10 New Year’s Resolutions for Car Dealers in 2013

It’s hard to believe that we’re approaching the end of 2012. The older I get, the faster the time flies. This might be wishful thinking, but here’s another list of recommended ways that dealers should change for the better in the coming year. I know a lot of car dealers read my blog, my column, and listen to my radio show. You dealers should understand and  take responsibility for the fact that we rank ethically last among all professions, tied with politicians, lobbyists, and lawyers.

(1)   Eliminate your dealer fee. We had shown some progress in dealers eliminating their dealer fees in Palm Beach County. Palm Beach Toyota and Royal Palm Toyota dropped their dealer fee three years ago and Treasure Coast Toyota eliminated there’s two years ago. This was due, not to a “moral revelation” by the dealer or legislative action but economic pressure. Palm Beach Toyota, Royal Palm Toyota and Treasure Coast Toyota are my three nearest competitors. But unfortunately, all three of these dealers recently reinstated their dealer fee. In fact, Royal Palm and Palm Beach increased their dealer fee to $999. The only additional costs passed to your customer should be federal, state, or local taxes and/or fees like Florida sales tax. This is the generally accepted practice in retailing all other products and services. A price is quoted to your customer when you communicate a price in any fashion including advertising a price in the newspaper, radio or TV, painting a price on a windshield or sign, saying a price over the phone or in person, or giving a price over the Internet. Your “dealer fee” is profit for you. It is not a “fee” and it should be included in your price.

(2)   The buck stops with you. You are responsible for the actions of your employees. Your salesmen, service technicians and service advisors are virtually all paid on commission. If you do not police your people and hire ethical people your customers will be taken advantage of. If you are an absentee owner, as most owners of car dealerships are in South Florida are, you have to have someone running your store that knows and cares about what is happening to your customers. Your ignorance of the mistreatment of your customers is no more an excuse than being ignorant of a law when you break it. You may think you know how your employees are treating your customers, but I promise you that you don’t unless you communicate directly with some of them. You cannot rely exclusively on reports from your managers to tell you the truth.

(3)    Don’t advertise a car at a price that you don’t want to sell it for. If you advertise a car for a specific price, you should be willing and able to sell that car to as many customers as respond to the ad. If you run out of stock, give the customer a rain check. Also, pay your salesmen a commission on the ad cars. Now most of you don’t pay a salesman a commission if he sells the ad car. What do you think that salesman is going to tell the customer who comes in on the ad? If you run out of that model, you should give your customers a rain check. When you don’t do that, it’s called “bait and switch”.

(4)   Don’t insist or encourage your customers to buy and take delivery of their car on the same day. This is called a “spot delivery” in the trade. There are lots of thing bad about this. A car is the 2^nd largest purchase a person makes. The customer should be allowed time to reflect and think about this decision. Cars are often spot delivered when the credit has not been approved, especially nights and weekends when the banks are closed. Customer often have to be called back to sign another contract at higher payments, higher interest, and/or higher down payments. This is sometimes done deliberately because customers are often too embarrassed to tell their friends that they really haven’t bought that shiny new car they were showing off. Attorneys in other states have filed class action suits against car dealers and attorneys in this state are working on doing the same. 

(5)   Give customers who are” just looking” a price when they ask for it. It’s insulting to today’s sophisticated buyers to be told when they ask for the price that they can buy the car for, that they have to make an offer in writing with a deposit first. It’s also insulting when you tell the customer that you won’t give her a price until she’s “ready to buy”. Can you imagine being told this by a salesman at Best Buy when you asked the price of 50” Plasma TV? Your salesmen won’t give prices to your customers because they are afraid the customer will compare his price with the competition. This is what the free market place is all about! Customer should shop and compare. If you treat your customers with respect, integrity, and courtesy, they will return to you an offer you the right to meet or beat a lower price.

