Earl’s Suggested Word-Track for No Hassle/No Haggle 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 it 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 a very strong will, stamina, and a very thick skin should attempt this face-to-face. 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.Switching the type and price of the vehicle you’re buying (bait and switch) 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 actually paid to the state government. I will not pay dealer fees by any name such as electronic filing fees, 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 like 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. “ Furthermore, I will expose you on Facebook, Google, Yelp, Twitter and any other form of social media I can think of.

(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, 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.”

Hidden Fees and Accessory Charges Defeat Buyers’ Online Buying Advantage

For years I’ve advised car buyers to go online to get the lowest price on new or used vehicles. Online, you can avoid the haggle and hassle of dealers’ game-playing when you’re inside the dealership. Online, you can even maintain anonymity by not giving them your real phone number and giving them another email address. Car dealers know that they have just one chance to sell you a car and if their price is too high, they may never hear from you again.

As the percent of cars bought online has soared, car dealers have had to “adapt” in order to maintain their profit margins. This “adaptation” amounts to lying about the prices they give you online. They give you a very low price, lower than their competition’s, to which they later add thousands of dollars in hidden fees and dealer installed accessories.

I use the word hidden fee rather than dealer fee because dealers learned long ago that car buyers were becoming more aware of the hidden profit named “dealer fee”. Some dealers advertise “No Dealer Fee” because they renamedtheir dealer fee something else. Dealers name their hidden fees whatever they choose…usually something that sounds like an official government fee. Some commonly used examples are “tag agency fee”, “electronic filing fee”, “e-filing fee”, dealer services fee, “administrative fee”, “documentary (doc) fee”, “dealer prep fee’, etc. Most car dealers employ multiple fee of this nature totaling at least $1,000 and some over $3,000.

Dealer installed accessories are added to the vehicles but not included in the price you get. These accessories cost the dealer very little and they mark them up as much as 1,000%. Examples are nitrogen in the tires, pin stripes, window tint, floor mats, paint sealant, fabric protection, road hazard insurance, emergency road service, etc. The total extra profit to the dealer for these averages at least $1,000.

Third party buying services can be the best way to buy a vehicle. Consumer Reports, American Express, GEICO, True Car, AutoTrader, Car Guru, and Cars.com are all legitimate companies that try to obtain the lowest prices for their members and users. However, all of these companies are deceived by their dealer members when they quote customers their supposedly low price. A buyer can go on AutoTrader to buy a specific year-make-model vehicle and sort by lowest price. The car dealer that comes out first should have the lowest price. But what the buyer doesn’t know is that this car dealer is adding thousands of dollars to the price in hidden fees and dealer installed accessories. TrueCar advertises that their TrueCar price includes hidden fees and dealer installed accessories, but that claim is only as good as the honesty of their dealers. Third party buying services deal with well over 10,000 car dealers and it’s impossible to inspect and be sure that they all are playing by the rules. The fact is that most car dealers do not play by the rules.

This all means that the responsibility for getting an honest price lies with you, the car buyer and it’s BUYER BEWARE, CAVEAT EMPTOR. Whether you’re dealing through a third-party buying service or directly online with a car dealer, burn this term into your brain, OUT-THE-DOOR-PRICE. Never set foot into a car dealership without previously obtaining a written document stating the full, complete out-the-door price of the vehicle you’re buying. The only legitimate, honest fees that should be added are government fees of state sales tax and license plate/registration. To be absolutely safe, ask that all fees (including tax and tag) be included in the price they give you. A good way to clarify this and be certain they can’t pretend like they misunderstood…tell the dealer you’re bringing a check from your bank or credit union marked PAYMENT IN FULL.

Negative Equity

(aka "Upside Down" & "Underwater")
You’ve probably seen a lot of car advertisements claiming, “WE WE’LL PAY OFF YOUR OLD CAR, NO MATTER HOW MUCH YOU OWE”! This is a lie, because no car dealer every pays of your car for you; you pay off your car because the dealer adds the payoff amount to the price of the car that he’s selling you.

The Wall Street Journal recently (11-11-19) featured a front-page story, “Car Debt Traps More Drivers”. The article begins “John Schricker took out a loan to buy a car in 2017. Then he took out another. And then another. In two years, the 40-year-old electrician signed up for four auto loans, each time trading in the previous car and rolling the unpaid balance into the next loan. He recently bought a $27,000 Jeep Cherokee with a $45,000 loan from Ally Financial Inc.”

This practice has been going on as long as there’ve been car dealers, but it’s worsened in recent years due to sharply increasing car prices with sharply reduced dealer profits on new cars. Car prices are soaring from the revolution in digitalized electronic safety features, but dealers’ profit margins have shrunk from the increasingly educated 21stcentury consumer, armed with the Internet and online buying. 33% of new car buyers that traded in their old car so far in 2019 owned more on their trade-in than its actual value, compared to 28% five years ago and 19% a decade ago, according to the Wall Street Journal.

Due to car dealers’ reduced ability to make large profits on the sale of new cars, they are focusing on their finance profits. Finance profits are enhanced by the sale of extended services contracts aka warranties, pre-paid car maintenance, GAP insurance, road hazard and roadside assistance insurance, and a litany of other overpriced and usually unnecessary services and products. Car dealers make more money in their F&I (Finance and Insurance) departments than their new car sales departments. Adding the negative equity from car buyers’ trade-ins to the loan on their new cars further enhances the dealers’ profits in their Finance and Insurance Departments.

