As many of my readers know, I’ll never win a popularity contest among Florida car dealers, much less ever get elected as an officer of the FADA [Florida Automobile Dealers Association]. Some of you may have read how certain car dealers attempted to band together in such a fashion as to exert economic harm on my business. This failed and so will the latest attempt at making me go away, a series of business and personal lawsuits by Ed Morse.
For those who aren’t regular readers of my blog and this column, Ed Morse Honda ran a radio commercial last year accusing me of deceiving my customers. In the lawsuit he said that I “hid my dealer fee” in the car prices that I quoted to my customers. There are few things in my life more precious to me than my reputation. This attack on my integrity left me no choice but to sue Ed Morse Honda for slander and violation of the Unfair and Deceptive Trade Practices Act. My opinion is that Ed Morse got it exactly backwards as to who is deceiving their customers. I include all of my profits and costs in the prices that I give my customers. Ed Morse Honda, on the other hand, does not. Like most other car dealerships on Florida, if you ask the salesman for the price of the car in person, on the phone, or over the Internet you will get a price excluding a “dealer fee”, “doc fee, “dealer prep” or an extra charge by some other creative name.
The radio commercial he ran obviously didn’t make me back off on what I believe to be right. His countersuit against my company didn’t work either. Now, he has filed two personal lawsuits against me for defaming Ed Morse Honda and his lawyers in my blog. You can access my blog by clicking on www.EarlStewartToyota.com. The specific articles that I have been sued about are “Ed, You Went Too Far This Time”, “Why My Lawsuit Against Ed Morse Honda Is Important To You”, and “Ed Morse Sues Earl Stewart for Defamation”. I would like to hear back from you if you think that I wrote something that was not true.
Interestingly, I wrote another column for my blog and the Hometown News recently about my conversations during a lunch I attended in Washington D.C. with Bob Woodward, the Pulitzer prize journalists for the Washington Post. You can read this by clicking on http://oncars.blogspot.com/2009/04/conversation-with-bob-woodward-about.html. The main point I wanted to make when I wrote this was that Bob Woodward told me and the 8 other Toyota dealers at this luncheon that he believed the biggest threat to the USA and the World was that “he fears that the media is failing to fulfill its vital role to report all of the news and their opinions fearlessly, completely, honestly, and ethically.”
Think about the courage it took for Bob Woodward and Carl Bernstein to break the Watergate exposé of corruption in the Nixon administration. It was not only the courage of these two young reporters but the courage of the Washington Post editor, Ben Bradley, and the owner, Katherine Graham. There are few rights more precious than our first amendment rights which expressly prohibits the United States Congress from making laws "respecting an establishment of religion or that prohibit the free exercise of religion, infringe the freedom of speech, infringe the freedom of the press, limit the right to peaceably assemble, or limit the right to petition the government for a redress of grievances.
In the past 15 years the Internet has become a very powerful means of freedom of thought and opinion, gradually replacing newspapers. Newspapers have come under great pressure, initially from the electronic media, then the Internet, and finally this severest of all recessions. Today, it’s a lot more difficult for a newspaper editor or publisher to stand up like Ben Bradley and Katherine Graham did and go head to head with the executive branch of the United States Government. Threats of lawsuits and threats of advertisers are far more fearful when you are struggling to keep your newspaper afloat.
Even though I don’t get paid for it, I consider myself a journalist as well as a car dealer. I have written my blog, a weekly column in the Hometown News, and hosted a weekly talk-show on Seaview AM 960 [9-10 am every Saturday; stream it online at www.SeaviewAM960.com] for several years. I frequently speak to groups at public libraries, schools, civic clubs, and condo associations. I’m even looking for a publisher for my book which would be based on the hundreds of blog articles and Hometown News articles I’ve written over the years. Because I derive my income from my dealership and don’t accept pay for my writing, public speaking, or radio shows, I feel I have even more credibility and freedom from economic influences.
No lawsuits will ever stop me from freely expressing my opinion, especially when it comes to doing right by Florida car-buyers. I speak the truth, not only as I see it, but as the vast majority of car buyers see it. They have listened to and put their faith in me. Anytime I’m out in public, shopping, eating at a restaurant, pumping gas, or just walking down the street, people come up to me and thank me for spreading my message. They have also responded by entrusting me with their car purchases, making me the largest volume car dealership in Palm Beach County. I was honored by Toyota to be one of just 12 dealerships in the USA ranked by volume and customer satisfaction.