(6)   Don’t advertise discounts from “dealer list” price. When you mark up the manufacturer’s list price by thousands of dollars and then advertise a discount, you are misleading you customers. The federal government has a law that every new car displays a “Monroney label” [named after the U.S. senator who sponsored this bill] on the window when it is sold. The reason for this law is to give car buyers a fair, even basis for comparing prices between different dealers. By confusing your customers between “dealer’s list” and “manufacturer’s list” you are circumventing the law.

(7)   Don’t advertise lease payments that require large down payments hidden in the fine print. Most people lease cars to minimize their monthly payment. When your customer comes in on the ad finds out she has to pay $4,000 cash down to get the lease payment you advertised, it’s just plain wrong. There are some dealers who actually advertise prices with a qualification that the customer pays an additional sum first to get the advertised price.

(8)   Do not advertise that you can get anybody financed no matter how bad their credit. This is not true and just plain cruel, especially during these terrible economic times with very tight credit.

(9)   Don’t guarantee the lowest price with qualifications that cannot be met. Your qualifications are usually that you “reserve the right to buy the other car from the other dealer who beat your price” and that the customer must have a signed buyer’s order from the other dealership. You know that the other dealer will never agree to sell you that car and you also know that the chances of the customer getting out of the dealership with a signed buyer’s order without taking delivery are slim and none. Dealers reading this, I dare you to show me evidence that you have honored your guarantee with just one customer. I’ll make you a bet that you have never honored that guarantee.

(10)                       Don’t offer a minimum $10,000 [or some other high number] for every trade-in. Sometimes these ads, say “if you can push, pull, or drag your old car in we will give you at least $10,000 toward the purchase of a new car. You then mark up the new car so high; you are not really offering the customer anything more than the wholesale value, if that. 

Confessions of a Recovering Car Dealer

I’m excited and proud to announce the publication of my first book, Confessions of a Recovering Car Dealer! If you’ve been reading my blog or my Hometown News column for the last 7 years, I know you will really enjoy this book. Some subjects may be familiar, but I also have added tons of new information as well as lots of historically interesting pictures, dating from 1937 to the present.

Before you get mad at me for using this column to sell books, be aware that 100% of the selling price of my book is going to charity. Not only am I not making a nickel off this book, but I’m also including my cost of publishing in the amount I’m donating to charity. My purpose in writing this book is the same as my purpose in my Hometown News column and blog, to help you through the hazardous process of buying, leasing, and servicing your car. You can buy this book at my dealership, Earl Stewart Toyota of North Palm Beach, or you can buy it online by going to www.EarlsBook.com. You can charge it to your Visa, MasterCard, American, Express, Discover card, or use PayPal.

If you’re curious about my title, it goes to the fact that I wasn’t always a consumer advocate for car buyers. I’ve been a car dealer since 1968 and I used to be a lot like the very car dealers that I criticize today. Frankly, my advertising and my sales practices back in the day are things that I’m ashamed of now. I refer to myself as “recovering” in the sense that a drug addict or alcoholic is recovering. This column, my blog, and my radio show are like parts of the “Twelve Steps” of a recovery program. People ask me all of the time “What made you change?” but I can’t give them a simple answer.  It wasn’t an epiphany or an instant revelation, but more of an evolution. It might have begun when I sensed how much smarter and more sophisticated and demanding my customers were becoming. I know that my sons coming into the business had a major effect as did my second marriage.  My oldest son told me that he chose to come into the business with me because he could tell his children, my grandchildren, how proud he was to work at Earl Stewart Toyota. Fighting a successful battle against colon cancer several years ago also was a factor. There’s nothing like the realization of one’s mortality that puts the important and unimportant things in life in perspective. Lastly, I would chalk it up maturity. I’m one of those that believe we truly get wiser as we age. Notice I said “wiser” not smarter. There are a lot of young, very smart people but, in my opinion, they lack the wisdom of their elders. 

