Monday, September 19, 2022
Car dealers have been the retailing arm for auto manufacturers for over 100 years. Auto manufacturers needed dealers to grow as rapidly as they have, beginning with Henry Ford and the Model A. Henry’s invention of assembly line production allowed him to build far more cars than he could possibly sell from his manufacturing facilities, and it would have been too expensive and cumbersome to build his own network of retail outlets, hence the birth of the franchised auto dealer.
When Ford, Gm, and Chrysler built dealership net works all over the USA, they had total control over their dealers. The car dealers were only able to sell cars under the terms and conditions of short-term contracts named “franchise agreements”. These contracts were very short-term and one-sided, favoring the manufacturers. Manufacturers could cancel a dealer’s contract for almost any reason and the dealers had virtually no legal recourse. Manufacturers could add as many dealerships in each geographic area as they wanted, and this put extreme financial pressure on the dealers. Dealers were given unrealistically high quotas of numbers of cars they must sell each month. If they failed to meet their quota, their franchise was cancelled and they went out of business, bankrupt in most cases.
But the dealers fought back by forming dealer associations and lobbying their state legislators to make laws protecting them from their manufacturers. The car dealers in each state became one of the largest employers and taxpayers. The state politicians realized that this meant car-dealer support was necessary for their reelection. Slowly, but steadily, laws were passed in all 50 states making it impossible for auto manufacturers to cancel their dealers’ franchise contracts. These state franchise laws made it virtually impossible for auto manufacturers to control their dealers. Originally dealership franchises were one year in length. This evolved to two years, then six years, and today are mostly perpetual. Manufacturers can’t tell a dealer how he can advertise, price his cars or service or what disreputable sales tactics he employs to sell cars. If a dealer chooses to sell his franchise to someone else, the manufacturer had very little say as to who that can be.
However, the manufacturers retain one significant power over their dealers. Because the manufacturer builds the cars, they can build and offer as many as they want to all of their dealers. By flooding any given market with too many cars, each of their dealers has little choice but to accept and buy all the cars they’re “offered” by their manufacturer. If a dealer declines to accept and buy all the new vehicles his manufacturer asks him to, his competitor dealers selling the same make will accept them. Because there’s such a large proliferation of models, colors, and options on every make of car, the car dealer with the smallest selection loses sales to his competitor with the larger inventories.
This artificial condition of too-large inventories should be good for you, the car-buyer. In fact, it is for the educated, sophisticated consumer who can see through and overcome car dealers aggressive and deceptive sales practices and advertising. However, for the average buyer, this artificially over-inventoried situation orchestrated by the manufacturers, forces car dealers to “do whatever it takes” to sell their over-supply of cars. “Whatever it takes”, unfortunately translates into what you know car dealers are guilty of today, bait and switch advertising and unfair and deceptive trade practices. The proof of this is Gallup’s annual poll on Honesty and Ethics in Professions, conducted every year since 1977. In each of those 45 years, car dealers have ranked last or next to last of all businesses.
The last 2 ½ years and the advent of the Covid pandemic drastically reduced the artificially high auto inventory standard. Today, car dealers have virtually no inventories and prices have soared to historic highs along with car dealer profits. The law of supply and demand worked perfectly. Car dealers’ average profit per car soared from around $1,500 per car to about $10,000 per car. The new car volume has shrunk slightly but the leap in profits more than overcame this. Car dealers are higher profits in their new car departments than ever before in their history. Manufacturers also raised their prices to their dealers by virtually eliminating dealers cash incentives as well as customer incentives. Don’t think that the auto manufacturers and dealers don’t look at the Covid Pandemic as an economic blessing in disguise. You can be sure that manufacturers and dealers are thinking about the future and how they can maintain the obscenely high profits per car as they are enjoying today.
The obstacle to achieving a lower supply of cars promoting a higher price and profit per sale is competition…the consumer’s best friend. The manufacturers are as insanely competitive as their dealers. Ford wants to outsell Chevrolet, Honda wants to outsell Toyota, etc. By building as many cars as they can and forcing them on their dealers, they hope to outsell their competition. Dealers, on the other hand, would prefer not to return to the days of breaking even and often losing money in their new car departments. Many of them might even like to retail their products with honesty and transparency, not having to sell as many cars as the manufacturer, subtly but forcibly, requires the dealers to buy from them.
The knowledge and science explosion combined with the Covid pandemic has thrust the world into an accelerated change unprecedented in human history. The auto industry, manufacturing, and retail is right up there at the peak of this change. The vehicles and how they will transport us in 20 years will bear little resemblance to today. Will GM, Toyota, Honda, Ford, and all the manufacturers be selling to us directly like Tesla does today? Will car dealers be extinct?
In my opinion, car dealers could be a better answer than buying directly from the factory. This probably surprises many of my regular readers who know what I think about today’s car dealers. I’ve also spoken highly of Tesla and their factory direct policy of selling their cars. I feel this way only because to the lack of honesty and transparency by most car dealers. They’ve made the buying experience a nightmare for most buyers. I liked the Tesla buying experience (I bought one for my wife, Nancy, and me) and almost all Tesla buyers compliment the no hassle, no haggle fully transparent buying experience.
Most people don’t know that Tesla marks their cars up above their cost much higher than any other auto manufacturer. They can do this because they have very little competition. They dominate the EV market and, if you want the best EV and a pleasant buying experience there’s no one else you can buy from. Tesla has virtually no competition. Competition is usually a buyer’s best friend.
It should be the same way with car dealers because they are extremely competitive. The reason car dealer competition is NOT the car buyers’ best friend is that car dealers are unregulated and uncontrolled and that they are, to some extent, forced into this M.O. by their manufacturers forcing them to buy more inventory than the can sell in a fully transparent an honest matter. Again, I reiterate that this is normal times, pre-covid and, hopefully, post-covid.
My recommended solution to the problem is to require our regulators to enforce the laws on the books against unfair and deceptive trade practices and for our federal and state law makers to pass any additional necessary laws to protect car buyers from predatory car dealers. This solution gives car buyers all the benefits of strong competition keeping car prices down without the fear of high pressure, dishonesty, and lack of transparency.
Monday, August 29, 2022
We car dealers have had a pretty good “run for our money”. The first car dealership was established in 1897 by William E Metzger, but didn’t only gained momentum after Henry Ford figured out how to mass produce cars in 1908 with the Model T. That’s 114 years ago. My father, Earl Stewart Sr., born in 1892, started his dealership in 1937. I started in business with him in 1968 at Stewart Pontiac Co. in West Palm Beach, FL. Today, my family and I operate a Toyota dealership in North Palm Beach.
