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Monday, October 28, 2013

Earl and Nancy: Fired from Radio Show...

...Raising Issues of Journalistic Ethics and Censorship

 Last Tuesday Earl Stewart on Cars, my weekly radio show which ran on Seaview Radio in North Palm Beach for nearly 7 years, was abruptly canceled.  Ed Morse Honda had threatened to cancel his advertising on Seaview unless Nancy and I were fired. One of the Seaview broadcasters (William is a pseudonym)  sent me an e-mail which you can read below with my response. I chose this as the clearest way to explain both my position and those of the Seaview owners and management. Read both sides and you be the judge. If you agree with me, please email or voice your views to the Seaview executives for the reinstatement of Earl Stewart on Cars.

Seaview Executive Contact Information:

Chet Tart, general manager

Jim Martin, owner

Tricia Woods co-owner

Email Exchange with "William":

WilliamEarl...although we only met twice, I really enjoyed meeting you, and I really like you.    And I understand your frustration and anger at Seaview for what they did.   I saw Chet Tart just a short time after he met with you as I was in the station to do my show that night.  I can tell you that he was not happy about what had happened, although he knew it was the right decision for the station.   This email is between you and me....Chet has no idea I'm sending it.   So this is not his point of view. 

EarlI agree that Chet was not happy about firing me and he told me that last Tuesday afternoon in my office. He told me that “the owners of Seaview, Tricia and Jim” had made the decision and he had no other choice. However, although I believe Chet told you that firing Nancy and me was the right decision to make, I don’t believe that he truly believes that. Chet is “following orders”. At this stage of his life, he can’t afford to be job hunting. 

WilliamI'd just like to give you some thoughts that you may not have considered.    While I was not here when you started your show, I believe that it started out as a consumer friendly show, with helpful hints on car buying and maintenance, and other auto news.  I enjoyed listening to it.  Over time, you got into your "secret shopper" thing, and I think that Seaview probably didn't recognize it as the danger that it was. 

EarlMy show started out 7 years ago and was, until my last show, a “consumer friendly” show, but it was never a “car dealer friendly” show. I think this is the false story you’re being fed by Chet and maybe others at Seaview who are desperately trying to hang onto their jobs. Sharing the truth can get them fired. You can ask any one of my regular listeners if my show was ever just “helpful hints on car buying, maintenance, and auto news”. You can also ask the Gary Todd or Dick Farrell, (I’ll provide you with their contact information if you like) who worked with Nancy and me at the very beginning what kind of a show it was at the beginning. They are no longer employed by Seaview and can freely tell you the truth. If you have the time, I’ll send you a recording from some of my old shows. They are every bit as objective and critical of car dealers as all of my recent shows. Yes, the mystery shopping report was not on the show from the beginning but it has been for several years. We tried it one time and it became hugely popular. Listeners would call in to complain when we didn’t have time to get to the mystery shopping report. 

WilliamSee, there is a difference between an investigative reporter, and a personality that owns a business.   If the investigative reporter spills the beans on some bad practices of a business, he has no vested interest in it.   The station might take some heat for it, but they would have made their decision before it went on the air whether to do it or not. 

EarlI should not be banned as a consumer advocate because I happen to own a car dealership. I totally divorce my “car dealer persona” from all of my consumer advocate rolls. My book, Confessions of a Recovering Car Dealer, my weekly blog, my weekly column for Hometown News, my continuous speaking tours at public libraries, Rotary and Kiwanis Clubs, Condo Associations, schools, churches, synagogues, and my former radio show. I rarely ever mention my car dealership and, when I do, it’s only when asked or to give full disclosure. I never, ever try to sell anybody a Toyota when I wear my consumer advocate hat. The media widely accepts my consumer advocate roll. Last week I appeared as a consumer advocate on national TV, ABC News regarding illegal and unethical car practices by car dealers. Over the years I’ve been quoted and appeared in any number of national medium…CNN, Fox News, Wall Street Journal, NY Times, USA Today US News and World Report, The Geraldo Rivera Show, as well as local TV and radio. You say “there is a difference between an investigative reporter and a personality that owns a business”. I totally agree, one difference is that an investigative reporter who also has owned and operated a business for 46 years knows a lot more about that business than an investigative reporter who never sold a car. That’s what makes me unique because I know where “all the bodies are buried”. In fact, I buried a few of those bodies myself and hence my book…”Confessions of a Recovering Car Dealer”. “I’ve been there and done that” and that’s why unethical dealers fear me so. If I wasn’t telling the truth, can you explain why, over seven years, not one single car dealer has sued me for slander? Furthermore, my dealership is a model of ethics and integrity among car dealerships. “Let him who is without sin cast the first stone, and he who lives in a glass house shouldn’t throw stones.” I must be without sin because I do live in a glass house and the car dealers of South Florida would be all over me like a cheap Kmart suit if I wasn’t practicing what I preach.