My book is divided into six sections. The first is “Research” which explains how you should go about deciding what type and make of car you should buy and how to select the right dealer from whom to buy it. Section two gets into the actual buying process. One chapter is entitled “Emotion is Your Enemy When Buying a car” and another is “Holdback is Holdup for Consumers”. Section three is “F & I (Finance and Insurance). Two of the best chapters are “Buying a Car When You Have a Credit problem” and “Should You Buy an Extended Warranty?” Section 4 is “About Used Cars”. If you read the chapter “Ten Tips for Buying a Used Car”, you’ll be forearmed and forewarned against making a huge mistake. Section Four is “Leasing”. More people get taken advantage of when they lease a car than when they buy. Read this section very, very carefully. Section six is “Service”. This is the longest section of my book because you spend a lot more time buying service and repairs for your cars than you spend buying the car itself. This section also addresses the body shop which you hopefully use very seldom but which can be very hazardous if you don’t understand your rights.

If you have a friend or relative who you would like to do a favor, why not consider making a gift of Confessions of a Recovering Car Dealer? It would make a great present for a son, daughter or grandchild. Most of the complaints on car dealers that I hear from callers on my radio show or read on my blog could have been avoided if the victim had been better educated on the car buying and servicing.  

New Car Warranty Repair Rights in Florida Under Attack by Manufacturers

There was an obscure legal decision made last month by Chief U.S. District Judge M. Casey Rodgers that if upheld, will make it much more difficult for you to have your new vehicle repaired under warranty by Florida car dealers.

In May of 2008 a state law was passed that required manufacturers to reimburse their dealers the same rates for warranty parts and labor that the dealership charges retail customers. Up until this time, only warranty labor was reimbursed to dealers at the same rate as the labor rate charged to customers. Immediately, the powerful lobbying group, Alliance of Automobile Manufacturers, AAM, filed a legal challenge to this law, attacking retail reimbursement for parts and labor. This powerful lobbying group represents 12 manufacturers including GM, Ford, Chrysler, Toyota, and Volkswagen. As you know, money talks and few lobbying groups have more money than AAM. Ironically, a lot of that money, at least from, GM and Chrysler, came from you and me, the taxpayers, when we bailed out these two companies not long ago.

Judge Casey’s decision issued last month said “Automakers’ claims regarding warranty reimbursement have merits and the case should move forward in court.” The AAM lobby charges that “the parts and labor reimbursement provisions violate the due process clause of the Florida Constitution and the contracts clauses of the U.S. and Florida constitutions.” That is legal gobbledygook created because they can’t come up with a real reason why this law isn’t a good and fair one for the car owner, dealer, and manufacturer, so they’ll look for technical loopholes in the law and “creative” interpretations of the Florida and U.S. Constitutions.  

As is virtually always the case, legal disputes are about money. For the automakers, warranty reimbursement to auto dealers is measured in billions of dollars annually. These billions of dollars comes out of the pockets of GM, Ford, Chrysler, Toyota, Volkswagen, and all other automakers and go into the pockets of their dealers. Shockingly, the only party that isn’t represented in this legal battle is you, the car owner. But you have a huge financial stake in this because, if the automakers prevail in court, you will find it much more difficult to get your car repaired under warranty by any car dealer in Florida. This doesn’t only apply to repairs but to “free maintenance” which most manufacturers are now touting for their new cars. You may even find yourself paying for warranty repairs and “free maintenance”.

I’ll explain. I’ve been a car dealer for 44 years, since 1968.  Back then, there were no laws requiring the automakers to reimburse their dealers for performing warranty work at a fair rate. As a consequence, dealers didn’t want to repair cars under warranty. The reimbursement was so low that they actually lost money or, at best, broke even. The amount of reimbursement by the automaker wasn’t enough to pay the technician for his work and cover the dealers’ overhead expenses. If you’re old enough, you remember that back then you could take your new car back only to the dealer from whom you bought it for warranty work. Your selling dealer had more motivation to do warranty work on y our car even though he made little or no profit because he did make a nice profit when he sold it to you and wanted to sell you your next car. If you were on a trip, far from your selling dealer, it was almost impossible for you to find a dealer who would agree to fix your car under warranty.