Monday, August 15, 2022
If you’re a regular reader of this column or a regular listener to our live radio weekly talk show, we thank you very much. However, we believe that our advice to you “regulars” is like “preaching to the choir”. Nancy, Rick, Stu, and I often comment during the radio show (Earl on Cars; 8-10 am EST Saturdays) that we learn as much from our callers/texters that they learn from us. Our regular listening and reading audience are mostly smart, savvy consumers. In fact, that’s why we formed www.EarlsVigilantes.com, a group of educated consumer volunteers to advise those less informed in their communities about how to buy, lease, maintain, and repair their vehicles without being taken advantage of.
This column is just another attempt to reach those who most need our and your help when “dealing with car dealers”. Our followers know that car dealers have been ranked last or next to last since 1977 on the Gallup annual poll on Honesty and Ethics in Professions (Google it for more details).
Before the COVID pandemic, the “Earl on Cars” team was “on the road”. We regularly spoke at public libraries, service clubs like Kiwanis and Rotary, public schools, women’s and men’s clubs, condominium groups, seniors’ associations, and just about any group that needed our help. With the pandemic more under control, we’ve begun venturing out again. Last week we spoke before the Wellington, FL Rotary club and we’ve accepted an invitation to speak at the Computer Club of Valencia Falls in Delray on February 9. I, Nancy Stewart (my wife and co-host of Earl on Cars), and Rick Kearney (Certified Diagnostic Master Auto Technician) comprise our public speaking team.
We would love to hear from your group if you’d enjoy having us as guest speakers. We typically offer advice on how buy or lease a vehicle as well as maintain and repair it without being taken advantage of by a car dealer. There’s no charge, of course. We offer our advice to your group, just as we do in this column and our radio show (we’ve been doing this for about 20 years). In full transparency and disclosure, I’ve owned a Toyota dealership since 1975, but our advice is purely as consumer advocates to help your group. I promise we will, in no way, endeavor to “sell you a car”.
We’re accepting speaking engagements in South Florida for the remainder of 2022 and all of 2023. Naturally, we can’t accommodate every request, so we’ll be more likely to accommodate the earlier requests. Please call 561 612-6606, and give my assistant, Diane Dorsey, the complete information for the speaking engagement. This should include the time and date (if possible, one or more alternatives), name and location of your group, contact information, approximate number of attendees, and any specific auto topics you’d like us to focus on. The time length of our speaking engagements typically vary from 30 minutes for luncheon meetings to an hour.
We hope to meet and talk with you and your group in the near future.
Monday, August 08, 2022
As you know, auto sales dealerships are the only retail companies that allow their products’ markups to be determined by the salespeople. The upper management and owners of all other retail companies set the prices of their products to their customers. A car salesman is compensated and motivated to mark up the profit margin on the car he sells you “as much as he can get away with”. On any given day, the exact same MSRP, year-make-model car is sold at widely varying markups to different buyers. The shrewd, experienced negotiator-buyer might buy a new car close to MSRP, but a more gullible, inexperienced buyer could buy $10,000+ above MSRP. In today’s uniquely low supply, high demand automotive environment, car salespeople and dealers are making more money when they sell you a car than ever before in auto-retail history, about 100 years!
It's unethical, immoral and it should be illegal to sell the same product to every buyer at a different price determined by the buyer’s gullibility and inexperience. This is usually correlated to a buyers’ age, education, sophistication, and comprehension of the English language. Our civil rights laws protect certain classes of people against various kinds of discrimination. Interest rates on car loans are even covered by these laws; Why aren’t they also protected against outrageous markups on cars that are sold to others at much lower prices?
A car dealer that allows his salespeople to mark up each car he sells as high as he can get away with is guilty of discrimination, pure and simple. This needs to be codified into law by our lawmakers and enforced by our regulators. Ironically, our lawmakers and regulators are members of the privileged class that gets the lowest prices. In fact, one could make the argument that the unrealistically lower prices they’re able to command, may even cause other buyers to pay more. What kind of a “deal” do you think a governor, senator, or congressman gets when he or she buys a car, compared to your price? How about an Attorney General or the head of the County Office of Consumer Affairs?
All car dealers should be required by law to post the out-the-door price on every car they sell and sell every car to every customer at that price. The legal definition of the out-the-door price should be “a price with no added charges except government fees (sales tax and license plate). The governor of the state or the President of the United States should have to pay the same out-the-door price as you and me.
Monday, July 18, 2022
There’s a very good chance that the warranty on your new car is for a shorter time than you thought. This likelihood is much greater since the COVID crisis precipitated the microchip and other parts shortages, limiting production while consumer demand and prices climbed to all-time highs.
The featured Op-ed story in a recent Automotive News (the auto industries trade journal) was entitled “Yes, a car must be delivered to count as sold.” What the editor of this op-ed was alluding to was that many car dealers are lying to their manufacturers about the number of cars they’re truly selling, in order to “earn” more production from the manufacturer than they are entitled to. All auto manufacturers calculate the number of cars they sell and ship to each dealer by the number of cars that dealer “sells”. The only way that a manufacturer knows that a car is sold by a particular dealer is when that dealer emails his retail daily reports (RDR’s) which include the customer’s name and VIN of the vehicle purchased. It’s important that dealers report sales every day for any vehicles he sells, because a replacement vehicle is then shipped immediately.
Most dealers, most of the time, have falsified these Retail Sales Reports to get new inventory ahead of their competitive dealers, especially with high demand/low supply vehicles… like the Corvette, Subaru WRX, and most hybrids. Most dealers have always reported these sold, whether they were or not as soon as they learned the VIN. This deception is motivated purely by greed to receive new cars the dealer is not entitled to because the factory believed the dealer was really selling and delivering them to a buyer. The car may not be truly sold for weeks or months after its reported sold to the manufacturer.
The big problem for the real car buyers with all of this is that the manufacturer began the “new car warranty clock” ticking as soon as they received the dealers bogus retail sales report. If you bought one of those, and it’s very likely you might have, your new car warranty will actually end days, weeks, or even months before what your new car warranty promises. If you had a transmission problem today and you supposedly had a 5 year/50,000-mile warranty, you’d have to pay out-of-pocket because the dealer had lied to his manufacturer about the true sale date, weeks, or months earlier.
Your best protection against this is to ask the dealer, before you pay for the car, to show you the dated retail sales report he sent to his manufacturer. That date should match the day you take your new car home. If it doesn’t, your options are several. You can insist that he correct this false report to show the current date. He may be reluctant to do this because the manufacturer will penalize his new car allocation based to bogus sales reporting. You can contact the manufacturer directly and expose the dealer’s deception. Of course, you can simply refuse to buy the car. A final option would be to get a written commitment from the dealer to repair anything that should have been covered by warranty that wasn’t because of his deception. Remember that this commitment would be good only for this specific dealer. If you were out-of-state and had to go do a different dealer, you’d be out of luck.
