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!

Monday, November 25, 2013

When a Car Dealer “Rips You Off” Who Should Be Held Responsible?

I receive a lot of emails, calls, and letters every week from victims of car dealers who were taken advantage of in buying, leasing, and servicing their cars. They mostly call to ask what they can do to get all or some of their money back. These “victims” fall into different categories:

(1)   The elderly, often widows.
(2)   The very young, usually buying their first car.
(3)   Those who don’t speak or understand English well, not born in this country.
(4)   The uneducated.
(5)   People with bad credit.
(6)   Everybody else

(1)   The elderly, especially widows, are the most victimized.  The reasons for this are that Florida, especially South Florida, is a “retirement” state. Baby boomers and pre-baby boomers make up a disproportionately large percentage of Florida’s population. Not only that, but life expectancies have soared in recent years…81 for a woman and 76 for a man. Men usually predecease their wives. Women’s role in the American culture is a great deal different than in the 1930’s and 1940’s. More often than not, the husband was not only the breadwinner, but the decision maker in the household. Widows of that era are often buying their first car today. Men and women in their seventies, eighties, and nineties (Yes, I have a lot of customers in their nineties) aren’t as sharp as they once were.  I’m 73 and I’ll be the first to admit this. In my opinion, men and women of my age, and older, are more trusting. We can’t forget the terrible disease, Alzheimer’s. Unless a court declares a person incompetent, a person with Alzheimer’s can legally buy a car in Florida and it happens all too often. This is one of the most despicable acts that some car dealers commit.
(2)   What chance does a teenager or kid in his twenties have when negotiating with a car salesman and his manager to buy a car? Usually it’s the parents who call me to tell me how their son or daughter was taken advantage of. I don’t tell them this, but what I’m thinking is “Why did didn’t they accompany them to the car dealership to advise them?”
(3)   South Florida is not only a retirement area, but it’s a haven for immigrants from Cuba, Haiti, and South and Central America. Many of these are first generation Americans who have a difficult time with English or can’t speak, read, or write English at all. These people are easy prey for unscrupulous car dealers. Can you imagine how difficult it would be for you to get a fair price on a car you were buying in a foreign country where you were did not speak or understand the language?
(4)   Let’s face it; there are too many Americans who never had the benefit of a proper education. We have too many high school dropouts and too many high school graduates who still can’t read or write as well as they must to function in our society. Lack of a good education is one of America’s most serious problems and we’re seeing other countries like China, Japan, Germany and India pass us by in educating their children. It’s almost criminal how the educated are exploited by car dealers’ advertising and sales tactics. How many car dealers’ TV advertisements have you seen that you laugh at, knowing that they are totally untrue, “bait and switch” to lure you into the dealership. You wonder who would believe that kind of nonsense.  The reason that car dealers keep running those ads is because they work.
(5)   There are always people with bad credit who have to buy a car, especially in today’s economy. In Florida, without an effective mass transit system, a car is virtually a necessity to get to your job or find a job, not to mention the doctor, school, or the pharmacy. People with bad credit are at the mercy of the car dealer. The main thing on these peoples’ minds is not how good a price or a car can I buy or how low an interest rate, but can they be financed? Knowing this, car dealers will charge whatever price and interest rate the lender will let them get away with. People with bad credit almost always pay dealers a higher profit than those with good credit.
(6)   The title to this article asks the question, “Who should be held responsible for car dealers ripping off customers?” For categories (1) through (5), the answer is our regulators and our lawmakers. But for the last category, “Everybody else”, it’s themselves. Of course, it goes without saying that the car dealers who do this are responsible too. But who doesn’t know that most car dealers do business this way? Who doesn’t know that car dealers perennially rank last on the annual Gallup “Honesty and Ethics in Professions” poll? I recently received an email from a woman who fell in none of the first 5 categories above. She was terribly victimized by a very unethical car dealer from whom she bought two used cars on the same night. Her email asked me for advice on what she should do. Of course the “horse was out of the barn” and this makes things more difficult. This woman did not ask for or receive a CarFax report on either used car. Nor did she take either car to her mechanic for approval. She clearly didn’t investigate the dealer for reputation. She didn’t check any sources like Consumer Reports for recommended used cars. She did not shop and compare prices for similar cars and the list of “did not’s” goes on. If you don’t do your due diligence when you buy a car you are equally culpable with the car dealer who took advantage of you. 