However, I do have a way that Ed Morse [and any other car dealer who charges a dealer fee] can stop me. I want an honest, acceptable answer to this simple question. “Why don’t you include your dealer fee in the price you quote your customers?” I won’t be the judge of whether your answer is honest and acceptable; your customers will. A third-party, independently selected research firm will survey a randomly selected, statistically significant number of your customers. They will judge whether your answer to my question is honest and acceptable. If a majority of your customers vote for you, I will withdraw my lawsuit, publically apologize to you, and donate $100,000 to your favorite charity. If your customers don’t agree that your reply was honest and acceptable, I will continue my lawsuit and you must consent to allow me to publically reveal the results of the survey.
Tuesday, May 26, 2009
Monday, May 18, 2009
ADVICE TO DRIVERS OF CHRYSLER & GM VEHICLES
There’s a lot of media coverage and concern about the fate of General Motors and Chrysler and about the UAW workers and their families. There’s even concern about car dealers and their employees and families. But what about you, if you are driving a Jeep, a Pontiac, a Dodge truck, a Hummer, a Saturn or any other GM or Chrysler product?
You have to face the fact that your vehicle has plunged in value. This is because the demand for products of these two manufacturers has plunged, especially for those makes that have been discontinued like Saturn or Pontiac. The value has also plunged because tens of thousands of Chrysler and GM vehicles will be dumped on the market by the thousands of dealerships closing and the banks that have seized the inventories of failed and canceled dealerships. It’s also because lenders are afraid to finance GM and Chrysler products. They have drastically raised their credit standards and down payment requirements. This makes it very difficult for most people to buy a GM or Chrysler product, even if they wanted to.
I’ll give you the good news first. If you are lucky enough to be leasing your GM or Chrysler vehicle, you are in the best shape of anybody. This is because you have no liability for the likely plunge in resale value of your vehicle. The resale value of your vehicle is the problem of the leasing company or bank who owns your vehicle. The GM or Chrysler model you are now leasing will be worth many thousands of dollars less than the leasing company thought when you leased it [Unless you leased it very recently which is unlikely because GM and Chrysler virtually eliminated leases when the economic crisis hit]. Actually, you are enjoying the benefits of their mistake one, two, or three years ago. That was when they grossly overestimated the “residual value”, or the estimated value, of your lease vehicle at the end of the lease. But I must warn you that the leasing company will be trying very hard to trick you into buying the car for the inflated value or to have you extend your lease. They do not want to have you turn that vehicle back in because they may lose $10,000 or more when they are forced to sell it the auto auction. Another warning is to be especially careful when you turn your car in to the dealer. Demand a thorough inspection report, detailing the condition of your vehicle’s interior, exterior, and mileage. Be sure you and a representative of the dealership sign off on this report and you keep a copy. Ideally, you should also take photos of the interior and exterior. Leasing companies are charging for “above normal wear and tear” as never before. They are overcharging on virtually all lease turn-ins unless you protest with documentation.
What do you do if you own your GM or Chrysler vehicle? The best solution for you is to keep it for as long as you can. The longer you own any automobile, the lower the average annual depreciation. The largest amount of depreciation for a new automobile is in the first year of ownership. Each year, the amount of deprecation gets less and eventually it almost stops. If you take really good care of your car, getting all factory recommended maintenances and washing and waxing it regularly, you will get good value out of your purchase and will enjoy reliable transportation, even if you won’t sporting the latest model on the block.
But, if you decide you must buy another vehicle, be prepared to get far less for your GM or Chrysler vehicle as a trade-in or selling it yourself. If you do trade it in, be very careful of those dealers who promise high trade-ins or “minimum” trade-ins. These are simply illusions made possible by artificially inflating the price of the new vehicle they are selling to show you an artificial “over allowance” for your trade-in. You’re better off just to “bite the bullet” and sell your trade in for what it’s worth. Just be sure not to sell it or trade it for less than it’s worth. You can do this by getting at least 3 bids on your vehicle. Call three used car managers at 3 dealerships that sell your make. Tell them you want to sell your car [do not mention that you are going to buy another]. Drive to each of these three dealerships and get their bid for your car. Now you’re prepared to buy the car of your choice. If the seller doesn’t match your highest bid, sell it to the highest bidder [Take into account the fact that you lose your sales tax deduction by not having a trade-in if you sell your car outright].