Monday, June 27, 2022
Dear Governor DeSantis,
You probably don’t know me, but I’m a native Floridian, born in Ft. Lauderdale in 1940. I’ve owned and operated Earl Stewart Toyota in North Palm Beach since 1975, after beginning in the car business as a Pontiac dealer in 1968. For about the last 20 years I’ve evolved into a consumer advocate for car-buyers, advising them how to buy a car in Florida without getting ripped off.
I became a consumer advocate for car-buyers because I came to realize that my chosen profession as a car dealer was regarded by the public as the most dishonest and unethical of all other professions. Governor, did you know that the Gallup Annual Poll on Honesty and Ethics in Professions has ranked car dealers at the bottom or next to the bottom for the past 48 years? The honesty and ethics of car dealers in our state, Florida, is the worst of all 50 states. Florida is the beast; South Florida is the “belly of the beast”.
Governor DeSantis, I challenge you to find one price advertisement for a new vehicle in Florida that is honest. In other words, one that allows you to buy the car for the ad price (excluding only the government fees of sales tax and license plate). If you can do this, I’ll write an apology to you and the car dealers that advertised those prices.
Only car dealers are allowed by Florida’s regulators to get away with this. All other retailers comply with Florida laws to advertise real prices without hidden fees or extra, undisclosed options. The two largest retailers in World, Walmart and Amazon comply. Check Florida Statute 501, section 976, actionable, unfair, or deceptive acts or practices and you’ll confirm that virtually all Florida car dealer price advertisements are illegal. They’re illegal, not only by Florida law but federal law, the FTC. The Federal Trade Commission prohibits any fine print that will serve to increase the advertised price.
Your Attorney General, Ashley Moody, should be acting against all car dealers violating Florida and federal laws. Other AGs in many other states are acting, including against Florida car dealers. Why do Floridians need to rely on an Attorney General from Arizona to discipline Ed Napleton, a Florida car dealer?
By the way, Governor, I’m a realist and pragmatist. I understand how politics work and I know what it takes to get elected. I have my problems with politics and politicians, but our system is the greatest on the Planet and every day I’m thankful to be an American. I think you’re missing a huge opportunity by not coming down on dishonest, unethical car dealers. Most voters’ own cars and must do business with car dealers regularly. Most voters also fear and/or despise their experience…” I’d rather have a root canal than buy a car”. If you became a champion for the car buyers of Florida and the nation, you’d garner a lot of admiration and thanks, maybe resulting in the casting of their votes for you for he next President of the United States.
The Recovering Car Dealer
Monday, June 20, 2022
Fewer than 1 out of 5 vehicles involved in crashes are repaired at a dealership certified by the manufacturer of that vehicle. Most insurance owned body shops and independently owned body shops will use the cheapest fenders, bumpers, roof and door panels and other crash parts to repair your car. These parts aren’t made by the manufacturer of your car and are often Imported from other countries. No other countries have as strict and safe requirements regarding the manufacturing of auto parts than the United States.
The dealer for the manufacturer of your car can buy original equipment parts from the manufacturer for about 40% less, than a non-dealership operated body shop. Therefore, he has the motivation to use the best and safest parts to repair your car. Non-dealership body shops must buy the parts to repair your car form dealership of that make. Of course, the dealership marks up the price well above his cost. Therefore, these non-dealership body shops usually buy cheap, non-safety tested parts overseas.
Monday, June 13, 2022
Participate in a Class Action Lawsuit to Repay You
Almost one-third of all vehicles on the road are leased. All lease contracts include an option to purchase the vehicle at a price predetermined by the leasing company.
Many lessees don’t know about their option to purchase at a specific price. Those who do know are usually unaware that the dealer and leasing company cannot increase the purchase option price included in the lease contract. In fact, this is common practice by almost all car dealers and the leasing companies are almost always complicit in this violation of the federal Consumer Leasing Act of 1976.
The violation of the law has been very common, perhaps because few people asked to exercise this option. In the past 2 ½ years, with the advent of the Covid pandemic, more people are leasing, and far more people are exercising their option to purchase. This is because the prices of all used cars have soared!
You also have an opportunity to participate in a national class action suit which may be filed against Ally Financial and Ally Bank Lease Trust. If you leased Chevrolet, Buick, GMC truck, Cadillac, Jeep, Chrysler, Dodge or Mitsubishi, you probably used Ally. If you’ve been told by your car dealer that you must pay a price higher than the purchase option amount on your lease contract or if you’ve already done so, you have a cause for action.
A South Florida resident, Moshe Katzburg, will represent the class action, and you can join in. Email Moshe Katzburg at firstname.lastname@example.org with a complete description of how you were taken advantage of…dealer’s name and information on the car you leased and the purchase option price. Describe the extra charges above the option price that the dealer insisted on. Mr. Katzburg would prefer email but will speak to you if you need to call. His cell phone number is 845-323-6143 and you may text him there also.
Monday, June 06, 2022
Have you ever wondered why 95% of all drivers routinely exceed the speed limit? Not only do most drivers wantonly exceed most speed limits, but it’s also often dangerous if you don’t speed when everyone else is. According to Bankrate.com, the average speeding fine in most states is only $150. This cost is relatively low to the average car owner, and a driver’s odds of being the one pulled over by the police are miniscule. The result of these low, “slap-on-the-wrist” traffic fines that are rarely administered is that virtually every driver speeds and traffic deaths and injuries are very high.
Regular readers of this column know about the recent “slap on the wrist” given a large auto dealer group owned by Ed Napleton. The FTC settled with the Napleton group, 71 franchises in 7 states for $10 million for allegedly cheating his customers out of $70 million. That’s a “pretty good deal” for Napleton…700% return on his “investment”. Oh, and guess what? My EarlOnCars.com mystery shopper went into two of his South Florida dealerships after he was fined and learned that he’s still deceiving his customers for the same things that he settled with the FTC for!
The May 30, 2022, edition of Automotive News (the trade journal for all auto dealers and manufacturers) features an editorial entitled “Weak Fines do little to deter bad behavior”. They mentioned Chrysler Corp., now known as Stellantis, pleading guilty in the federal courthouse over fraudulent emission testing. Chrysler-Jeep-Dodge/Stellantis will pay $300 million in penalties. Now, I know that sounds like lots of money to you and me but compare this to the $2 billion that Volkswagen agreed to pay in 2017 for the same crime. The $300 Million settlement by Chrysler-Jeep/Stellantis represents “29 hours” of their North American first quarter revenue!
There is a concept in our law called “Punitive Damages”. All businesses fear this when they’re sued because the amount of the fine is left up to a jury and the amount of the fine can’t be covered by insurance. The jury is instructed by the court to take into consideration the extent of the crime and the net worth of the company or individual charged. That means that punitive damages for you or me would be far less than those for Elon Musk or Jeff Bezos for the same crime or bad behavior.