At this point, I will shamelessly plug my book, Confessions of a Recovering Car Dealer. I say “shamelessly” because 100% of the proceeds from my book go to charity. You can buy this book at It will tell you everything you need to know about how not to be ripped off by a car dealer. Or, you can read my blog articles on this at

Monday, November 18, 2013

Dealing with the Dealer Fee - Earl Stewart User's Guide

Hopefully by now, all but my newest readers know about the infamous “Dealer Fee”. If you don’t know, it’s a hidden price increase on the car you purchase disguised to look like a federal, state, or local tax or fee. It’s actually 100% profit to the dealer. “Dealer Fee” is the most common name for this disguised profit, but it goes by many names such as doc fee, dealer prep fee, service fee, administrative fee, electronic filing fee, e-filing fee, tag agency fee, pre-delivery fee, etc. The names are only limited by car dealers’ imaginations. Almost all car dealers in Florida charge a Dealer Fee. The dealer fees range from around $700 to as high as $2,000!

This is the Florida law that is supposed to regulate the Dealer Fee: “The advertised price must include all fees or charges that the customer must pay excluding state and local taxes.” The law also requires that the Dealer Fee must be disclosed to the buyer as follows: “This charge represents costs and profits to the dealer for items such as inspecting, cleaning, and adjusting vehicles and preparing documents related to the sale.

This law is very weak and almost never enforced. When enforced, it isn’t enforced by the letter of the law; it is done so as to “accommodate” the car dealers. The law is “weak” because it requires only that the dealer fee be included in the “advertised” price. The word “advertised” is narrowly interpreted to mean a specific car shown in a newspaper, TV, radio, or online ad, but, what about when you get a price on the phone, online, or from the salesman? You don’t find out about the Dealer Fee until you’re in the business office signing a bunch of papers. The dealers get around advertisements very easily by including a “number” in the fine print. This number is their stock number that designates one specific car. When you respond to the ad, this car is no longer available (sales people are usually not paid a commission for selling the “ad car). The advertisement might say “many more identical cars are available.” It’s true that identical cars are available for sale, but they are not available for sale at the sale price because they are not the advertised stock number car. If you buy one of those “exact same cars” you will pay from $700 to $2,000 more.

The reason I’m told that the law is rarely enforced is that the Florida Attorney General’s office is understaffed and too busy enforcing other Florida laws. I’m also told that Florida car buyers don’t file very many complaints against car dealers for violating the Dealer Fee law. I don’t believe that there can be too many other infractions of the law that take more money annually from consumers than dealer fees take from car buyers. Just one car dealer selling 1,000 cars a year and charging a $1,000 dealer fee is taking a $1 million annually from car buyers.  Most car dealers in South Florida well a lot more than 1,000 cars annually and many charge more than $1,000 dealer fee. I believe that the reason more complaints aren’t filed on the dealer fee is because most car buyers don’t know that they are being duped. They either don’t notice the fee or assume it’s an official federal or state fee. Dealer often tell their customers that all dealers charge it and that it’s required by law.

The Attorney General also “accommodates” the dealers by not interpreting the law the way it was intended. For example, the law says that the dealer fee must be included in the advertised price. The Florida Senate has ruled that the law requires that the fee be “included” rather than “specifically delineated.” But the Attorney General allows car dealers to advertise car prices without including their dealer fee in the price if they mention their dealer fee in the fine print. They also allow car dealers to simply state in the fine print that they have a Dealer Fee but not even mention the amount. To me they are simply allowing the car dealers to break the law.

Lastly, the required disclosure of the Dealer Fee on the vehicle buyer’s order or invoice is confusing, misleading, and incorrect: “This charge represents costs and profits to the dealer for items such as inspecting, cleaning, and adjusting vehicles and preparing documents related to the sale.” It should not say “costs” because any cost that you pass along to the customer in the price of a product is pure profit. A dealer can pass along his utility bills, sales commissions and advertising if he wants to and call it a “dealer fee”. It should not say “inspecting, cleaning, and adjusting vehicles” because all car dealers are reimbursed by the manufacturer for “inspecting, cleaning, and adjusting vehicles”.  