 WilliamWith a show hosted by the most recognized car dealer in Palm Beach, you do have a vested interest.  When you say disparaging things about Ed Morse or another dealer, the implication is that a customer would never see those things happening at your dealership.  That may be true, but it's a viewpoint that certainly is biased.  It's human nature.  We all think our company is the best.  Yours probably is.  

EarlI would be hypocritical not to admit that my radio show brought me tons of business. I’m not sure what you mean by saying that it may be true that my dealership doesn’t rip off customers like Ed Morse but that viewpoint is biased.” How can something be true and biased? Check your Webster’s. 

WilliamIn your book, you mentioned that while you have tried hard over the years to weed out bad employees, every once in a while you find a bad one and you deal with it.   Now just think if Seaview had the owner of Ed Morse on the air talking about something bad that happened at your dealership.   I don't think you'd be happy.  You might even pull your ads.   I wouldn't blame you if you did.  I've had many advertisers over the years who pulled their ads because they didn't like what was on the air or in print.   When that happens, the station or paper in question needs to assess the situation and see if the person pulling their ads has a valid point.  If you had a column in the Palm Beach Post and you wrote negative things about Ed Morse Honda, I bet they'd have a word with you, too. 

EarlI do have bad employees working for me. I have between 140 and 150 employees working for me and there are always a few rotten apples in a barrel that big. I encourage anyone to tell me about my rotten apples including callers to my radio show. If you were a regular listener, you would know that customers of mine will occasionally call in and criticize their treatment at my dealership. I encourage them to talk and explain in detail their bad experience. I then sincerely apologize and promise to investigate, make it right, coach the person(s) responsible and correct the processes that allowed it to happen. Many are amazed that I, not only allow, but encourage callers to criticize me and/or my dealership. People are also amazed that I regularly encourage car dealers and car dealership employees to call in. I promise to allow them all the time they need and not mute them, talk over them, or disconnect them. Some have taken me up on this but not too many. Not only is this the right thing to do, but it’s very good radio and builds my listener base. 

WilliamI did not hear what you said about Ed Morse Honda, but from your comment on facebook, it's obvious that you don't like their business practices.    Knowing you, I bet your instincts are correct.   But that doesn't mean that a radio station has to give you the podium to make negative comments about their other advertisers....the ones who pay the bills.   

EarlI said very little about Ed Morse; it was a caller, Frank Nash, who called the show after Ed Morse Honda refused to sell him a new Honda at the advertised price. Ed Morse Honda also added the dealer fee to the price which is a violation of state law. If you would like to speak to Frank Nash, his phone number is XXX-XXXX (redacted). If Frank Nash or I slandered Ed Morse Honda, he has his remedy in the courts, but as you know “truth is the perfect defense against slander and libel”. I would agree that Seaview shouldn’t give me a podium to say negative things about a car dealer if they were untrue. But are you saying that they should censor my efforts to report illegal practices by a local car dealer? 

WilliamThe good news is that in this age of new technology, you are not limited to licensed radio and TV stations, or newspapers, to get the word out.  You have a blog.  You have a website. You are on facebook.   You can do a "radio" show online and as a podcast.  Someone mentioned a national radio show.   I will tell you that everything you talk about EXCEPT the bad business practices of West Palm Beach car dealers is of interest to a national audience. 

EarlWilliam, bad business practices of WPB dealers may not be of interest to a national audience if that’s all they heard every week. But bad business practices by a local car dealer in Minnesota were of great interest to a national audience, ABC Lookout, with Brian Ross. I appeared on that expose and the show had very high ratings. You must know enough about what radio, TV, and all media audiences prefer to understand that “how to properly maintain your car” is trumped by “how not to get ripped off by your local car dealer”. Ask some of your friend what they think about their experiences with car dealers in buying and servicing. Answer this question…Why do car dealers perennially appear dead last on the Gallup “Honesty and Ethics in Professions” survey? There’s nothing the TV and radio audiences would rather see and hear than bad guys being exposed. 

WilliamSomeone mentioned that you could buy the radio station.    Let's say you did want to buy a radio station here.    If you did, how many of your competing car dealers do you think would spend money with you?   Zero!   They wouldn't want to give you their money. 

EarlJim Martin and Tricia Woods have asked me to buy their station, but I declined. This may be one more reason they don’t want me on their station anymore. I declined because my objectivity would be questioned if I was the owner of the station that aired my views. I also declined because I know nothing about broadcasting and I didn’t like the potential ROI after looking at the financials. 

