Don't Get Spotted!

This article was run previously. I apologize to those readers who have read this before, but I feel it’s necessary to rerun columns that focus on dangers to car-buyers that are prevalent. The situation described in the next paragraph motivated me to rerun this column.

Yesterday, I received a phone call from a young man whose wife had purchased a new Tundra truck from a Toyota dealership South Florida. She traded in her old car for a down payment and financed the truck at an interest rate of 5%. She happily drove the truck home and showed it off to her friends, neighbors, and relatives. About 3 weeks later, she received a call from the salesman at the dealership telling her that her credit had been declined by the bank. She was ordered bring the truck back and that the contract would have to be rewritten. The new contract had a substantially higher interest rate, raising the total cost of the truck by thousands of dollars. When she demanded her trade in back, she was told “they couldn’t find it”. I told the husband and wife to speak to the owner or general manager of the dealership and tell them that they would hire an attorney if they refused to reverse the deal and give them their trade-in back or honor the original contract.

When you bought your last new or used vehicle, did the salesman encourage (or even insist) that you drive your vehicle home that same day? The chances are very good that he did because Florida dealers and those in most other states have a firm policy of doing this. I’ll estimate that 90% to 95% of all cars sold in Florida are “spotted” which is the slang expression dealers have for this policy. A few states, like New York, make it illegal to deliver a newly purchased car until the tag, title, and registration process have been finalized which delays the delivery for a few days. As much as you may be tempted, these are 5 reasons you should not sign the papers and drive the newly purchased vehicle home the same day you decide to buy it. Some car buyers are under the impression that there’s a 72 hour “cooling off period” mandated by law that allows you to return purchases, but this is not true when you buy a car at the dealership. It applies only if you purchase the product in your home.



(1) If you’re financing the car through the dealer, there’s a chance that your financing has not been approved based on the same terms, interest rate, and down payment you agreed to. If you bought the car on a weekend or after 5pm, most banks and credit unions are closed. Even if you bought it earlier during a weekday, it can take a day or more for a bank to do a thorough credit
investigation and approval. If your credit is later turned down or the down payment, interest rate, or terms modified, you will be faced with the embarrassing necessity of returning the car and resigning a contract that will result in you paying more money than you had agreed to.



(2) Most cars, surprisingly, are purchased on impulse with emotion overcoming logic. The 2nd largest expenditure the average person makes in their life is for their car. This decision should be made with logic, not emotion. Logic dictates that one should spend several weeks studying the pros and cons of the many different vehicles available. The Internet offers a wealth of information. Should you lease or buy? Should you buy a late model used car or a new one? Which dealer offers the lowest price? Which dealer offers the highest price for your trade-in? Which bank or credit union offers the lowest interest rates and terms and down payment acceptable to you? You should never buy a vehicle without an extensive test drive.



(3) The dealer may be insisting that you take delivery immediately because he knows that this is the best way to force your emotion to overcome your logic. When you take your new vehicle home and show it off to your friends, family, and neighbors, you’re far more likely not to change your mind. Because you’ve left your trade-in with the dealer, you’re not going to be checking prices with other dealers. Taking you out of the market by keeping your trade in has a slang term among dealers…you’ve been “de-horsed”. Taking that new car home the same day also has a slang term…you’ve been “puppy-dogged”. Have you ever gone puppy shopping with your family and brought home a warm, cute, and cuddly puppy? What are the chances you’ll return her the next day because the price was too high?



(4) A legally binding contract must have “offer and acceptance.” Taking your car home completely binds the acceptance of the contract, if you signed one, and makes it far less likely that you will be able to get out of the deal you made.



(5) Unscrupulous car dealers will spot deliver cars knowing that the lender will not approve the low interest rate, low down payment, and longer terms that you have agreed to. They’re relying on the fact that you’ll fall in love with your “new puppy” and that you’ll brag to your family, friends, and neighbors how about the low price, low interest rate, etc. that you negotiated. When you get that call from the finance manager at the dealership a few days after delivery that you must come back to “take care of a little more paperwork”, you won’t hesitate. When you get there, you find out that you have to come up with a lot higher down payment, a much higher interest rate, and tell you that you have to buy an extended warranty because “the bank requires it”. Your monthly payment goes way up and so does the dealer’s profit. The dealers have a slang expression for this too…it’s called the “yo-yo delivery”.



