We have until January 8th, 2024 to submit comments to the FTC about proposed rules to BAN CAR DEALER JUNK FEES. Please visit to be heard!

Saturday, August 30, 2008

The Car Dealers’ Dirty Little Secret

When the Palm Beach Post broke the news of my lawsuit against Ed Morse Honda a little over a week ago [a very small article buried in the “Metro Report”], the reporter who wrote the story used the phrase “dirty little secret” to describe the dealer fee. That reporter’s phrase stuck with me because she hit it right on the head about the dealer fee. The fact that it’s a secret is what makes it so effective for the dealers and dangerous for the car buyers.

In fact, if it wasn’t a secret it would be totally useless to the dealers. This is why, when the FADA with their lobbyists and politicians approach me to discuss a compromise law that will give “complete disclosure” to the car buyer of the dealer fee, I know they can’t be sincere. Think about it. (1) Car dealers admit that the dealer fee is pure profit [they also refer to it as recapture of costs but that is synonymous with profit]. (2) All the rest of the dealers’ profit is included in the price he quotes you on the car. (3) Common sense and “Accounting 101” says that businesses should include all of their costs/profits in the price of their product or service. (4) What reason can there be for a car dealer electing to remove a portion of his profit from the price he quotes you on a car, renaming it “dealer fee” [or one of at least 22 other nebulous names according to the Florida Senate Investigation of the Dealer Fee] and then adding that profit back in when you sign your paperwork upon the delivery of your car? I submit that there can be only one answer to that question. That answer is that the car dealer wants you to think that the price he quoted you includes all of his profit and is the complete out-the-door price of the car. When I debate the dealer fee with car dealers I often say that if they can satisfactorily answer that one question, I will drop my opposition to the dealer fee. So far, I’ve found no one who can satisfactorily answer that question without admitting that the dealer fee is an unfair and deceptive trade practice.

Since the dealer fee could not exist if it were not a “dirty little secret”, you have to wonder why it has not been exposed before now. Why haven’t our legislators jumped to the defense of the consumer? What about the newspapers, TV, and radio…the media? You would think that the dealer fee would make a great campaign issue for a politician, wouldn’t you? I don’t know what percent of Florida registered voters have bought cars in Florida and paid a dealer fee but I’m sure it would be over 99%. You would think that a politician seeking reelection would jump on the “dealer fee bandwagon”. Making it illegal to quote a price on a car without including all of your profit in that price would save consumers of Florida hundreds of millions of dollars! You would also think that a newspaper or TV station would jump all over this! What a story!

We have over 1,000 car dealerships in Florida. These are relatively large businesses employing tens of thousands of Floridians and paying millions of dollars in taxes. The average price of a new car now is over $25,000. The Florida sales tax on one average car is $1,500! Car dealers are one of the largest advertisers in the state, spending hundreds of millions annually with newspapers, TV, and radio. Car dealers are very well organized. Virtually every larger dealership and most smaller ones are members of the Florida Automobile Dealers Association, FADA, headquartered in Tallahassee. You might wonder why the FADA would locate their headquarters in Tallahassee and not Orlando which is centrally located. That’s because FADA’s main function is to lobby Florida’s legislature. The FADA is a political lobbying group who gives strong financial support to all senators and legislators who “play ball” with FADA.

Are you beginning to get the picture? I’ve been told “off the record by politicians that they will not go against the FADA because their support is too important to their reelection and because without their support you cannot get a bill passed into law. I’ve been told by reporters who tried to run stories about the “dirty little secret” of the dealer fee that their editors “killed the story”.

You have heard or read the homily, “Money is the Mother’s Milk of Politics” and this is true. Well, advertising revenue is the Mother’s Milk of the media. Newspapers are suffering especially, losing ad revenue to the Internet and other media. They cannot afford to offend car dealers in their editorial or news departments because car dealers are either the largest or the second largest advertiser in most newspapers.