Another negative consequence of under-reimbursing dealers for warranty labor and parts is that the dealer is not inclined to tell you that the repairs are covered by your warranty. When you drive in to the service aisle of your dealer, that person who greets you is paid on commission. He doesn’t call himself a service salesman, but that’s what he is. His title will be service “advisor”, service “writer”, or assistant service manager. This person feeds himself and his family by how much commission he can make on the profit he makes repairing your car. If he repairs it under warranty at a very low rate and no profit, he doesn’t make much of a commission. Today, because dealers make the same profit on labor and parts for warranty as the do for non-warranty work, they love to repair your car under warranty. In fact, they will even cajole the manufacturer to stretch and perform repairs under warranty when your car is only slightly out on miles and or time.

There’s still another negative consequence for automakers not fairly reimbursing dealers for warranty labor and parts. The technicians who repair your car and perform maintenance on it also work on commission. Today, they love to repair your car under warranty because they make just as big a commission fixing a car under warranty as they do when it’s not covered under warranty. If the automakers have their way in court, the technicians will not want to work on your car. What happened many years ago before there were laws requiring fair warrant reimbursement is that the lowest paid, least trained and experienced technician in the shop ended up doing your warranty repairs. Usually this was the new apprentice who was learning to fix cars and was paid a low, starting wage. If you were lucky enough to find a dealer to do the warranty repair, you had good reason to fear that the repair wasn’t done in a proper, safe, and timely fashion.

Now, I think you understand why it’s so important to you, the new car owner, that Florida’s law requiring fair reimbursement by automakers to car dealers for warranty repairs and maintenance is upheld. The court battle is being waged between the car dealers lobbying group, the Florida Automobile Dealers Association, FADA, and the automakers, Alliance of Automobile Manufacturers. You, the new car buyers, don’t even have a dog in this fight. This is one of the rare cases where the car buyer and the car dealer on the same side, albeit for different reasons.

It’s unfortunate that we don’t have a powerful consumer lobbying group in Florida like they have in other states like California. This legal fight is all about who has the most money and unfortunately the automakers have the auto dealers outgunned. The Florida Automobile Dealers Association is struggling to raise another $2M on top of what they’ve already spent. That’s “chump change” to GM, Ford, Chrysler, VW, and Toyota.  The odds aren’t even 50-50 that the car dealers can win this and all you can do is sit back, watch, and say a prayer.

TELL YOUR CAR DEALER TO BE NICE

About seventeen years ago a car dealer in Dallas, Texas wrote a book entitled Customers for Life. His name is Carl Sewell and the book describes in detail why treating your customers with care, courtesy, respect and dignity is the surest way to success in the retail automobile business. When I first read this book many years ago, I wished that I had written it myself. I learned a lot from Customers for Life and it had a major impact on my business and my life.

If you would like a free copy of this book, just go to my Web site, EarlStewartToyota.com. Click on the link under the picture of the book where it says “complimentary copy click here”. Some of the chapters in the book are “The customer will tell you how to provide good service, if the customer asks, the answer is always yes, there’s no such thing as after hours, under-promise and over-deliver, and you can’t give good service if you sell a lousy product. When you read this book, you should have a pretty good idea of how you should expect to be treated by your car dealer, or any retail business establishment.

Remember that Carl Sewell is not just a “nice guy”, but also a very shrewd businessman. He learned that by treating customer so nicely and fairly that he actually exceeded their expectations, these customer continued to buy from him “for the rest of their lives”; Hence the title, Customers for Life. Back in 1990 he calculated that the average customer for life bought $517,000 in cars and service from him over their lifetime. Adjusted for inflation, that would amount to closer to $1,000,000 today. Furthermore these customers referred their friends, neighbors, and relatives. Also, Carl Sewell did not have to spend any advertising money to persuade them to buy from him. It is no wonder that he is one of the largest volume and most profitable car dealers in the USA.