Many new car buyers with negative equity in their trade-ins are not aware of it, and car dealers don’t bring it to their attention for fear of losing the sale. The facts are revealed in the sales and financing contracts which most buyers don’t read carefully or understand. Most car buyers are focused on one thing…their monthly payment. If a dealer can offer a monthly payment close to their current payment, this usually satisfies the buyer. Dealers can often do this by extending the terms of the loan to a much as 72 months, surprising the buyer with a large down payment, or “flipping” the buyer to a lease.

All the above is why new car buyers should make a point of completely understanding all the numbers of their purchase or lease transaction. This is best done by separating the new car purchase into (1) establishing the actual value of the trade-in compared to the payoff to the bank, (2) knowing the out-the-door selling price of the new car, and (3) the best interest rate, down payment, and terms usually obtainable from their bank of credit union. Car dealers finance most of the new cars they sell through kick-back arrangements with their banks. These interest rates and terms are usually not best for the buyer.

Should I Buy a Car or Have a Colonoscopy?

If you’re over 55, you should have had a colonoscopy. If you haven’t, call a gastroenterologist, because this could save your life; It did mine, but that’s another story. I had another colonoscopy (about a half dozen, so far) a few days ago, and I must tell you that it’s a very unpleasant experience, mainly from the mental anguish, anticipation and the discomfort of the “preparation” the previous day. I had a lot of time to think about my procedure and I started thinking about how this experience parallels that of buying a car. It’s something you must do and has a very good benefit, but you dread the process.

If you need further proof that buying cars is an unpleasant experience, just read the latest Gallup Poll entitled HONESTY AND ETHICS IN PROFESSIONS. The Gallup organization has been taking this poll every year since 1977. Car dealers have ranked last, or nearly last, in every poll…FORTY-THREE YEARS! For the latest full year poll in 2018, click on
https://news.gallup.com/poll/1654/honesty-ethics-professions.aspx.

My newspaper columns and blog consist mainly of suggestions and inside information that can make your new or used car buying experience less of a fearful one. Some of the titles/subjects are “Always Get an Out the Door Price”, “Bait and Switch Advertising”, “Beware of Deceptive Internet Car Pricing”, “Beware of Direct Mail Car Advertising”, “Buying a Car When You Have a Credit Problem”, “Eight Steps to Ensure You Are Buying the Best Car for the Best Price”, “List Price and MSRP Might Not Be the Same”, “Negotiating to Buy a Car”, “Open Letter to Florida Car Dealers” (I, II, III, and IV), “Shop Your Financing and Trade”, “Should I Buy My Car at the End of the Lease?”, “Should I Lease or Buy my Next Car?”, “Should I Pay Cash or Finance My Next Car?”, “Should I Trade in My Old Car or Sell it Myself”, “Tell Your Car Dealer to be Nice”, “The Right Used Car is a Better Buy than a New Car”, “Translating Misleading Car Ads”, “What is the True Cost of that New Car?”, “What to do if You Are Treated Badly by a Car Dealer”, “When is a Car Sale Not a Car Sale?”, and “The Internet Price is the Lowest Price for a New Car”. You can read all my articles (hundreds) at www.EarlOnCars.com. You’ll find links there to listen to my live, weekly radio show (Saturdays 8-10 AM EST), my YouTube videos, Podcasts, Facebook, Twitter and a wealth of other information on “how not to get ripped off by a car dealer”.

Almost every one of these articles originated from readers of my column, callers to my radio show, and others’ experiences when buying cars from car dealers. I get a lot of calls from people who’ve never bought a car from me. They call to tell me of their bad experience with another dealer and, when I get several calls on the same subject, I write a column on it. People often call me asking for advice or assistance after they’ve already bought, which is “closing the barn door after the horse is gone.” On more than one occasion I’ve called car dealers asking them to consider undoing a wrong they have caused one of their customers. I must confess that my batting average on this effort is “below 300”. I won’t give up, however. One of my most recent calls was from a customer who was charged nearly a $1,000 in service work performed on her car when she had brought it in for a routine service that should have cost her less than $100. She called me for help and was forceful and diligent in following my advice. She got a complete refund on the “unasked for, unnecessary charges”.


One thing that amazes me about these weekly columns and my radio show is that I have been writing and airing for nearly 14 years is that no car dealer has ever called me to complain, or for any other reason. I’ve not been sued either. I think that says something about the truth of my articles. I’m not a lawyer, but I do know that you can’t successfully sue somebody for libel or slander if they write or say the truth. I’m puzzled why not one single dealer would call me just out of curiosity. I don’t have a secretary and I don’t screen any of my calls…nor do any of my employees. They do know how successful my dealership is and how fast my sales are growing. They know that I’m selling a lot of their former customers. Many of these new customers tell me how they told the other dealers why they chose to take their business elsewhere. I believe that before too much longer we will see some changes in the way other car dealers do business even if they refuse to call me, as I have repeatedly invited them to do. Sooner or later they will understand that treating your customers with courtesy and integrity is just plain good business.