When you decide which make car to buy, you should consider makes with established higher resale values. You can get this information from Consumer Reports or online at www.kbb.com and www.edmunds.com. You don’t want to put yourself right back into the same position you started. Too many people fall for buying a vehicle because the selling price is the lowest or the rebates are the highest. The initial price you pay for car is only one component of the true total cost. In fact, highly discounted cars and cars with big rebates depreciate much faster.
I’ll finish with some more good news. You don’t have to worry about your warranty coverage, servicing for your vehicle, or spare parts availability. The government and existing laws will see to this. You may experience less convenience if your dealer is one of those who will be closing his doors. It would be a good idea to find out which GM and Chrysler dealers will be around in the future. Things are pretty chaotic now, but this news should be made public before much longer. Right now, GM is not revealing the names of the dealerships they have canceled. If you own a make that has been canceled like Pontiac or Saturn, other GM dealers will be able to service and perform warranty work for you.
You have to face the fact that your vehicle has plunged in value. This is because the demand for products of these two manufacturers has plunged, especially for those makes that have been discontinued like Saturn or Pontiac. The value has also plunged because tens of thousands of Chrysler and GM vehicles will be dumped on the market by the thousands of dealerships closing and the banks that have seized the inventories of failed and canceled dealerships. It’s also because lenders are afraid to finance GM and Chrysler products. They have drastically raised their credit standards and down payment requirements. This makes it very difficult for most people to buy a GM or Chrysler product, even if they wanted to.
I’ll give you the good news first. If you are lucky enough to be leasing your GM or Chrysler vehicle, you are in the best shape of anybody. This is because you have no liability for the likely plunge in resale value of your vehicle. The resale value of your vehicle is the problem of the leasing company or bank who owns your vehicle. The GM or Chrysler model you are now leasing will be worth many thousands of dollars less than the leasing company thought when you leased it [Unless you leased it very recently which is unlikely because GM and Chrysler virtually eliminated leases when the economic crisis hit]. Actually, you are enjoying the benefits of their mistake one, two, or three years ago. That was when they grossly overestimated the “residual value”, or the estimated value, of your lease vehicle at the end of the lease. But I must warn you that the leasing company will be trying very hard to trick you into buying the car for the inflated value or to have you extend your lease. They do not want to have you turn that vehicle back in because they may lose $10,000 or more when they are forced to sell it the auto auction. Another warning is to be especially careful when you turn your car in to the dealer. Demand a thorough inspection report, detailing the condition of your vehicle’s interior, exterior, and mileage. Be sure you and a representative of the dealership sign off on this report and you keep a copy. Ideally, you should also take photos of the interior and exterior. Leasing companies are charging for “above normal wear and tear” as never before. They are overcharging on virtually all lease turn-ins unless you protest with documentation.
What do you do if you own your GM or Chrysler vehicle? The best solution for you is to keep it for as long as you can. The longer you own any automobile, the lower the average annual depreciation. The largest amount of depreciation for a new automobile is in the first year of ownership. Each year, the amount of deprecation gets less and eventually it almost stops. If you take really good care of your car, getting all factory recommended maintenances and washing and waxing it regularly, you will get good value out of your purchase and will enjoy reliable transportation, even if you won’t sporting the latest model on the block.
But, if you decide you must buy another vehicle, be prepared to get far less for your GM or Chrysler vehicle as a trade-in or selling it yourself. If you do trade it in, be very careful of those dealers who promise high trade-ins or “minimum” trade-ins. These are simply illusions made possible by artificially inflating the price of the new vehicle they are selling to show you an artificial “over allowance” for your trade-in. You’re better off just to “bite the bullet” and sell your trade in for what it’s worth. Just be sure not to sell it or trade it for less than it’s worth. You can do this by getting at least 3 bids on your vehicle. Call three used car managers at 3 dealerships that sell your make. Tell them you want to sell your car [do not mention that you are going to buy another]. Drive to each of these three dealerships and get their bid for your car. Now you’re prepared to buy the car of your choice. If the seller doesn’t match your highest bid, sell it to the highest bidder [Take into account the fact that you lose your sales tax deduction by not having a trade-in if you sell your car outright].