Just as I won’t paint all car dealers with the same brush, I won’t paint all of the media. Hometown News has run my weekly column for over two years. I know that it has cost them some advertising from car dealers but their publisher, Steve Erlanger, has the courage of his convictions. He is a journalist with the highest ethical standards for both his editorial and news departments. Radio station Seaview AM 960 airs my weekly talk show every Saturday morning between 9 and 10. This is a live call-in talk show where I expose unethical and illegal activities of some car dealers. For a long time no car dealer would advertise on Seaview AM 960, but there station has gained such good ratings recently that a lot of car dealers are now advertising with them in spite of my talk show. I congratulate Chet Tart, Seaview AM 960 General Manager, for his integrity and high journalistic standards, just as I do Steve Erlanger.

My lawsuit against Ed Morse Honda is not for publicity as car dealers have accused. The court is the only alternative I have when politicians have been silenced by FADA and the media has been silenced by car dealers’ threats of advertising boycotts. The court won’t remain silent when the jury returns their verdict. Every juror who has bought a car in Florida and paid a dealer fee [most, if not all, of the jury] will positively render a verdict for me after they discover the “dirty little secret”.

Saturday, August 23, 2008


Some say that my lawsuit against Ed Morse Honda for slander and violation of the Florida Deceptive and Unfair Trade Practice Act is just a squabble between two car dealers who will be airing their “dirty laundry” in public.

This couldn’t be further from the truth. I will prevail in court, and I have no doubt of this. How else can a jury possibly decide when they have all of the facts and understand how deceptive the dealer fee truly is? Most likely every juror has bought cars in Florida. Those who paid a dealer fee and didn’t know it until now will be furious. Those that saw the fee but thought it was like a state, federal, or local “official fee” will be angry when they learn the truth. Those few who understood what the dealer fee was and were forced to pay it anyway, will be very happy to see that they can do something to end dealer fees.

There are two parts to my suit…slander and violation of the Florida Deceptive and Unfair Trade Practices Act. The damages awarded me by the jury for slander will be donated to charity. When the dealer fee is found to be in violation of the Deceptive and Unfair Trade Practices Act, it will be the end of the dealer fee in Florida. This is why my lawsuit is very important to you and every other Florida car buyer. This verdict will be worth tens of millions of dollars to Florida car buyers.

Below are my comments at the press conference on Wednesday, August 21, the date I filed the suit. And below that is my press release which got less coverage than it could have due to tropical storm Fay.

I'm announcing today the filing of a lawsuit against Ed Morse Honda for slander and deceptive trade practices. I will donate any damages that I am awarded to local charities.
The lawsuit stems from a radio ad this dealership has been airing alleging that I am hiding dealer fees in my prices
I know he's targeting my dealership in the ad because I'm the only dealer in Palm Beach County, and nearly all of the state of Florida, who advertises on TV that I don't charge a dealer fee.
A dealer fee is pure profit, ranging from a couple of hundreds of dollars to sometimes $1,000, added on to the price of a car after the price is negotiated.
Most people don't know that it's not a tax -- they think it's a government mandated fee -- because it's on the sales agreement at the end by the taxes.
It is impossible to comparison shop for cars when a dealer fee is charged, because my price will look higher than my competitors because they add the fee on at the end after the price has been negotiated and the customer doesn't know it's there until they're signing the papers for the final sale.
I am suing for slander because the Ed Morse ad is false and attacks my reputation as an honest car dealer.
I have gone to great lengths to earn a reputation for honest dealing:
My dealership is built on the philosophy of Customers for Life. All of my employees must read this book and practice its concepts in dealing with our customers.
Any customer with a complaint or a compliment can pick up one of four red phones connected directly to my cell phone.
I have mounted a statewide campaign to outlaw the dealer fee because I feel it's unfair to consumers. I testified before the Florida Senate Commerce Committee and have addressed this issue with the Florida Automobile Dealers' Association
I write a weekly newspaper column on how to buy and care for a car and answer consumer's questions every morning on SeaView Radio and on my hour long call in radio show every Saturday morning from 9- 10 a.m. on Seaview 960
I traveled throughout the county addressing groups on ”How to Buy a Car without getting Ripped Off," exposing all of the tricks of the trade practiced in most car dealerships.
The suit also claims that Ed Morse Honda is violating the Florida Deceptive and Unfair Trade Practices Act because he does not disclose his $699 dealer fee as required by law.
If the court agrees with me that the charging of dealer fees is a violation of this law, it will be great news for car buyers throughout Florida.
They will be able to comparison shop accurately and will pay less to the car dealer without the dealer fee. These savings could amount to tens of millions of dollars.
Earl Stewart Toyota of North Palm Beach
Sues Ed Morse Honda for slander and deceptive trade practices