Carl also believes in treating his employees with the same courtesy, care, and respect that he treats his customers. Have you ever been embarrassed in a retail business when a boss chewed out a subordinate in front of you? Chapter 13 is entitled “Who’s more important? Your customer or your employee? A: Both.  When you enter a car dealership where the employees are more like team mates and genuinely care for each other and their supervisors you can practically feel it in the air. You feel more comfortable and trusting and more confident that, if they treat each other like this, you will be treated similarly. This is a direct quote from Customers for Life. “It’s very rare to see a manager who treats his customers one way and his employees another. And it’s awfully hard for employees to treat customers well if the boss treats them badly.”

After you read Customers for Life, why not loan it to your car dealer? Remember that this is not a “do-gooder” kind of a book. The message is that a businessman can be more successful and profitable by employing the recommendations of this book. Loaning your car dealer this book would be doing him a favor. Most car dealers should have heard of Carl Sewell. He is one of the most successful car dealers in the county and his book is considered by manufacturers and dealers to be the “bible” for customer satisfaction. If they haven’t heard about Carl Sewell, feel free to use me as a reference. Reading Customers for Life had a major positive impact on my success and the reputation I enjoy as a car dealer.

The Owner of the Car Dealership is Accountable

Congress passed a law a few years ago that really “shook up” publicly owned companies. It’s called Sarbanes-Oxley, named after the Congressmen who sponsored the bill. Basically this law says that the CEO and other high echelon management of a public owned company cannot get of the hook from wrong doings because he claims he didn't know what his employees were doing. I believe the same rules should apply to all businesses, even if their stock is not publicly held. The boss should always be held accountable for the actions of his employees and this should apply especially for car dealerships.

Most of the employees that the customer comes into contact with in a car dealership are paid on commission. Those employees get a percentage of the profit that the company makes on the transaction. Car sales people, service sales people (also called service advisors or assistant service managers), parts sales people, and the mechanical technicians who work on your car are mostly all paid on commission. This method of pay tilts the relationship between the customer and employee in somewhat of an adversarial manner. The employee wants the profit to be as high as possible but the customer wants it to be low. In a car dealership that has talented, fully engaged, and ethical management, this potentially adversarial relationship is kept in a fair balance. Without the oversight of upper and middle management and careful hiring practices, some employees will exploit a customer to increase his commission.

What brought the subject of this column to mind was a call I received yesterday from a 78 year old widow from Ft. Pierce. She called to thank me for writing my column and to tell me that she wished she had read some of my columns before she bought her 2005 used Mazda. This was the first car she had bought on her own. Her husband had always taken on this responsibility. She paid the dealership a huge profit on her purchase. She was sold a maintenance package that she believed cost only $25 but it really was $2,500. She was rushed to sign the papers at night because the dealership was closing. In the morning, when she realized the mistake, she drove back to the dealership and asked to back out the sale but was told it was too late. She was told she had signed all the papers and that they had already sold her trade-in even though she had not given them the title.  When she asked to speak to the General Manager, three different employees identified themselves as the General Manager. I get a lot of sad calls like this.

The owner of that dealership should know what’s going on. I’m giving him the benefit of the doubt by saying that he doesn’t know because if he does know it’s even worse. The owner should look at the big picture and the long term view of his business. You can take advantage of customers and benefit in the short run, but you eventually “pay the piper” when your bad reputation spreads far enough. Most of the bad things I hear about car dealers from their customers are not illegal things. They are simply unethical and not the way one human being should treat another. Refusing to refund the money of an elderly, widow after she realized that she had been taken advantage of is not illegal, but it sure “stinks”. Jim Press is the top executive for Toyota over all of North America and he is also the only non-Japanese to occupy a place on Toyota’s board of directors. He was quoted in the book, The Toyota Way by Jeffrey Liker, as saying “It’s what you do for a customer when you don’t owe him anything that is the true measure of character. It’s like sticking up for somebody who can’t defend himself”. I really like this quote and I have it engraved on a plaque which I give out each month to the employee who wins the “Above and Beyond Award”. This award goes to our employee who does something for her customer above and beyond what the customer would have expected.

If you have a bad dealing with your car dealership, do your best to contact the owner. This is impossible with publicly held dealerships like AutoNation and United Auto Group, but you should be able to talk to their General Managers. If it’s privately owned dealership, don’t give up until you see the owner.