WilliamI think you have every right to say what you do about other dealers.  But there are consequences when you do that.   Nobody is under any obligation to give you the microphone or ink to do it.  If you want to continue doing this, you're going to have to find your own podium.  Fortunately, in this day and age, it's a lot easier. 

EarlI’m not sure you’re right about there being no obligation by Seaview to allow my show to continue. My show is a community service show. The airwaves are owned by the people and the FCC and FTC have laws to protect the people. The FCC says that radio and TV stations must devote a certain amount of their use of the airwaves to serve the public and the FTC says that when groups of businesses conspire to harm or eliminate another business it is an illegal boycott. 

WilliamIf you'd like to talk about this some more, I'd be happy to meet with you or talk on the phone.    If you don't like my message, I understand.  But you seem like a really great guy, and I wanted you to look at the entire picture.   I remember the times my heart was broken buy a girl who broke up with me.  It hurts.  But after a while, it makes you strong. 

EarlI’ll be happy to meet with you or talk on the phone, but I’ll be very busy this coming week, as you can imagine. 

WilliamTry to hold back your anger, and rise above it.  Seaview is a great little radio station, and Chet has been great to me.   But the name Earl Stewart is better known in Palm Beach County than Seaview Radio.   I can't say that about William.    I think you can make this into a positive. 

EarlThanks for your advice on anger management but Chet will tell you that I wasn’t angry when he fired me last Tuesday. I’m disappointed in the owners of Seaview, but fully understood that Chet did what he had to do. If I were Chet Tart, I would have done exactly the same thing. I also think he’s “following orders” when he denies the truth of why I was fired. I’m getting feedback from my listeners who have called and spoken to Chet, Jim Martin, Mike Balsamo, and others that I’m lying about why I was fired. I believe that even Jim Martin may be misinformed and that Tricia Woods was the architect forcing Chet to fire me. You said in your email that the reason my show was canceled was that it had gradually become more and more anti dealer. This is not true. My show’s theme song is the theme from “The Good the Bad and the Ugly” (Nancy’s idea) and that’s what we do. We tell good stories about dealers when they happen albeit all too infrequently. What is true is that Seaview has found it difficult to sell advertising to car dealers for some time. Braman, Napleton, Arrigo, Schumacher, and Ed Morse have all threatened Seaview and most have canceled their ads. Ed Morse was the straw that broke the camel’s back. 

I believe that Tricia Woods made a very bad management decision. Looking at advertising revenue from one business group as the most important thing to the survival of Seaview is shortsighted. The heart of a radio station’s long run survival is their listener base. When the smoke settles the listeners will decide if Seaview survives. A lot of those listeners don’t like the way Seaview treated Earl and Nancy Stewart. As the word continues to get out, and this is my main mission over the next few months, more and more of Seaview listener will know the truth. Seaview’s listener base could be even further eroded should negative facts develop and be made public if litigation ensues.    

Tuesday, October 22, 2013


Earl Stewart forced off the air at Seaview Radio by disgruntled competing car dealers who threated to pull their advertising if Stewart wasn’t muzzled
Earl Stewart, who has for the past seven years hosted the Seaview Radio show Earl Stewart on Cars with his wife Nancy Stewart – has been forced off the air by Seaview, bowing to threats from competing car dealers to pull their advertising from the station.  His show has been cancelled immediately, according to Seaview Station Manager Chet Tart.  The decision was made by Seaview owners Jim and Tricia Woods (correct?) in response to the threats to their advertising income.

Each Saturday from 9 – 10 a.m. on Seaview  (960 a.m., 95.9 FM and 106.9 FM), Stewart answered calls from listeners on everything from how to buy a car without getting ripped off, to how to service a car, get the most our of a lease, and other consumer oriented questions.  One of the most popular weekly segments is the “Mystery Shopper” where a listener visits a local car dealership and reports back to the audience on their experience.  From these experiences and listener feedback, the show developed a “good car dealer” and “bad car dealer” list.

Last week, one caller reported on a bad salesexperience at Ed Morse Toyota.  When the owner of Ed Morse heard about the unfavorable report on the radio show, he called the owners of Seaview Radio and threatened to pull his advertising from the radio station if Stewart’s show wasn’t cancelled.  He said that other car dealers would join him in this effort to silence Stewart by also pulling their ads from the Palm Beach Gardens-based radio station.  

Stewart has been a vocal advocate for consumer rights and has promoted changes in the way car dealers do business, leading a statewide effort to abolish or limit dealer fees in Florida, expose scams such as paying for nitrogen in tires, and more.  In September Stewart was featured on ABC Network news’ The Lookout as an honest car dealer commenting on unethical car deal techniques.