If you find yourself in the position of being told to return your purchase because the bank requires a higher interest, higher down payment, or shorter terms be sure that you understand that you have no obligation to sign a new contract and keep the vehicle. Your contract is null and void. There’s even an argument to be made by you and your lawyer that the first contract is valid and that you can keep the car at the original terms agreed upon. You may have signed a paper, typically referred to as a “Rescission Agreement”, which purports to require you to return the car if the bank refuses to honor the contract as written. There are financial penalties if you don’t. This was common practice with all Florida car dealers for many years but court decisions, case law, has made this a very questionable practice. I hope that this never happens to you but if it does and you decide you want to keep the car under the terms of the original finance contract, I recommend you hire a lawyer.

Car Dealer Victim Profiles

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:

The elderly (often widows)

The very young, usually buying their first car

Those who don’t read, write, speak or understand English well, not born in this country

The less educated.

People with no or bad credit. 

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, 1940’s and 1950’s. Often, the husband was not only the breadwinner, but the decision maker in the household. Widows of that era are often buying or leasing 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 78 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 dementia can legally buy a car in Florida, and it happens all too often. Knowingly selling a car to a person with dementia is a despicable act that too many car dealers commit.

2. What chance does a teenager or a young person 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 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 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, marginal or no credit who must buy a car. 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. Who should be held responsible for car dealers ripping off customers? For categories one through five, 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 Reportsfor 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 the charity, Big Dog Ranch Rescue, www.BDRR.org . You can buy this book at www.Amazon.com. 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 at www.EarlOnCars.com. Or, how about tuning in my weekly radio show aired on 95.9 FM, 106.9 FM or 960 AM in North Palm Beach? It’s live talk radio from 10 am to noon Saturdays Eastern Time. You can also stream this show live onwww.Facebook.com/EarlOnCars or at www.StreamEarlOnCars.com. Call me during the show and ask any question you like.

Earl’s Suggested Word Track For No-Haggle, No-Hassle Car Buying

You can use this word track to buy a car online, via regular mail, over the telephone, or in person. I strongly recommend that you use online, but I know that some car buyers, seniors like me, are not as comfortable with buying over the Internet. Using this word track in person can work, but it will be much more difficult and take a lot longer. Only a person with very strong will, stamina, and a very thick skin should attempt face-to-face negotiation. I strongly recommend that you don’t.

1. Dear Car Salesman, “Within the next two weeks (enter your own time frame), I will be purchasing (leasing) a (fill in the specific make, year, model and optional accessories).” (You should carefully research the vehicle that you decide to purchase using all sources of information available such as Consumer Reports. You should also test drive the car to be sure it feels and drives the way you want it to. It is vital that you not change your mind during the purchasing process. If you do change your mind, you must begin all over again. Never let a car salesman change your mind for you. That is one of their favorite ways to charge you more money than you had anticipated paying.)

2. “Please quote me your lowest price on (your specific car). This price must be an out-the-door price with only state sales tax and the license tag fees paid to the state. To be sure there is no confusion, please understand that the only dollar amounts that I will pay in addition to the price you quoted are taxes and fees paid to the government. I will not pay dealer fees by any name such as electronic filing fees and tag agency fees.”

3. “I understand that my request may not be one you wish to comply with because you are concerned that I will shop and compare your price with other car dealers. Your concerns are valid because this is exactly what I will do. You may be asking yourself, ‘why should I do this if I know that my lowest price may not be low enough and that I will show it to your competitor to get an even lower price?’ My answer is quite simple; you may have only a small chance of winning my business if you do give me your lowest price, but you will have ZERO chance of winning my business if you do not, because you will never hear from me again.”

4.“I will sell my trade-in to the highest bidder, just as I will buy my new car from the lowest bidder. I will also finance my car at the lowest interest bid by a bank or credit union. If you can meet or beat other dealers and banks, I will trade my car into you and/or finance with you.”