This principle should be incorporated into all fines and penalties. Why should a working mom, struggling to make ends meet pay the same fine as Warren Buffet? By the way, Warren Buffet, himself, says that his “secretary” pays more income tax than he does. Folks, there’s something seriously wrong without system of laws and fines.
As most of my regular readers know, most car dealers have been breaking the same laws on advertising and sales practices repeatedly for nearly 100 years. Their powerful lobbyists protect them from new laws to protect car-buyers, the enforcement of old laws already on the books, and minimize the fines when they are caught.
Monday, May 30, 2022
Recently, a woman and a mother called into my weekly radio talk-show, "Earl on Cars”, and told us of a bad experience her young son had in purchasing a new car. He purchased a new Kia and brought it home for his mother to see. She asked him how much he’d paid for the Kia, but he was “kind of vague” about the numbers. She asked him to show her the “paperwork” from the purchase, vehicle buyer’s order and instalment sales contract. He reached into his pocket and handed her a “thumb drive”. In case you’re not familiar with a “thumb drive” (many people aren’t), it’s a device about 2” X .5” X .25” that stores digital data. You can only read this data if you insert the thumb drive into your PC (assuming your PC has a slot to do this; some don’t). This also assumes that you were savvy enough to accomplish the technical steps to insert the thumb drive in the right place and make the proper keystrokes on the PC to bring up the information. The son didn’t even own a PC and the mother didn’t know how to read the thumb drive on hers.
They went to the Kia dealer and learned that her son had paid $6,000 more for the new Kia than he’d been led to believe he was paying. When they both strongly objected, the sales manager told them that his son had signed the vehicle buyer’s order and installment sales contract and taken delivery of the new Kia. He told them that there’s nothing he could do because the sale was legally consummated.
When I first heard this on my radio show, I didn’t believe that this was a legal sales transaction because there hadn’t been FULL DISCLOSURE. Full disclosure is the most important part of contract law. It simply means that before a transaction can be legally consummated between a buyer and seller, both parties must have totally and transparently disclosed all the terms of the sale. My son, Stu Stewart, who is a member of the Earl on Cars team (along with Nancy Stewart and Rick Kearney) told me that other car dealers were also handing customers thumb drives. He said that this is all just part of the digital revolution and online buying.
After the radio show, I called an attorney that represents the Florida Auto Dealers Association, FADA, named Alex Kurkin. He told me, much to my chagrin and disappointment, that a thumb drive is considered full disclosure when purchasing anything, including a car. I was very surprised and disappointed.
There is the “letter of the law” and there’s the “spirit of the law”. In my opinion, giving a buyer a “thumb drive” violates the spirit of the law, because many people today can’t see and read what the seller has given them to describe all the terms of the transaction, especially the full out-the-door PRICE.
It's hard enough to understand all the terms and conditions of buying a car when full disclosure is in writing on paper. When the seller makes this information “invisible” on a thumb drive that can be seen only by someone who is digitally savvy about thumb drives and PC’s.
Humans are caught up in a whirlwind of technology unlike anything seen before in our history. With the Internet, Google, PC’s, smartphones, artificial intelligence, quantum computing, the Cloud, and the Metaverse, many humans were left behind in the twentieth century. The law must not allow these older, perhaps less educated people to be victimized (accidentally or on purpose) by car dealers or any other businesses. All buyers should be given a paper copy of all details of every purchase transaction.
Monday, May 23, 2022
The media in America is unlike that anyplace else in the world. You might dislike the media because you don’t agree with their political leanings or their dwelling on the bad news vs. good, but there’s one thing we can say good about the American media…they can be, and are often highly critical of our political leaders, powerful companies, and most anybody they choose to target. Freedom of the press is very real and powerful in the USA. Today we talk a lot about “fake news”, exaggerated news, and focusing on the sensational and worst news. But we all know that our media is “head and shoulders” above what we see in Russia, China, and many other countries.
When our forefathers wrote the Declaration of Independence and our Constitution, they wanted to guarantee freedom of the press against tyrants, meaning our government and its leaders. Maybe they didn’t foresee what the elements of capitalism, which also set America apart from most other countries, would have on honesty and transparency in the media.
The media in America are made up of digital, print, audio, and video generating companies that are part of our capitalistic society dependent on earning a profit by selling a product or service. If a newspaper, radio station or a TV channel is to survive they need to sell advertising and/or subscriptions. This means that large advertisers wield heavy influence on the media in which they advertise, whether it be Facebook, Google, local newspapers, radio stations or TV channels.
I personally experienced this phenomenon a few years ago when my radio show, Earl Stewart on Cars, on Seaview radio in North Palm Beach was canceled because the local car dealers threatened to boycott advertising on the station if Seaview continued to broadcast my show on “how not to get ripped off by a car dealer.”
This is especially true of local media. For example, in South Florida if you turn on your TV to a broadcast channel, you’ll likely see a car dealer, lawyer, or a pharmaceutical company advertisement. Without this advertising revenue, these TV channels might go broke.
A couple of weeks ago, I received a call from investigative reporter, Jeff Weinsier, of WPLG, Channel 10 in Ft. Lauderdale. He’d read some of my blogs and seen some of my YouTubes on how not to be taken advantage of by car dealers and asked if I would agree to be interviewed on WPLG, Channel 10. I agreed, did so, and the TV spot aired a short time ago. The subjects were “Why are car dealerships adding extra fees to those buying out their leases and Did you pay a dealer fee when buying out your lease” If so, you’re entitled to a refund, attorney says."
I told the WPLG reporter, Jeff Weinsier, at the time of the interview, how much I respected and admired WPLG for having the courage to go after dishonest car dealers. I told him that I’d been interviewed often by reporters on this subject only to have the story quashed by the TV station or newspaper’s editors. In fact, this happened a few years ago at WPLG. I think we were both a little surprised and relieved when our interview was allowed to air.
If you’re driving a leased car today (about one-third of all drivers are), you can purchase your leased car back from the leasing company at the end of the lease for a very low price, thousands below the actual value. You have an option to purchase the car at the price the leasing company anticipated before the covid pandemic and resulting spike in used and new car prices. The Consumer Leasing Act of 1976 by the Federal Trade Commission guarantees that you can buy your leased car at the option price and that the dealer cannot add any additional charges to the option price. You do have to pay the state’s government fees for sales tax and license plate.
There are two lawyers now in the process of suing a lot of South Florida dealerships for violating the Consumer Leasing Act. Almost all car dealers are breaking this law too and if you are being victimized, you can call either of these two lawyers to help you: Joshua Feygen at 954 697-0357 or Jonathan Kane at 954 523-5123.
Hopefully more TV channels and other media will have the courage to follow the lead of WPLG Channel 10 in Ft. Lauderdale. Virtually every car dealer in Florida including Palm Beach county, all the way north to Duval county, Jacksonville, are violating the Consumer Leasing Act and many other laws on unfair and deceptive trade practices.