Suit stems from radio ad alleging hiding of dealer fee

Stewart pledges to donate anticipated damages to local charity

A lawsuit has been filed by attorneys representing Earl Stewart Toyota of North Palm Beach seeking an immediate injunction against the airing of a radio ad by Ed Morse Honda claiming that the car dealer hides a dealer fee in the sales price of his cars. The lawsuit also seeks damages against Ed Morse Honda for slander against Earl Stewart Toyota of North Palm Beach and for damages resulting from Ed Morse Honda’s alleged violations of the Florida Deceptive and Unfair Trade Practices Act.

Earl Stewart will donate to charity all of the jury’s award for his damages by Ed Morse Honda for slander. Stewart is also bringing the suit on behalf of Florida car buyers. A declaration finding the use of the dealer fee to be a deceptive trade practice could amount to tens of millions of dollars in savings to consumers buying cars in the state.

The lawsuit was filed Thursday, August 21 in Palm Beach County’s 15th Judicial Court by Michael Weeks of the Ward, Damon and Posner law firm on behalf of Earl Stewart Toyota of North Palm Beach.

The lawsuit alleges that Earl Stewart Toyota of North Palm Beach has suffered damages due to lost car sales resulting from an Ed Morse Honda radio ad which claims to expose a local car dealer who claims he doesn’t charge a dealer fee but actually “packs the equivalent of a dealer fee …in your price…where you can’t see it.” Since Earl Stewart Toyota of North Palm Beach is the only car dealer with television advertising in Palm Beach County stating that he does not charge a dealer fee, the ad specifically targeted the dealership and is slanderous, the suit states. Damages are sought because Earl Stewart has, according to the suit, “built its reputation and focuses much of its advertising upon the strength of Earl Stewart Toyota’s honesty with its customers and integrity in the automobile industry.”

The lawsuit alleges that Ed Morse Honda is in violation of the Florida Deceptive and Unfair Trade Practices Act because the dealership charges a $699 dealer fee on all of its car sales, but does not disclose it in price negotiations, in violation of the act. The act allows for “anyone aggrieved by violation of the Act to obtain a declaratory judgment” against the party committing the violation.

The suit claims that not disclosing the dealer fee in advertisements or price stickers “results in a deceptive environment for consumers and hurts dealers who disclose all of their profit in the prices they quote.” The result is that consumers cannot fairly comparison shop for cars from dealer to dealer if one price includes all of the dealer’s profit while another does not and has the extra profit added on as a dealer fee after the price is quoted. The suit claims that this practice is “an obvious evasion of Florida Law” and “flies in the face of the purpose of the Florida Deceptive Trade Practices Act.”

Earl Stewart is known as an outspoken advocate for eliminating the dealer fee in Florida and this year testified for its elimination before the Florida Senate Commerce Committee. This spring he initiated a state-wide internet campaign to urge consumers to contact their state legislators to pass legislation outlawing the dealer fee.

Earl Stewart Toyota of North Palm Beach is a four-time recipient of The President’s Award, the highest award Toyota gives for customer satisfaction. The dealership is the only Toyota dealership from Vero Beach to Ft. Lauderdale to win the award this year. Stewart also is a featured speaker at numerous civic groups, clubs and public libraries on the topic of “How to buy a car without getting ripped off.” He also answers consumers’ questions on a live hour-long radio show broadcast each Saturday at 9 a.m. on Seaview 960 AM and writes a weekly consumer article for Hometown News. These articles are part of his blog site offering advice to consumers on buying and servicing cars, found at Stewart said he plans to donate any damages received from the lawsuit to a local non-profit organization.

Earl Stewart Toyota of North Palm Beach sells more hybrid vehicles than any other car dealership in America, outside of California where strict emission laws boost hybrid sales. He is the number one volume Toyota dealer in Palm Beach County.

You can read the entire lawsuit, by clicking on

Monday, August 04, 2008

Ed, You Went Too Far This Time!