When you decide which make car to buy, you should consider makes with established higher resale values. You can get this information from Consumer Reports or online at www.kbb.com and www.edmunds.com. You don’t want to put yourself right back into the same position you started. Too many people fall for buying a vehicle because the selling price is the lowest or the rebates are the highest. The initial price you pay for car is only one component of the true total cost. In fact, highly discounted cars and cars with big rebates depreciate much faster.
I’ll finish with some more good news. You don’t have to worry about your warranty coverage, servicing for your vehicle, or spare parts availability. The government and existing laws will see to this. You may experience less convenience if your dealer is one of those who will be closing his doors. It would be a good idea to find out which GM and Chrysler dealers will be around in the future. Things are pretty chaotic now, but this news should be made public before much longer. Right now, GM is not revealing the names of the dealerships they have canceled. If you own a make that has been canceled like Pontiac or Saturn, other GM dealers will be able to service and perform warranty work for you.
Monday, May 11, 2009
ANSWERS TO TOP 10 DEVIOUS STATEMENTS MADE BY CAR SALESMEN
(1) “I’ll give you the price only if you’ll commit to buy today.”
Your answer: I’ll ask you once more for your best price. There are 3 car dealerships that sell this same make within a half-hour drive of here. If I don’t get your best price right now, I’ll walk out of your showroom and you’ll never see me again.
(2) “I’m sorry, but we just sold that car we advertised, but we have others just like it”.
Your answer: I know that Florida law now allows you to add your $899 dealer fee to the advertised price, because, technically, I’m not buying the advertised car. I also know that you can now legally add “dealer installed options” to the low ad price. However, if you do not sell me the car I came in to buy for the advertised price, I will walk out that door and you will never see me again.
(3) “This price is good for today only”.
Your answer: I don’t believe you and I won’t make my decision to buy today. I want to shop and compare your price with your competition and, if yours is the best price, I will call you to see if I can buy it for that price. If you tell me that I can’t, I’ll buy it from your competitor.
(4) “This price is so low that I’m willing to guarantee it or pay you $1,000 [or some other amount] if you can find a better one”.
Your answer: First of all, no retailer can always have the lowest prices. If they did, they could not make a profit and remain in business. I’ll bet you can’t give me the name of just one customer that you paid your $1,000 guarantee to. I also know that you ‘reserve the right to buy the exact car from the dealer that I say has the lower price.’ What makes you think that I would believe your competitor would sell you that car so that you could steal his customer?” You must think I’m really stupid and I don’t want to buy a car from somebody who thinks his customers are stupid.
(5) “I can give you this price only if you take a car from my present inventory. If I have to order a car or dealer-trade a car, the price will be higher.”
Your answer: My car is very important to me. I want the exact color and accessories that will satisfy me and not a compromise. I will buy the car from you only if you agree to get me the exact car I want at the price you just quoted me. If not, I’ll bet that your competitor will.
(6) “I can’t give you this price in writing unless you will give me a deposit”.
Your answer: I know that Florida law allows you to keep my deposit if I change my mind about buying. I also know that you do not want to commit to a price in writing because I might show your price to your competitor who may beat it. That’s the risk you have to take if you want my business. If you do, you have a chance at my buying a car from you. If you don’t, you have no chance because you will never see me again.
(7) “What will you pay for this car today? Or, make me an offer on this car and I’ll take it to my manager for approval”.
Your answer: This is not a game that we’re playing. I’m about to make the 2nd largest purchase of my life. If I was shopping for a TV set and the salesman said that to me, I would walk out without another word and buy from his competitor. And that’s exactly what I’m about to do to you unless you give me your best price in writing.
(8) “We cannot quote you a price over the phone”.
Your answer: It makes no sense to me that I should have to drive 10 miles and back to your dealership just so that you can tell me the price of the car I want to buy. I can get prices on the Internet so why can’t I get them on the telephone? I think the reason you want me to drive to your dealership is so that you can pressure me into buying today without competitive shopping. If you won’t give me your best price right this minute, you will never hear from me again because I will buy from your competitor.
(9) “I’m sorry but the owner isn’t available right now and we are not allowed to give out his cell phone number”.
Your answer: If the owner of this dealership is too busy to speak to his customers than I’m too busy to buy my next car from him.
(10) “The reason that this $749 item labeled dealer fee [or doc fee, dealer prep, handling fee, admin fee, pre-delivery fee, etc] was not included in the price that I quoted you is because it is ‘to cover our costs of inspecting, cleaning, and adjusting vehicles and preparing documents for sale’.”