Monday, May 16, 2022
Leasing has become more and more popular, and today about a third of the cars on the road are leased. If you leased your car two or more years ago, the leasing company didn’t know what was going to happen to the price of new and used cars as the result of the COVID pandemic.
The main variable that determines the size of your monthly lease payment is the depreciation of the vehicle you’re leasing. The total depreciation is calculated by subtracting the estimated value of the leased car at the end of the lease from the cost of the new vehicle. To some extent, leasing companies must “look into their crystal balls” and estimate what the market value of the new car they lease you will be worth as a used car in 3 or 4 years. There are guidebooks for residual values based on historical supply and demand for different makes and models of vehicles. But these studies didn’t anticipate the Covid pandemic and resulting surge in demand and supply chain stoppage that sharply reduced supplies, especially of vehicles.
Today, you should check the residual value of your lease that is on your lease contract. It’s not prominently displayed and will require some searching on your part. You should then compare this amount with the current market wholesale value of your leased vehicle. It’s easy to get this today because of the huge demand and low supply of used cars. All car dealers are frantically looking for and buying used cars. New companies have sprung up during the pandemic to exploit the high demand and low supply of used vehicles. Some of the new ones are www.WeBuyAnyCar.com, www.Carvana.com, and www.Vroom.com. www.CarMax.com has always been a good place to sell your used car. Include the used car lot for the dealer that sells the make you’re leasing. Get at least three bids to maximize the price you’ll get. You might be able to buy your leased car for thousands of dollars less than what you can immediately resell it for.
The biggest problem you’ll encounter is buying your leased car back from the leasing company at the promised option price. This is because you must go through a franchised dealer for the make of car you leased even though you’re buying it back from the leasing company. There are some leasing companies that will sell you your car back directly, but most require you go through a franchise car dealer for that make.
Almost without exception, the car dealer will try to add profit for himself to your purchase option price, amounting to thousands dollars. You should object strongly, check with other dealers of your make to see if they will be honest with you and call the leasing company directly. The leasing company, even if they won’t buy it directly, can direct you to a dealer who won’t take advantage of you.
Recently, lessees in South Florida have sued two dealers, Gunther Volkswagen, and Brickell Motors for adding profit for themselves to the purchase option prices in their lease contracts. This was reported last month by investigative reporter, Jeff Weinsier, for WPLG, Channel 10 in Ft. Lauderdale. The attorney representing the two lessees is asserting the law that states you cannot charge anything extra for an off-lease car that’s not in the initial lease agreement. The two attorneys suing these dealers are Josh Feygin and Jonathan Kane in case you have a problem with your option to purchase.
Thousands of unwary lessees are returning lease cars to dealers and leasing companies daily and losing the large profit opportunity, thousands of dollars, because they didn’t know or remember they have an option to purchase their lease vehicles at the end of the lease. Please spread the word if you have a friend who’s leasing.
Monday, May 09, 2022
I’ve been writing this column and doing a weekly radio show for about 20 years. I often wonder why more people and groups don’t join in to help car buyers buy, lease, and maintain their cars without being taken advantage of. Whenever someone new comes along, I welcome them with open arms, and I congratulate Ray and Zack Shefska for co-founding this group in 2019. Their timing couldn’t have been better…pre-covid and the onset of the greatest auto dealer feeding frenzy, exploiting their customers in over 100 years.
I stumbled across YAA when a regular viewer and listener to my radio show on www.YouTube.com/EarlOnCars, Donavan from West “By God” Virginia contacted me. He’s one of our show’s regular and best-informed callers/posters. He had high praise for YAA and soon I received more emails and posts from educated consumers who were members of YAA.
YAA has a highly educated and competent staff of people including Arash Sohelli, PhD and software developer who was also a cofounder. Other staff members specialize in areas like negotiating and pricing, but most of the expertise comes from input of members, real life experiences. YAA reports on dealer’s pricing, sales, and advertising tactics nationwide. There are helpful videos and you can report your personal experiences with dealerships which appear for all members’ perusals.
There’s a free membership available and a paid one. YAA also sells extended warranties for vehicles. They say they derive all their revenue from these to sources. I checked out their pricing on their new car warranty for a new Camry and compared it with the warranty from my warranty company. It was considerably lower than mine, but at the time I’m writing this column, I haven’t had a chance to fairly compare the coverages of these two extended warranties. I will do this and report back to you.
I have a good feeling about YAA and I’m hoping we can work together and grow together to help you, the car buyers of America. You’ll be hearing more about YAA this Saturday morning on my radio show between 8 and 10am EST. You can view it at www.YouTube.com/EarlOnCars,www.Facebook.com/EarlOnCars, or www.StreamEarlOnCars.com. You can listen on radio at TuneIn radio.
I’m inviting Ray and/or Zack Shefska to call my show this Saturday. The show's number is 877-960-9960, so please give us a call to discuss!
Monday, May 02, 2022
I Feel Your Pain
I’m sure you read the April 11 Op-Ed in our auto industry trade journal, Automotive News. You were probably as shocked as I, when you read it. However, you were shocked by the fact that the Automotive News dared to reveal our industry’s dirty little secret in writing, not about the facts of the article, entitled No room for predatory fees, racism in retail, but about the fact that our trade journal dared speak the truth. In the highly unlikely event that you didn’t read this op-ed, just click on this link, www.AutoNewsOpEdPredatoryFees.com.
Kudos to Keith E. and K.C. Crain, Auto News editor emeritus and publisher. You’re shining examples of what journalism should be, speaking the truth no matter what the consequences. The Automotive News derives virtually all its revenue, advertising, and subscriptions, from auto manufacturers, auto suppliers, and auto dealers. You “bit the hands that feed you”.
I’m unsure of how many of you know me. I’ve been a car dealer since 1968, including franchises for Pontiac, Mazda, Toyota, Peugeot, Fiat, and even Checker. I currently have only one dealership, Toyota in North Palm Beach, FL. In addition to my dealer hat, I wear the hat of consumer advocate for car-buyers. You can check out my credentials at www.EarlOnCars.com or read my book, Confessions of a Recovering Car Dealer (available on Amazon). If you Google Earl Stewart, you’ll find I’m quoted often by media, Wall Street Journal, Associated Press, Auto News, CNN, CBS, NBC, FOX, etc. I’m pretty sure that I’m quoted so often because I’m easily reachable by cell phone and not afraid to speak my mind (like the recent Auto News Op-Ed).
I understand why auto manufacturers have not been more proactive in pushing their dealers to “clean up their act”, but I’m sure that most folks outside our industry don’t understand. As auto manufacturers know, car dealers have actively lobbied in laws through their state legislatures protecting them against you, their manufacturer. When the auto franchise system began, car dealers existed at the whim of the manufacturer. The manufacturer said “jump” and the dealer said, “how high?” You could cancel a dealer’s franchise and replace him or eliminate the franchise entirely for almost any reason. Now, it’s virtually impossible for you to replace or cancel a dealership franchise. The verbiage you use is, “we can’t tell our dealers what to do because they’re independent businessmen”.