So, what should you do when you are confronted by a car dealer with the “Dealer Fee”?  Besides “LEAVE”, here are some suggestions that may help you:

(1) Make it clear from the very beginning that all prices you discuss must be “out-the-door” prices. This way you don’t care if the dealer fee added up front because you will shop and compare their bottom line price with at least 3 competing car dealers. Ideally you should require that they include tax and tag in that price. If you don’t they might try to slip in something they call the “electronic filing fee” or “e filing fee” and trick you into believing it’s part of the license tag and registration.

(2) The dealer will often tell you that all car dealers charge Dealer Fees and that they are required by law to add the dealer fee on every car they sell. Simply tell them that you know this is not true and you can cite me and other car dealers like CarMax who do not charge a dealer fee. Print out a copy of this article, show it to them, and tell them that you know that there is no law that says he must charge you a dealer fee.

(3) As long as you and the dealer understand that the out-the-door price is the price you will shop and compare with his competition, you don’t need to be concerned whether there is a dealer fee showing on the vehicle buyer’s order. To be competitive, the dealer can simply reduce the price by the amount of his Dealer Fee and the bottom line is what you are comparing.

(4) Be aware that dealers usually do not pay their sales people a commission on the amount of their dealer fee. In fact, dealers often misinform their sales people just like they do their customers. The salesman who tells you that the all dealers charge Dealer Fees and that the law requires everyone pay a dealer fee may actually believe it. Sale people who understand that the Dealer Fee is simply profit to the dealer will be resentful of not being paid their 25% commission on it. A $1,000 dealer fee costs the salesman $250 in commission.

(5) When you respond to an advertisement at a specific price for a specific model car, object when the dealer adds the dealer fee. Unfortunately, the law allows him the loophole of claiming that the ad car is a different stock number, but you might be able to shame him into taking off the dealer fee. If you raise a “big enough stink”, the dealer would be smart to take off the dealer fee than claim that technicality, especially if you were to advise the local TV station or newspaper.
I hope that these suggestions help you and I hope that you will file a complaint with the Florida Attorney General, Pam Bondi. If enough consumers (who are also voters) let our elected officials know how they feel about the Dealer Fee, it will bring positive results.

Monday, November 11, 2013

Car Dealers’ Latest Dirty Little Secret

The “Electronic Filing Fee” aka Dealer PROFIT

Taken from an actual dealer’s buyer’s order

Florida Sen. Joe Negron is leading an effort to roll back about $12 of the cost of registering a car in Florida. He says this will save Floridians about $230 million a year. This is to bring back the tag registration cost back to where it was about 4 years ago, when the legislature raised it because of the bad economy.
What Sen. Joe Negron and, apparently, the rest of the Florida legislature either doesn’t know (or care) about is that, at about the same time, car dealers began passing along and marking up an expense to car buyers. This is increasing their profits far more than the $230 million a year that reducing tag registration fees will save.
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 4 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 markinging up this reduced expense up 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  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 recently fired from our weekly consumer advice radio show on Seaview radio which we had done for almost 7 years. 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!”

Monday, November 04, 2013

Open Letter to the Owners of SeaView Radio: Please Bring Back Earl Stewart on Cars

Mr. Jim Martin and Ms. Tricia Woods  
SeaView Radio; Station WSVU  
8895 N. Military Trail Suite 206 C
Palm Beach Gardens, FL 33410

Dear Jim and Tricia,

As you know, on October 22, Chet Tart, General Manager of WSVU (SeaView) radio in North Palm Beach/Palm Beach Gardens visited me in my office and told me that you had ordered him to cancel “Earl Stewart on Cars” which had been airing on SeaView Radio for about seven  years.

Every Saturday morning Nancy and I gave advice to huge number the car owners of South Florida who called our show for advice. Nancy focused on giving advice to women who have become a powerful economic force in car buying, leasing and servicing but who are treated by car dealers with less respect than men. We were unique in that we “told it like it is”, naming car dealers who wronged car buyers. Our show, Earl Stewart on Cars, provided a community service to the south Florida area and was, in many people’s opinion, the most important show on SeaView. 

As you know, in all the years that we were on the air, neither SeaView nor Nancy and I were sued by any car dealer for what we said to our audience. This indisputable fact speaks volumes. Any lawyer will tell you that the truth is the perfect defense against libel and slander. Every week, we implored car dealers and employees of car dealerships to call into our show and have their fair say. I promised to allow them to speak as long as they wished and encouraged then to tell me if I said anything that was untrue. Only a very few dared call to criticize us but a few car dealers did call to compliment us. I always said that there are honest, ethical car dealers, albeit too few. I kept a list of recommended car dealers and a list of those I don’t recommend. I used the information from my weekly shopping report to decide.