Your answer: The price quoted to a customer for any product should include all of the costs of the seller. Furthermore, I know that the manufacturers of all cars reimburse their dealers for “inspecting, cleaning, and adjusting vehicles”. I also know that now you’re going to tell me that you must charge me your dealer fee because you charge all customers this same fee. But, I also know that you can deduct the amount of your fee from the price you quoted me and leave the dealer fee on the buyers’ order which will have the same net effect of removing it. If you do not agree, I will walk out of your dealership and never return.
Your answer: I’ll ask you once more for your best price. There are 3 car dealerships that sell this same make within a half-hour drive of here. If I don’t get your best price right now, I’ll walk out of your showroom and you’ll never see me again.
(2) “I’m sorry, but we just sold that car we advertised, but we have others just like it”.
Your answer: I know that Florida law now allows you to add your $899 dealer fee to the advertised price, because, technically, I’m not buying the advertised car. I also know that you can now legally add “dealer installed options” to the low ad price. However, if you do not sell me the car I came in to buy for the advertised price, I will walk out that door and you will never see me again.
(3) “This price is good for today only”.
Your answer: I don’t believe you and I won’t make my decision to buy today. I want to shop and compare your price with your competition and, if yours is the best price, I will call you to see if I can buy it for that price. If you tell me that I can’t, I’ll buy it from your competitor.
(4) “This price is so low that I’m willing to guarantee it or pay you $1,000 [or some other amount] if you can find a better one”.
Your answer: First of all, no retailer can always have the lowest prices. If they did, they could not make a profit and remain in business. I’ll bet you can’t give me the name of just one customer that you paid your $1,000 guarantee to. I also know that you ‘reserve the right to buy the exact car from the dealer that I say has the lower price.’ What makes you think that I would believe your competitor would sell you that car so that you could steal his customer?” You must think I’m really stupid and I don’t want to buy a car from somebody who thinks his customers are stupid.
(5) “I can give you this price only if you take a car from my present inventory. If I have to order a car or dealer-trade a car, the price will be higher.”
Your answer: My car is very important to me. I want the exact color and accessories that will satisfy me and not a compromise. I will buy the car from you only if you agree to get me the exact car I want at the price you just quoted me. If not, I’ll bet that your competitor will.
(6) “I can’t give you this price in writing unless you will give me a deposit”.
Your answer: I know that Florida law allows you to keep my deposit if I change my mind about buying. I also know that you do not want to commit to a price in writing because I might show your price to your competitor who may beat it. That’s the risk you have to take if you want my business. If you do, you have a chance at my buying a car from you. If you don’t, you have no chance because you will never see me again.
(7) “What will you pay for this car today? Or, make me an offer on this car and I’ll take it to my manager for approval”.
Your answer: This is not a game that we’re playing. I’m about to make the 2nd largest purchase of my life. If I was shopping for a TV set and the salesman said that to me, I would walk out without another word and buy from his competitor. And that’s exactly what I’m about to do to you unless you give me your best price in writing.
(8) “We cannot quote you a price over the phone”.
Your answer: It makes no sense to me that I should have to drive 10 miles and back to your dealership just so that you can tell me the price of the car I want to buy. I can get prices on the Internet so why can’t I get them on the telephone? I think the reason you want me to drive to your dealership is so that you can pressure me into buying today without competitive shopping. If you won’t give me your best price right this minute, you will never hear from me again because I will buy from your competitor.
(9) “I’m sorry but the owner isn’t available right now and we are not allowed to give out his cell phone number”.
Your answer: If the owner of this dealership is too busy to speak to his customers than I’m too busy to buy my next car from him.
(10) “The reason that this $749 item labeled dealer fee [or doc fee, dealer prep, handling fee, admin fee, pre-delivery fee, etc] was not included in the price that I quoted you is because it is ‘to cover our costs of inspecting, cleaning, and adjusting vehicles and preparing documents for sale’.”
Your answer: The price quoted to a customer for any product should include all of the costs of the seller. Furthermore, I know that the manufacturers of all cars reimburse their dealers for “inspecting, cleaning, and adjusting vehicles”. I also know that now you’re going to tell me that you must charge me your dealer fee because you charge all customers this same fee. But, I also know that you can deduct the amount of your fee from the price you quoted me and leave the dealer fee on the buyers’ order which will have the same net effect of removing it. If you do not agree, I will walk out of your dealership and never return.
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