Open Letter to Car Dealers

“VENDITOR CAVE!” (Seller Beware)

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.

Yours truly,

Earl Stewart

Cell phone (561) 358-1474

OPEN LETTER TO ASHLEY MOODY

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.

Yours truly,

Earl Stewart
Cell phone 561 358-1474

Avoid Six Pitfalls When Ordering a New Car Instead of Buying from Dealer’s Inventory

We’re into our third year of one of the most significant changes in human society, caused by the worldwide covid pandemic. The auto manufacturing and retailing businesses are just two entities that have been greatly impacted. New vehicles are in a shorter supply than ever before. Auto demand and prices are at historic highs, and dealers have virtually no vehicles in their inventories. If you can wait to buy a car, you should wait until prices come down. If you must buy a new car today, you’ll probably have to order it. If you buy today from dealers’ practically nonexistent inventories, you’ll have to pay thousands of dollars above MSRP and accept a car that doesn’t fully meet your needs or desires.

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.

Get it in writing from your dealer that you can cancel your order and get your deposit back at any time for any reason and that the dealer cannot cancel the order and must honor the original price with respect to MSRP. If you negotiate a price under, at, or (most likely) over MSRP, the dealer is legally obligated to sell it to you at that price OUT-THE-DOOR PLUS GOVERNMENT FEES ONLY. It’s possible that the MSRP is raised by the manufacturer over which the dealer has no control. His cost goes up and it’s only fair that the dealer passes this along, But you also have the right to cancel the order if you choose to.

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.