Through Chet Tart and your advertising salesmen, you have been threatened often over the years by car dealers. They called Chet Tart and they told your advertising salesmen that they would either cancel their advertising unless you got rid of Earl Stewart on Cars, or that they would never advertise unless you did so. Chet would tell Nancy and me about these threats, but he also always told us that he supported and defended us and that he thought that our show was an asset to SeaView and to our community. He bragged about our very strong ratings; sometimes we were actually the #1 radio show in the South Florida market for our time slot and demographic. We were almost always in the Top Ten. Advertisers clamored to be on our show because of its strong ratings.

Although we paid for separate advertisements on SeaView, we never paid for our show, “Earl Stewart on Cars”. I told Chet, that we did not want our show to have the stigma of an infomercial. All of the other talk shows on SeaView either pay for their air time or are responsible for bringing in advertisers. We did neither. Chet even agreed to pay us a token amount for the show, even if it was only $1.

Jim, you’ve been in the broadcasting business a long time, just like I’ve been in the car business a very long time. We’re about the same age. I’m not saying that older business owners are always smarter than the younger ones, but I honestly believe that oftentimes we are wiser. Wisdom comes with experience and we’ve both had a lot of that. One thing that experience has taught me is that when I make a mistake, I shouldn’t be afraid to admit it. I found that is not only better for my business but better for my brand image because it earns the respect of my employees and my customers. 

I sincerely and respectfully believe that you made a mistake in canceling our show. I’m basing my opinion, not on the fact that I believe it was ethically wrong although I do, but because it is economically wrong. It would be easy for me to say that you should reinstate our show because our show was a strong benefit to the community and you should not cave in to threats by car dealers who are a problem for the community. But, I’ve owned and operated businesses for 46 years and there are times when you have to put survival first and principle second. This is probably one of those times for SeaView. I’m well aware that SeaView is struggling financially and you owe its survival, not just to yourself but the other stockholders and SeaView’s employees and their families. I’ve experienced similar situations with companies I’ve owned and operated. Survival trumps principle.

This is why I’m asking you to consider that cancelling our show is a bad economic decision for SeaView for the following reasons: (1) Earl Stewart on Cars had a lot of listeners and our audience was growing regularly. Chet, Nancy and I discussed syndication of the show on several occasions and most recently we discussed expanding the show to two hours from one. (2) The public and especially our listeners don’t like what you did to Nancy and me. Since I’ve gone public with our being “fired”, the response has been huge and totally in our support. They don’t understand that you feel you had to do this and, let’s face it, some in your organization don’t understand it either (although they are afraid to say so). This negative PR is very bad for business. (3) Most South Florida Car dealers don’t like me. It’s a distinct possibility that most of them who told Chet Tart or your salesmen “Fire Earl Stewart and I’ll advertise on your station” were lying to you. They may have been telling you this just to get back at me. It will be interesting to see how many car dealers Chet and your sales force are able sign up now that I’m gone. Wouldn’t it be tragic if you lost your best talk show and didn’t get any advertising from those dealers who told you they would come back!  Clearly, the best management decision for SeaView in the long run, is to reinstate “Earl Stewart on Cars”.  

You’ve already received a letter from my attorneys telling you that if you don’t bring back my show, I “will be left with no choice but to pursue whatever legal remedies are available to me.” Believe me, Jim, when I tell you that nobody hates litigation and lawyers more than Nancy and me. Litigation is always a last resort with me. If this was just about SeaView and Earl and Nancy, we would have just shaken off the hurt and surprise and walked away. But it’s about tens of thousands of loyal “Earl Stewart on Cars” listeners who rely on our show every week for advice on “how not to get ripped off by unethical and dishonest car dealers”. We can’t let them down and we won’t.

Please call me so that we can meet personally and privately to resolve this…just you, Tricia, Nancy and me.  My office number is 561 844-3461 and my cell phone number is 561 358-1474. We’ll all apologize to each other and work together to make SeaView Radio one of the leading radio stations in the market.


Earl Stewart