“It’s a sad day for consumers when a radio station cancels one of its most popular programs simply for telling the truth to the public,” Stewart said. 

Monday, October 21, 2013

Don’t Be “Flipped” to a Lease

One of the most popular weapons in car dealers’ arsenals is the infamous “lease flip”. This is car dealer jargon for switching a customer who originally intended to buy a car to leasing the car.

Of course the motivation to do this is more profit for the dealer and a bigger commission to the salesman.  That’s not to say that leasing a car is always more costly than buying one, but it can be if you’re not careful. And not being careful is exactly what happens when a purchase intender becomes a lessee.

Here’s how it happens. You come into the dealership to buy a car. You may have seen the dealer’s advertisement in the newspaper or TV for a particular model. More than likely you are prepared to make a down payment and/or trade in your old vehicle. You have a monthly payment in mind because almost everybody has a budget and we usually translate most purchases into whether or not we can fit them into our monthly budgets. You negotiate the best price you can to buy the car, or maybe the sale price is good enough.

Now the salesman or more often the F&I manager/business manager tells you what your monthly payment will be. Let’s say that you have a trade-in worth $15,000 and aren’t going to put any cash down. The F&I [Finance and Insurance] manager tells you your monthly payment will be $427 per month. But that’s way more than you can afford and you tell him you can’t buy the car because you can’t afford that big a payment. He asks you how much you can afford and you tell him it must be under $350 per month. Now he has you set up perfectly for the “lease flip”.

“Mrs. Smith, I think I have just the right thing for you. What would you say if I told you that you can drive that new car home today for just $349 per month?” You say, “With glee, you say we have a deal!” Guess what? You’ve just been flipped. If you had bought the car at the advertised price or negotiated a very good price, the dealer probably would have made about $1,000 profit. and the salesman would have made about a $200 commission. Not that you’ve let yourself be flipped to lease, the dealer could be making $15,000 and the salesman could be making a $3,000 commission!

I’m not exaggerating. I get calls weekly from victims of lease flips. Many of the callers are elderly and many of them are widows who never bought a car before, but had relied on their husbands. There’s no law that limits the profit that a dealer can make when he sells or leases a car. $10,000, $15,000, and even $20,000 profits are made and usually on leases. The dealers can do this by using the trade-in as a capital cost reduction on the lease but allowing less for the trade than it is actually worth. In the example above, your trade-in may be worth $15,000 but you were allowed only $5,000 to reduce the capitalized costs of the lease. Also, the dealer could have raised the price of the car you negotiated or the sale price to MSRP or even 110% of MSRP which is allowable by the leasing companies.

By manipulating the number of months of the lease and the down payment [capitalized cost reduction], a dealer can give you as low a payment as you ask for and still make an exorbitant profit. Most buyers are so focused on monthly payments that they don’t carefully analyze what they are agreeing to and signing. The shorter the number of months of a lease, the greater impact the down payment has on the monthly payment. A $5,000 down payment reduces the monthly payment on a 36 month lease by $139 per month, $208 on a 24 month lease, and $417 on 12 month lease.

Incredibly many victims of the lease flip, never thought about the fact that after the 12, 24, or 36 month term of the lease, they own nothing. After 36 months, a car with a good resale value should be worth about half of what you paid for it. Many people who have never leased before think they can bring their lease car back early if they want. Leasing is not renting and you can bring your car back early only if you make all of the remaining lease payments. If you had bought the car for $30,000 and financed it for 36 months, you would have about $15,000 in equity at the end of 36 months and no monthly payments. You were building equity with every monthly payment in the purchase but you were building zero equity with your 36 lease payments.

As I said before, don’t let this frighten you from ever leasing a car. Leasing can be a good choice and sometimes the best choice. You can find six articles I’ve written for Hometown News and for my blog at “Lease a New Car before You Buy It”, “Car Leasing Booby Traps”, “Be Very Careful When Leasing a Car”, “The Lease Acquisition Fee…the Bank’s Gotcha”, “Buy or Lease Your Car at the Right Time of Year”, and “Should I Buy or Lease My Next Car?”

Monday, October 14, 2013

Auto Buying Services Can Be a Safer Way to Buy

Auto buying services are flourishing because buying a car is something that the average person dreads more than a root canal or a colonoscopy! You may be familiar with,,, Costco, Sam’s Warehouse, and There are thousands of local, private brokers who will buy a car for you for a fee. There are also a lot of other organizations that provide auto buying services for their members. AAA, American Express, Consumer Reports, PenFed, Nationwide, GEICO, USAA  are just a few.  