There’s another reason why your dealers treat their customers so badly that they rank last in the Gallup annual poll on Honesty and Ethics in Professions. Many of your largest volume dealers are also some of the most dishonest and deceptive. Most auto executives’ compensation and promotions are tied to auto sales volume. There are few industries that are more competitive. All auto makers fiduciary responsibility to their shareholders is higher sales volume and profits. You rely heavier on your big volume dealers to make this happen. You’re afraid to “bite the hands that feed you”.
There’s a third reason why you auto manufacturers have “sat on your hands”, watching your franchised dealers embarrass themselves and the entire auto industry. That reason is that the retail auto business has become so dominated by dealers that employ unethical, deceptive, and even dishonest advertising and sales practices that most want-to-be honest dealers feel compelled to compromise their integrity to survive. A franchised dealer selling Fords or Hondas in his marketplace believes that he cannot advertise prices that are substantially higher than his competitors. His competitor is advertising Fords or Hondas for thousands of dollars less than you (and he) can afford to sell one for. Customers attracted by his advertisements pay hundreds or thousands of dollars in addendums to the MSRP, hidden fees, and junk dealer-installed accessories. The educated consumers who catch this deception, can’t even get a final, official lowest price unless they buy the car then. There’s no other retail product that refuses to give their potential buyers a firm, out-the-door price. This deprives car buyers of their basic, American, economic right to shop and compare product prices.
The final reason that your dealers are out of control and invulnerable is their enormous lobbying power. We hear a lot about “Big Insurance” and the NRA, but car dealers (17,968 as of 2022, most of whom are millionaires), their PAC’s, and their state and national associations pack enormous financial clout. Elected and appointed state regulators and legislators know better that do go after franchised car dealers.
So, here’s my suggestion to you auto manufacturers. You’re all very smart men and women and you know that your industry is going through enormous changes like EV’s and autonomous vehicles. But the biggest change that doesn’t get as much press is the cultural and educationalchanges in your customers. Tie this to the information explosion with the Internet, the Cloud, quantum computing and AI. I know you’ve sensed this which has accelerated in the past 2 ½ years with the COVID pandemic and soaring demand and affluence of your customers. Yes, your profits and your dealers’ profits have NEVER been greater, but the buyers’ ire over being taken advantage of has never been greater either. We’re hearing a lot more about bad car dealers than ever before. Some of you have publicly spoken out and I salute you for that. I’ll bet a lot of you watch the financial news on CNBC. I’ve seen Jim Farley, Bob Carter and other top auto executives apologetically commenting about the behavior of their dealers. You won’t admit this, but most of you have wondered if auto manufacturers will one day sell directly to the consumers like Tesla does. All fifty states have laws against this that were lobbied in by your dealers, and that’s why you haven’t done it a long time ago. If Elon Musk figured out a way to sell direct, I’m betting that you’re working on a plan of action now. Elon was telling the truth when he was quoted as saying he “never had a pleasant experience buying a car”.
Monday, April 25, 2022
Dear Car Dealer:
We’ve all heard the popular legal expression “Buyer Beware” or “Caveat Emptor” in Latin. In the 21st century we’re seeing a renaissance of educated consumers, regulators, legislators, and media. Most of you know me, and most of you don’t like me. You’ve probably read articles about me in your weekly trade journal, Automotive News. One of my favorite articles was entitled, “Do-Gooder or Pariah” way back in October of 2008. This month, Automotive News’ featured Op-ed on the Opinion page was entitled NO ROOM FOR PREDATORY FEES, RACISM IN RETAIL. Virtually every auto manufacturer and car dealer in the World reads this weekly newspaper. The dirty little secret that the Gallup annual poll on Honesty and Ethics in Professions has been trying reveal for 45 years is finally being exposed by your very own trade journal. Car dealers have ranked last, or next to last, out of all businesses in this Gallup poll since 1977.
Just in the past month, two longtime and large dealer groups, Napleton and Koons have been charged and exposed by federal and state regulators. As I write this article, car dealers and auto manufacturers are making record profits by charging thousands of dollars more for each new and used car you sell. Selling cars for thousands of dollars above MSRP isn’t illegal, but it’s called the attention of the federal and state regulators, media and even some auto manufacturers about the things you’ve always been doing that are either illegal, unethical, or immoral.
In fairness, I must add that there are a few (very few) car dealers that do treat their customers with honesty and transparency. Many “want-to-be” be honest dealers feel as if they’re forced into lowering their standards to compete and survive. I hear, “If my competitors are advertising cars below the true price that they’ll sell them for, how much business will I attract if I don’t do the same?” These “want-to-be” honest dealers are almost as frustrated as I that our state regulators, legislators, and auto manufacturers won’t enforce the basic rules of honesty and ethics.
Well, Mr. Dealer, the “worm has turned”. The manufacturers are worried about their dealers’ terrible reputation with their customers. They also see the amazing success of Tesla, the only auto manufacturer that sells directly to their customers. Elon Musk was recently quoted as saying that, before he started Tesla, he had “never had a pleasant experience with an auto dealer.” Federal and state regulators are beginning to take notice and action, as you’ve seen with the charges against the very large Napleton and Koons dealer groups. Even the media is gathering the courage to speak out. TV, newspaper, and radio which were the dealers’ main choice for advertising are no longer. It’s mostly digital. Newspapers, radio, and TV stations no longer must fear being boycotted by dealers’ advertising when the media speaks honestly about their illegal, unethical, or immoral behavior.
It's a good time to change the way you’re doing business. You’re making higher profits than you’ve ever made. Charge as much as you want for a car, but don’t add hidden “junk fees” and worthless add-on, (dealer installed accessories). Give your customer the honest out-the-door price. Allow your customer to take your best price and shop and compare it with your competition. If you don’t do it now, you’ll never do it. If you don’t clean up your act, you’ll see the day that the dealer franchise system is replaced by the manufacturers selling directly to your customers, just like Tesla does.
Cell phone (561) 358-1474
Monday, April 18, 2022
Dear Madam Attorney, General:
I write this open letter to you to call your attention to the recent actions by the Federal Trade Commission against the eight Napleton dealerships in FLORIDA, Illinois, Pennsylvania, and Missouri. The FTC accused the Napleton auto dealerships of taking $70 million in illegal fees from customers. The FTC in cooperation with state attorney generals, charged Napleton with sneaking illegal junk fees for unwanted “add-ons” onto customers’ bills and for discriminating against Black consumers by charging them more for financing. Of course, Napleton vehemently denied any wrongdoing and settled the FTC suit for $10 Million.