5. “If you quote me your lowest out-the-door price and I come to your dealership to purchase my car, please don’t even think about: (A) Telling me that the car I specified was sold and that you would like to show me other cars just like it. (B) Telling me that the car I specified has some accessories/options that you installed like nitrogen in the tires, glass etch, pin stripes, floor mats, paint sealant, etc. (C) Telling me that you priced in rebates and incentives that I don’t qualify for like college graduate, military, customer loyalty, customer conquest, etc. (D) The price you quoted me is only valid if I finance my car through you. If you do any of these things, I will not only not buy from you, but I will report you to the Florida Department of Motor Vehicles, BBB, the County Office of Consumer Affairs, Florida Attorney General, and your manufacturer. “

6. “If everything goes well with no shenanigans, I will write a letter of commendation to your owner and manufacturer. I will also tell all my friends, neighbors, relatives, work associates, and club members about my wonderful experience with you and your dealership. I will also post recommendations on Google, Yelp, Instagram, Facebook, and Twitter.”

7. “The choice is yours and I hope that you see the benefits of selling me a car at the lowest price you can afford to give me. I also hope you can see the dangers of giving me a dishonest price so that you can get me into your dealership and try to charge me more than we agreed.”

8.  “I wish you the best of luck and I sincerely hope we can do business and have a long car buying and servicing relationship.”

If you apply this word track and do not vary from it or weaken to the car salesmen’s objections, you will buy your next new or used car for a very low price and without the haggle, hassle, and resulting anxiety and anger that you’ve experienced in the past. Good Luck.

Most Florida Car Dealers Break the Law Every Day

The following is part of Section 501.976, paragraph (16) of the Florida Deceptive and Unfair Trade Practices Act: “The advertised price of a vehicle must includeall fees or charges that the customer must pay...except “state and local taxes, tags, registration fees and title fees” …. In other words, ONLY GOVERNMENT FEES may be excluded from the advertised price of car in Florida.

I have been mystery shopping Florida car dealers every week for 14 years and I estimate more than 95% violate the law with all their vehicle advertisements.

Your reaction to this incredulous statement must be something like, “How is that possible?” Ask yourself if you’ve ever bought a car in Florida at the advertised price plus only sales tax and license and registration fees. If you dig out your paperwork and check, you’ll discover that you paid from several hundred to several thousand dollars more in hidden fees and dealer installed accessories.

Some car dealers don’t even mention the fact that they have hidden fees or dealer installed accessories on every vehicle they sell. Some will disclose in the fine print the fact that they do have a dealer fee, but they don’t mention theamount. If they do mention the amount in the fine print, this doesn’t comply with the law which says, “the advertised price must include all fees or charges the customer must pay, except government fees”.

Florida regulators are primarily responsible for letting this law be flagrantly broken by virtually every car dealer in Florida. The Florida Attorney General’s office know this is going on, but refuses to do anything about it. The last time I asked the Attorney General why they took no action, I was told that they receive very few consumer complaints. This doesn’t surprise me because this law has been violated and ignored for so many years that most car buyers don’t even know that hidden fees are illegal. I also must add that car dealers and their lobbying association, Florida Auto Dealers Associations (FADA) have strongly supported the election of every Florida Attorney General.

You would think that public awareness through the media, the fourth estate of government, would rally public outcry and eventually get the attention of the Attorney General…not so. Local auto dealers are among the biggest advertisers on radio, TV, and newspapers. If a local radio station, TV channel, or newspaper says something bad about a local car dealer, the loss of that advertising revenue could seriously affect their bottom-line. When was the last time you saw, heard, or read a negative story about a local car dealer? I never have, and I’ve been a car dealer in Florida for 50+ years.

With the rapid switch from newspaper, TV and radio to digital…Facebook, Google, YouTube, Instagram, and Twitter, there’s hope for us to spread the word. Talk about your last car buying experience on your favorite digital platform. Some of these could go viral and even the Attorney General might decide to act.