The first thing to remember is that all auto buying services are in the business to make a profit. They are all “middle men” that you and/or the dealers pay fees to. Paying a fee raises the cost of the car to the dealer.  That means that if you are a shrewd negotiator who really does their homework you should be able to buy a car for as low a price as any auto buying service and save the cost of the fee.

Realistically, very few people are that good at negotiating. Remember that car salesmen and managers are professional negotiators. This brings to mind the old joke…”When you sit down at a poker game and look all around the table but don’t see a sucker. You’re the sucker!” Besides lacking professional negotiation skills, few people have the “thick skin” to be able to deal with the game-playing and insulting shenanigans of car salesmen and their managers. In addition to the “pain” of buying a car is the inordinate amount of time it can take.

I consider local, individual brokers as being the least efficient and trustworthy of all auto buying services. Most auto brokers are ex car salesmen. They charge you a fee and they often charge the dealer a fee too. A private broker’s fee is usually much higher than a national auto buying services. At my dealership I’ve paid brokers several thousand dollars to his customer and had to charge a lot more for the car than if the customer had come to me directly. The broker probably charged the customer a fee too. There are a few brokers who are trustworthy and won’t gouge their customers, but they are few and far between.

As far as all of the national buying services, it’s still “buyer beware”. My two favorites are and Costco, but even with these two you should never let your guard down. The Costco program is administered by a separate company from Costco that is licensed by Costco to use their name. TrueCar is owned by a group of private investors and is new on the scene but are growing very rapidly. I’m signed up with TrueCar and Costco and I’m also a member of the TrueCar national dealer council. I do business with, AutoTrader, and Autobytel.

The auto buying services advise you or the dealer of the price you should pay for the car. But, you have to remember that they don’t come into the dealership with you when you actually purchase the car. Even though I don’t recommend local car brokers, this is one advantage they have over national auto buying services. A broker will go into the dealership with you to assist you in the buying process or actually to the buying himself. If he is honest and his loyalty is to you, not the dealer, he can protect you from being tricked into paying more than you were told the price was.

This is the biggest problem with national auto buying services. Every service will, or should, give you the name of the salesman in the dealership that administers their program. They usually have more than one person, and you should be sure that you deal only with their designated representative. All too often, members of auto buying services and companies just walk into the dealership and say “I’m a Costco member and I want to buy a car at the special Costco price.” The person you are talking to is likely a commissioned sales person and he’s also likely to say, “Sure, I’ll be happy to sell you a car at the Costco price.” Of course, what happens is he sells you the car at the highest price he can because he’s paid 25% of the total profit he makes on that car. Never deal with anyone else at a car dealership except the designated member of that car buying service.

You should also know the auto-service quoted out-the-door price of the car you’re buying before signing the papers or taking delivery. One of the reasons I like is that they give you that price before you ever go into the dealership. Costco does not give you the price but they require the car dealer to give you an official Costco price sheet for the specific car you’re buying. Unfortunately this doesn’t always happen. I recently mystery shopped a Costco dealer and they did not show my mystery shopper the Costco price sheet, but they said it was.

My definition of an “out-the-door price” is one that excludes only government taxes and fees.  All too often, the car dealers add their own fees which they variously refer to as doc fees, dealer fee, prep fee, administrative fee, dealer handling fee, electronic filing fee, etc. One of my gripes with is that they give you a “TrueCar Price” but below that in the fine print they say “Dealer’s Name charges a $XXXX.00 Documentary Fee.” Be sure that you read your auto buying services quoted price very carefully including the fine print.

Another common trick by dealers is to add “dealer installed accessories” to the price quoted by the auto buying service. My advice is to never buy a dealer installed accessory, only factory installed. There are always exceptions to this but be very careful when making one. Dealer accessories are typically low cost items, virtually worthless with hugely inflated prices. Examples are nitrogen in tires, paint sealant, fabric coat, pin stripes, VIN’s etched in glass, and roadside assistance.

If you cannot get the dealer to agree to the price that was given you by the auto-buying service, leave the dealership, call your auto buying service, and report that dealer. Usually there are other dealers in your area who are also affiliated with the same buying service and they may recommend one of them. The auto buying service is paid by the dealer and that can be a problem. They have to keep the dealers happy so that they can make money. They like to keep the car buyers happy so that they will come back and tell their friends. The wise auto-buying service will realize that the best long term strategy is to put the car buyer over the dealer. The auto buying service’s first loyalty should be to the car buyer, not the dealer. This means that services should police their dealers and cull out those dealers who try to take advantage of car buyers by raising the agreed upon prices.