CAR BUYERS BEWARE OF “THE BOX”

OK, you've just bought that new or used car and the pressure is off…right? WRONG! The next step for the car dealer is to get you into the “box”. You won’t hear this word mentioned. It’s inside car dealer slang for the F&I office or the business office. This is the place that you sign all of those papers making the sale legal and final. But in addition to that, it’s also a very important profit center for car dealers. In many car dealerships it’s the most profitable department. It’s not uncommon for car dealers to make an additional $1,000 profit or more in “the box” on each car they sell.

Here’s how that profit is generated. First and usually foremost is making money on the interest they charge you. Essentially, they make money on “the spread” just like banks make money when they loan it. For example, a car dealer will borrow money from Bank of America for 2.9% and loan it to you for 5.9%, or whatever interest rate they can convince you to accept. The second way they earn that big profit in “the box” is by selling you “products” which are added to the price of the car you just bought. There are many products and some of the most common are extended service warranties, maintenance plans, road hazard insurance, GAP insurance, window etch, and LoJack.

The way you should protect yourself on the interest rate is to have already shopped your own bank or credit union and two other banks for the best interest rate you can qualify for. Never go into “the box” without knowing what the best rate other banks or credit unions will allow you. The best way to protect yourself against the products they will try to sell you is to completely understand each product. Do you want or need an extended warranty on your new car? If this product costs $1,900 for example, how long are you going to keep the car and how long are you likely to be driving it when it’s out of the manufacturer’s warranty? Ask the same questions of each product they try to sell you. If you are unclear on the merits of a product, do not commit. You can always go home and think about and seek advice from friends and advisors.

Another important tactic that I recommend is to never go into “the box” alone. If it’s just you and the F&I manager [often called business manager], and there is a dispute over what was said, it’s just your word against his. Also, having a friend or advisor present will usually be a deterrent to any attempted deception.

These are some of the kinds of deception you should be on the lookout for. Tying the sale of a product like an extended service contract to the interest rate or eligibility to have the bank finance your car is illegal. But this practice happens all too often behind the closed doors of the “the box.” The F&I manger may tell you that the bank “requires” you to buy the extended warranty, GAP insurance another product in order to protect the bank’s collateral. This is simply a lie and it’s illegal for banks or car dealers to do this. Another  common form of deception is to simply not disclose the products or interest rate and have you sign the contract without reading it. There are a large number of documents to be signed after you buy a car. Buyers are often in a state of euphoria now that they have bought their dream car and are in too much of a hurry to sign everything and drive their new car home. The car dealer is required by law to give you a signed copy of the installment sales contract. Be sure you carefully read it and be sure have a copy. If you don’t get a copy, you may find that you signed a different contract than the one you read.

Extended service warranties, GAP insurance, and other insurance products are regulated in Florida unlike many other states. This affords you some degree of protection like being able to cancel an insurance product as long as you did not use it. You can do this in 60 days for a 100% cancellation. You don’t get the cash back and your monthly payment won’t go down however. But the amount is taken off the principal amount you are financing through the bank. You cancel insurance products after 60 days, but the cancellation is not pro rata and you pay a large penalty.

If you remember nothing else from this article please remember this one thing. Do not hurry the process of financing your car and signing the papers. Do not let the car dealer encourage you to sign anything you don’t understand. Time is on your side because it will allow you to think and to consult with others who can help you make your final decision. I get a lot of calls from victims of “the box” and the one thing they all have in common is that they let themselves be rushed into signing the documents so that they could drive their dream car home that same day. 

How much is that auto in the window?

 

I’m writing this article on Monday, September 10, 2012. I copied the title and the illustration above from an article in today’s Wall Street Journal. I’m not guilty of plagiarizing because I’m giving credit to the Wall Street Journal and the reporter, Charles Passy who wrote the article. After what happened to Fareed Zakaria, I want to be very careful. You can read the entire article online by clicking on www.earlstewart.com/pdf/WSJ.pdf.