Madam Attorney General, the two Napleton dealerships in Florida, included in the charges and settlement, are Napleton Kia and Napleton Hyundai in Palm Beach County. As you may know, my wife, Nancy, and I host a weekly consumer-advocate 2-hour live talk show. It’s named “Earl Stewart on Cars” and airs on 95.9 FM and 105.9 FM 8-10 AM EST. Each week we “mystery shop” a different car dealership, mostly in Florida. Our last mystery shop was of Napleton Kia on Northlake Blvd. in North Palm Beach. We discovered that he is still, even after being charged by the FTC and settling, sneaking illegal junk fees for unwanted ‘add-ons’, onto customers’ bills, as well as displaying many other unfair and deceptive sales practices.
But my main reason for writing you is to let you know that the Napleton dealerships in Florida are only a few of the hundreds of auto dealerships that are getting away with unfair and deceptive trade practices in their advertising and sales tactics. I suggest you go online and choose a few dealerships at random. Send in your own mystery shoppers and try to buy a car at the advertised price. I’m sure you’re aware of Florida Statute 501.976 which states “The advertised price must include all fees or charges that the customer must pay…”. I believe that you will find very few car dealer ads that comply with this Florida law.
If you’ll click on my blog website. www.EarlOnCars.com, you can read hundreds of mystery shopping reports, most of which reveal unfair or deceptive acts or practices by car dealers.
I invite you to appear as my guest on Earl Stewart on Cars any Saturday morning or call the show (877 960-9960). Please feel free to call me anytime on my personal cell phone, 561 358-1474.
Cell phone 561 358-1474
Monday, April 04, 2022
The smartest thing to do for those that must buy a new car now, is to order it from the manufacturer. The car you want most likely hasn’t been built yet and hasn’t been assigned a VIN (vehicle identification number). The dealer will most likely just take a deposit from you and the only paperwork you’ll receive, if any, will be a “worksheet” showing the price which should include all factory and dealer installed options dealer fees, and government fees. This worksheet probably isn’t a legal document and it’ll state this in the fine print…something like “This is a worksheet and not a legal vehicle buyer’s order”. This means that neither you nor the dealer has a legal obligation to enforce the purchase. You need a legal document that obligates the dealer to sell you the car at the agreed upon price but does not obligate you to buy.
These are the reasons that you should insist on a signed legal document, obligating the dealer:
- Your new car may be sold to someone else when it arrives at the dealership. The price you negotiated to pay 3 months ago when you ordered your new car may be a lot lower than a customer who happened to be there when your car arrived on the car carrier. This means a bigger commission for the salesman a bigger profit for the dealer. Because new cars are in such short supply, you may find out that your new car was sold by “mistake” to somebody else. You should closely monitor the progress of your ordered new car. Insist that you are regularly updated on it’s progress. If it arrives when you’re unaware, the odds increase greatly that it may be “accidentally sold” to someone else at a much higher price.
- The manufacture of your new car might be delayed indefinitely. With the microchip shortage and the wire harness shortage, it’s possible that some cars simply may not have the critical parts to manufacture.
- The dealer may decide to raise the price of your car. Without a legal document to force the dealer to honor your price, he would certainly be tempted to raise it, if he could sell it to other customers for a lot more money.
- Prices of new cars may drop, so you don’t want to be obligated to buy it above the current market price; but you want the dealer to be obligated to sell it.
- You may find a better price from another dealer while waiting for your car to arrive. It might take months for your car to arrive, and this gives you lots of time to shop your price.
- You might just change your mind about buying a car. Think about it…lots of things can change in the 3 to 6 months your may wait for your new car to arrive, like health or economic issues.
You might be thinking, “will a car dealer really agree to put all this ‘stuff’ in writing?” Most will because an ordered car is plus business. If you’re buying a new car from his very small inventory, he won’t budge an inch on his price way over MSRP because somebody will come in right after you and pay his price.
Monday, March 28, 2022
“I’m Mad as Hell and Not Going to Take it Anymore!”
I think you’ll agree with me when I say that bad things mostly happen when the perpetrators don’t think others will find out about it. We’re lucky we live in a country which makes a “thing” out of freedom of speech. Our media is free to say whatever they like and so are we. Some think we err on the side of too much freedom of speech and too much media. Even though I might agree, I’d rather have too much than too little.
I’ve been a car dealer for over half a century, and I can tell you that dealers’ lack of ethics and their preponderance of dishonesty hasn’t changed much since 1968. The Gallup Annual Poll on Honesty and Ethics in Professions backs me up on this, https://news.gallup.com/poll/388649/military-brass-judges-among-professions-new-image-lows.aspx. Car dealers have ranked at the bottom of this list since the first survey in 1977!
Sadly, bad behavior by car dealers isn’t trending any better for a variety of reasons. When bad behavior is readily allowed and unregulated for a long period of time it becomes the status quo. It has inertia…the tendency of an object in motion, to remain in motion. Think of driving on the typical expressway. No matter what the posted speed, the actual flow of traffic is at least 10 mph faster. Why? That’s for two reasons. The first is that every driver knows that they can “get away with” driving 10 mph over the speed limit. The second is that it’s somewhat dangerous to drive at or below the speed limit. All the other drivers will pass you, blow their horn, or nearly “rear-end” you. How many cars have you bought in your lifetime? How many of those purchases were a pleasant experience? If the Gallup poll is accurate, probably none of them.
This happens because our laws against false advertising and unfair and deceptive trade practices aren’t enforced. They’re not enforced because of the powerful lobbying influence of car dealers. It’s no coincidence that “lobbyists” sit at the bottom of the Gallup poll with car dealers. Almost all dealers are guilty of this bad behavior for the same reason that almost all motorist’s speed. If a car dealer did obey the laws when his competitors didn’t, he couldn’t effectively compete and eventually he’d be forced out of business.
The only way I know to change things is get the attention of our legislators and regulators by arousing the car-buyers who are also VOTERS. There’s only one thing that can influence a politician or a regulator more than a lobbyist with fat pockets for supporting their reelection. That’s you, the voter. Almost all voters have bought cars and most likely had nothing but bad experiences. We need to begin talking about this more. Here are some suggestions:
- Call or text my weekly radio show, Earl on Cars. You can stream the show on Facebook or YouTube, www.Facebook.com/EarlOnCars or www.YouTube.com/EarlOnCars. You can call the show at 800 960-9960 any Saturday morning between 8 and 10 EST.
- File your complaints against car dealers with your state’s attorney general or department of motor vehicles.
- Contact your local media, especially those who feature consumers’ advocate journalists.
- Check out this website, www.Markups.org. This is a new website that allows you to report your car dealers’ markups above MSRP and post a picture of their addendum label. I just learned about this and posted a $5,000 window sticker addendum used by Wallace Cadillac in Stuart, FL, https://markups.org/Cadillac/wallace-cadillac.html.