You may have recently heard a radio commercial by Ed Morse Honda of Riviera Beach that said this:

[Disclaimer: 24 month lease with approved credit, 3-9-9-5 down plus tax, tag and title]

“Hi…this is Lia again…from Ed Morse Honda…with a little exxpossee..

Last night I’m watchin’ TV in my jammies…and see a car ad that’s full of …well…
Bull_ _ [Sound effect: cow moo].

This car dealer says…he doesn’t add a dealer fee…on top of your price. He doesn’t tell you…he packs the equivalent of a dealer fee – or more – in your price. Where you can’t see it. Insulting right?

Well, Ed Morse Honda has an honest deal for you.
This year is our once-a-year Clearance Event.
Every one of our gas sipping Hondas is reduced.

Accords with 31 miles per gallon are now just $159 a month…and 36 mile per gallon Civics are reduced to $16,203.
Plus, Ed Morse has clearance financing…below 1%.

And…we also have a basket of free bull_ _ [SFX: cow moo] horns…
And when you see one of those no dealer fee TV ads…give it a toot!

And get a real deal at Ed Morse Honda
On I-95 and Blue Heron Blvd.

You will notice that the commercial does not name me or my dealership. However, since I’m the only car dealer “in the World” advertising on TV to make the dealer fee illegal, it’s pretty obvious that this slander was directed at Earl Stewart and Earl Stewart Toyota. Now, I’m not one who likes to sue anybody. In fact, I don’t remember ever filing a lawsuit, but this commercial directed against my company and me is just going too far. How dare Ed Morse say that I “pack the equivalent of a dealer fee or more in the price where you can’t see it”! Ed Morse and all of the other dealers who charge a dealer fee are the ones trying to hide something from their customers. Ed Morse’s dealer fee is $749. When you are quoted a price on car by one of his salesmen, that dealer fee is not included. When my sales people quote you a price on a car or you look at the sticker or other price on the car, it’s an out-the-door price plus tax and tag. Which of us is hiding something from our customers?

When you get a price from my dealership, you get no “surprises” when you sign the paperwork. That’s when customers who pay dealer fees usually discover that the price of the car is higher than they were told. In many cases, they never realize that the dealer fee was added or they think it’s some like of “official” local, state, or federal fee.

The commercial above says, “Well, Ed Morse Honda has an honest deal for you”. Is it honest to put a disclaimer, out of context, at the beginning of the commercial which is difficult to understand because the disclaimer is “mumbled”, very rapidly at reduced volume? This is not to mention that the disclaimer is about a lease payment that isn’t mentioned in the commercial until near the end. The misleadingly low $159 per month payment is spoken loudly and clearly. The disclaimer that you can’t understand says you have to make a down payment of almost $4,000, but it makes this unclear when it says “3-9-9-5 down”…just one more subterfuge to make sure you don’t understand you have a large down payment on a short, 24 month lease, to arrive at the $159 payment. A $3,995 down payment on a 24 month lease is the equivalent of $166.45 per month. In other words, the advertised monthly payment is really less than half of the real lease payment. How “honest” is this?

You have to ask yourself, what would possess a car dealer to attack me for lack of integrity because I don’t charge a dealer fee. It doesn’t seem rational does it?…except maybe in Bizarro World. Furthermore, to make that attack in a radio commercial which is itself deceptive is even more irrational. What drives these dealers to irrationality? I believe it is emotions”…predominantly fear and/or anger. As you know I’m virtually the only car dealer in Florida that does not charge a dealer fee. I lobbied the legislature in Tallahassee last year to make this “dealer license to steal” illegal in Florida. I am lobbying again this year and the prospects for my success in the 2008 legislative session are quite good. I’ve been approached by and met with legislators and lobbyists who want to talk compromise. They wouldn’t do this if they were confident. They are terrified that the dealer fee may become illegal. Dealers are afraid to lose this “profit” which they can now disguise as the reimbursement of a “fee”. This attack by Ed Morse Honda to impugn my reputation and integrity is not the first attack launched against me by Florida car dealers. A few months ago a group banded together to conduct an illegal boycott of my dealership. They aborted this effort upon receipt of a letter from my anti-trust attorney who informed them that such an action would subject them to reimbursing me for treble damages in civil court and criminal prosecution by the Justice department.