Be sure that this is signed by the dealership representative and you get a copy.

(2) A lease ad with a large down payment and short term. Most lease ads you see on TV or read in the newspaper have a large down payment hidden in the fine print. A down payment of $4,000 is typical. Ironically one of the biggest reasons people lease cars is to avoid laying out more cash. Dealers do this because a cash down payment on a lease is “leveraged” compared to a down payment on a purchase. A $4,000 down payment on a lease will reduce the monthly payment much more than on a purchase. Also, watch out for shorter lease terms such as 24 months compared to 36 or 48 which are normal. Remember, when buying a car, your monthly payments are paying for the “whole car”. When leasing, you are only paying for a small part of the car…the time you use it. A 24 month lease requires less of a down payment to lower the monthly payment than a 36 month lease or 48 month lease. You can actually lease a car for “zero dollars per month” if you put up a large enough down payment. The banks call this a “one-pay lease”. All you are doing is making all of your lease payment up front and, to a lesser extent; this is what you’re doing when a dealer sneaks in a large lease down payment in the fine print.

(3) Low mileage allowance. Be sure you know exactly how many miles are allowed in your lease contract. By restricting the number of miles you are allowed, the dealer can quote a lower monthly payment. I’ve seen lease ads with as low as a 7,500 annual mileage allowance and a 25 cent per mile penalty. Most people drive a lot more miles than this. If you missed this in the fine print and are a fairly typical driver who puts 15,000 miles a year on your car, you would get a surprise bill from the leasing company of $5,625 at the end of a 36 month lease!

Car Dealers’ Latest Dirty Little Secret The “Electronic Filing Fee” aka Dealer PROFIT

This increased profit to car dealers is generally called the “Electronic Filing Fee or E-Filing Fee”, but there are other names that dealers use, just as they do for the infamous “dealer fee” like “dealer services”. Car dealers used to process the tag and registration required on new and used cars themselves. About 7 years ago they began outsourcing this to companies that can do this work cheaper than they can themselves. The typical cost of this outside service is only $10 or $12. So, not only did the car dealers reduce their expense, they passed along the reduced expense to you, the car buyer! But wait, there’s more! Car dealers are also marking up this reduced expense and passing this along to you too! I’ve seen Electronic Filing Fees marked up to $598…that’s a 5,980% markup!
At my dealership I began using a registration service company named Title Tech in 2009 and they charge me $10 to prepare the tag, registration, and title work for each new customer. This saves me considerable time and money from doing it myself. In the past I always absorbed the higher expense and I don’t pass along the reduced cost to my customers either. It’s adding “insult to injury” to mark up this cost and pass it along to you.

The word “fee” is almost always used by dealers when they are trying to disguise additional profit or to pass along an expense to you (which is the same thing as additional profit). When car buyers are lucky enough to even notice the Electronic Filing Fee, they usually assume it’s a tax or fee charged by the state, federal, or local governments. They do the same thing with the dealer fee under its various other names like documentary fee.

Florida law considers the Electronic Filing Fee to be the same thing as a Dealer Fee and requires that it be disclosed and used by car dealers as such. The language Florida requires for disclosure is “This charge represents costs and profit to the dealer for items such as inspecting, cleaning, and adjusting vehicles and preparing documents related to the sale”. The law also requires that the Electronic Filing Fee be included in all advertised prices. Unfortunately most dealers are ignoring this law just as they do with the additional profit they make with the Dealer Fee.

Dealers almost never include their Dealer Fees or Electronic Filing Fees in their advertised price which is a flagrant violation of Florida law. If they even mention that they have a dealer fee, they will say in the fine print something like “prices plus tax, tag, and fees”. A few dealers will disclose in the fine print, “plus tax, tag, and $999.95 dealer fee”. The Florida Senate says “The law requires that the fee be included rather than “specifically delineated” in the advertised price.” Most car dealers’ advertising is done on TV and the fine print disclosure is literally unreadable.

The other loophole permitted by Florida law is to allow the dealers to offer only one car with the dealer fee included in the price. That would not be so bad if the dealer clearly communicated this to the buyer. But dealers use something I call “the old stock number trick”. Every car in a dealer’s inventory is assigned a stock number for accounting purposes. A typical stock number is something like “A25771”. Dealers will put their stock number for that particular advertised car in the fine print at the bottom of the ad or elsewhere. Even if a customer sees the stock number, they have no way of knowing what it means. When the prospective buyer responds to the advertisement, the salesman tells him that the advertised car was sold but, “not to worry”, he has several more “just like it”. Yes, he does have several more identical cars in terms of model, accessories, and MSRP. But, because they have different stock numbers, the law now permits him to add his extra profit to the advertised prices disguised as Dealer Fee and Electronic Filing Fee.

It’s an affront to the car buyers of Florida that their Attorney General and their legislature allow this to continue. Car dealers have powerful lobbying groups and they clearly communicate to Pam Bondi, the AG, and the legislature that they better not mess with their Dealer Fees and Electronic Filing Fees.

Another reason you don’t hear much about this atrocity on consumers is that the media has assumed their “Hear no evil, see no evil, speak no evil” stance. The TV, newspapers, and radio are deathly afraid of losing car dealers’ advertising. Car dealers are the largest local advertisers. Some of you may know that my wife, Nancy, and I were fired from our weekly consumer advice radio show on Seaview radio which we had done for almost 7 years (We’ve been back on the air for about a year on 900 AM, The Talk of the Palm Beaches). This was because of dealer threats to cancel their advertising. When I reported this attack on free speech to the Palm Beach Post, they refused to run the story or even allow me to purchase an advertisement that states the truth.

What can you and I do about this when we have such powerful institutions as the media, Attorney General, and Florida Legislature siding with the car dealers against you, the consumers? The answer is MAKE SOME NOISE! “We, the people” support, not only the media, but the politicians. Without our viewing, listening and readership the media can’t sell advertising and without our dollars and votes, politicians can’t get elected. Call, write, or email your local newspaper, radio and TV station, and local senator and representative. Tell them you’re tired of them kowtowing to the car dealers and the Florida Automobile Dealers Association. Demand that the laws on the Electronic Filing Fee and the Dealer Fee be enforced. Tell them “We’re mad as hell and we won’t put up with it anymore!”