I think another reason why car dealers have been able to operate for so long “in the shadows” is that many car buyers don’t like to admit that they’ve been taken advantage of. We all want to believe that we made a good buy and, maybe even more importantly, we want our friends and neighbors to think so. By “shining the cold light of day” on car dealers’ bad behavior, more people will realize their friends and neighbors were also “screwed” and are also remaining silent.
Please help me end the silence.
Monday, March 21, 2022
They’re Middlemen that Broker Finance Contracts to Banks
Some readers of my column may already know this, but it’s surprising to me that many don’t: Car dealers lead their buyers to believe that they’re financing your purchase. After you buy your car, you’re led to the finance office. The inside vernacular term for the finance office amongst dealers is “THE BOX” (my illustration above is from the classic film “Cool Hand Luke” as Paul Newman is led into "The Box"). They take your credit statement and ask you to sign finance contracts.
What they don’t tell you is that they sell that finance contracts to the real bank at large markup. They also sell you services like pre-paid maintenance, GAP insurance, and extended service agreements, which they add to the finance contract that they sell to the bank. Normally the profit from their markup to the bank is far more than their profit on the car they just sold you. AutoNation, the largest auto retailer in the USA, averages over $2,000 per vehicle sold on brokering their customers’ finance contracts to banks.
My advice to you is to eliminate the dealer-broker, the middleman, and finance your car directly with the bank or credit union. You can pocket that average $2,000 kick-back your dealer receives from the bank by getting a much lower interest rate and not being sold overpriced warranties and maintenance contracts. Also, remember that $2,000 is an average profit on all cars sold. Some buyers (too few) are savvy enough to finance their purchase with their bank or credit union and others pay cash. In reality, the profit per dealer brokered sale closer to $4,000.
You should check with your bank or credit union before you buy your next vehicle. This way you can shop banks just like you shop for your car. You can get preapproved for the amount you intend to finance. Knowing your interest rate and terms before you buy your car arms you against the pressure from the salesman and dealer finance manager who will try to persuade you to finance your through the dealer. Telling the salesman and finance manager that you have a low interest rate from your bank or credit union will save you a lot of time and aggravation. Be aware that most dealers don’t refer to their “finance offices” as such, they tell you it’s the “business office” where you need to “complete your paperwork”.
There’s an exception to choosing to not financing your next purchase through the dealer. That’s for a new vehicles when the manufacturer offers an unusually low interest rate…as low as zero percent. Usually, the manufacturer offers either a cash discount or the low rate. You should do the math, and calculate which is best. Financing for a longer term with less money down skews your decision toward the low rate vs. cash discount.
Monday, March 14, 2022
I wrote a column on May 24, 2008, entitled “Stop Complaining about Gas Prices”. As you know, here we go again…soaring gas prices but for some different reasons. The good news is all vehicles’ gas mileage has improved considerably in the last 14 years, and we have a lot more hybrid vehicles, and even a few all-electric. I’ve made a few changes and updated my first column, but it’s still essentially the same advice.
“God grant me the serenity to accept the things I cannot change, courage to change the things I can, and the wisdom to know the difference”. Whether you think our gas prices are soaring because of a conspiracy of the giant oil companies, speculators on Wall Street, OPEC, the war in Ukraine, President Biden, ex-President Trump, or Vladimir Putin (or all the above), there’s not much you can do about it. I thought it might be useful to suggest some things you can do about lowering your total cost of fuel even if you can’t lower oil and gas prices.
- Burn the lowest grade octane fuel in your car without causing a ping or knock. Even if your car’s owner’s manual recommends high test, there’s a good chance you can drop down one or two grades of octane and your engine will run just fine. Today’s engines are so sophisticated that they can automatically alter the way the engine runs to accommodate different octane fuels. There are lots of factors that affect how your car runs on a particular grade of fuel like ambient temperature and ethanol content. You can even experiment with mixing octanes. Buying a lower octane will save you several cents per gallon.
- Keep your tires inflated about halfway between the recommended inflations by the auto manufacturer and the tire manufacturer. The higher number is stamped on the tire by the tire manufacturer and the lower inflation number can be found in your owner’s manual. The auto manufacturer number is very low, because he wants the car to drive smoothly. The auto manufacturer doesn’t worry about tire life because that’s guaranteed by the tire manufacturer. The tire manufacturer’s number is the maximum inflation you should use.
- There’s a great app you can download, www.GasBuddy.com, that will show you the gas stations nearest your zip code with the lowest gas prices. I just checked my Gas Buddy app for my zip code, 33403, for price of mid-premium gasoline. The lowest price was $3.99, and the highest was $5.42. Buying the lower one would save me $8.60 on 20 gallons of gas!
- Drive slower! Some of you may remember how some states lowered speed limits on highways during an earlier energy crunch. You burn far less gas at 50 mph than 75 or 80. I’ll be the first one to admit that driving slower than the traffic flow can be “hazardous to your health”. Be sure to drive in the right lane and drive near the the speed limit.
- Learn how to drive your car for maximum fuel efficiency. It’s not uncommon for one of my customers to complain that they aren’t getting the gas mileage on their model Toyota that the EPA sticker on their car when they bought it says they should. We always check the mileage by having one of our technicians drive the car and measure the mileage. Usually, the technician gets as good or better gas mileage than the EPA estimate. This is simply because he understands how to drive a car for maximum fuel efficiency. One of my technicians, Rick Kearney, tells our customers that the best thing they can do to improve their gas mileage is to “reach down and take the brick out of their shoe”. 😊 He also suggests that you imagine there is an “egg” between your foot and the gas pedal. Anticipate stops and curves so that you don’t have to brake, but just take your foot off the gas pedal. For longer stops like waiting for a bridge to go up or down, or a train going by, turn off your engine.
- Check your wheel alignment and rotate and balance your tires every time you bring your car in for your car’s factory recommended service. Also, check your tire inflation that mention in #2.
- Many cars today have an “Eco Mode” alert light, typically green, on the dash which tells you that your speed is maximizing your fuel economy. Watch this and you can save lots of fuel.
- Lastly, if you own a hybrid vehicle (lucky you), you need to drive it differently than you would an all-gas-powered car. A hybrid gets better fuel economy in city driving than highway. This is because your hybrid automatically recharges its battery whenever you take your foot off the gas and decelerate. Stop and go driving causes poor gas mileage in a totally gas powered car, but increases fuel economy in a hybrid. When driving your hybrid on long highway trips, try to maintain a steady speed around 55 or 60 mph. Driving 70 or 80 will cost your fuel economy.
If you follow all these tips, don’t be surprised if you find yourself spending no more on fuel than you did before gas prices skyrocketed. You’ll also be driving a lot safer and feel less aggravation.