The Wall Street Journal reporter interviewed me several times over the past month for this article. I sent him copies of invoices, buyer’s orders, dealer addendum labels, and names of people I knew around the US who were experts on unfair and deceptive advertising by car dealers. It was important to me because having what I’ve fought against for so many years written about by a national publication adds credibility. Not only does the Wall Street Journal have the largest circulation of any newspaper in America, but it’s also arguably the most respected daily publication.

One might ask, why don’t local newspapers write stories about car dealers’ unfair and deceptive sales and advertising? The answer, like so many, is “follow the money”. Every local newspaper has an auto advertising section with most of, if not all of the dealers in that market. Newspapers seem to be the advertising choice of many dealers, although TV has definitely cut into their revenue. In large metro markets TV ads are so expensive that most dealers have no choice but to use the newspaper. Car dealers are the single largest source of ad revenue in many newspaper markets.

Now I know that journalistic ethics require a separation between the news, editorial, and advertising departments. But that’s the way it used to be. Today local newspapers and even some national ones are struggling for survival. Ethics go out the window when it comes to survival. Would you steal food for your child if you had no other recourse?

Another reason that I’m encouraged by this Wall Street Journal article is that every auto manufacturing executive reads this newspaper every day, especially articles about automobiles. Also, most car dealers also read the Wall Street Journal. Reading a negative report about deceptive car dealer sales practices in a highly respected national newspaper has got to get their attention. Many manufacturers and most car dealers seem to be in denial about how they endeavor to trick their customers with misleading, false ads and sales practices. I’m a Toyota dealer and I was shocked when Toyota recently removed the financial penalties from violating the Toyota Dealer Advertising Covenant, TDAC. They said they did this based on a request from the national dealer council. The TDAC was created over ten years ago to establish ethical guidelines for Toyota dealers’ advertising. It was written with the input of dealers and all dealers had to sign to promise to abide by its tenets. An example of a tenet would be that a dealer cannot advertise a car for a price unless he will actually sell the car for that price…no “bait and switch” advertising. As you would agree, laws are not effective without penalties and Toyota used to fine dealers very large sums for violating these advertising covenants. Now, there are no financial consequences for a Toyota dealer violating the TDAC. Other manufacturers have similar covenants but enforcement and and penalties are rare.

I have to believe the auto industry will awaken one day and realize that almost all other retailers in the 21^st century have left car dealers in the dust. Most car dealers are still employing the “get ‘em in the door any way you can and make as big a profit as you can get away with” shabby tactics that were common practice fifty years ago. Most manufacturers and some dealers are beginning to realize that car dealers are held in the lowest esteem of any other retailer. Car sales and service complaints top the list and car dealers rank dead last in the professional ethics ranking, tied with congressmen, lobbyists, and lawyers.

I tell manufacturers and my fellow dealers that if we don’t regulate ourselves, you can bet the government will step in and do it for us. As I write this article, the Federal Trade Commission is conducting hearings all around America asking for input about unfair and deceptive trade practices by car dealers. If the government steps in like they did with our nation’s banks, car dealers and manufacturers can expect to be up to their eyeballs in expensive regulations, red tape, and bureaucracy.

Translating Misleading Car Ads

In previous columns I have recommended that you avoid reading most cars ads in the newspaper and in direct mail. Most TV and radio car ads are similarly misleading. My suggestion is that you carefully choose the precise year, make, and model you want with the precise accessories and get at least 3 legitimate bids from car dealers on the Internet or, next best, at the dealerships. However, if you do find yourself perusing the large number of car ads in the local paper, here are some translations of common misleading ads. I took these straight from a local paper.

20% to 40% OFF MSRP. Never buy a car based on how big a discount you are quoted. Always calculate the price you are willing to pay based on an accurate understanding of the cost of that vehicle. Different makes and models have different markups and factory incentives can cause the true markup to vary widely. What sounds like a big discount may also pay the dealer too big a profit.

LIQUIDATION SALE. Most of the time you pay just as much for a car during a “sale” as you do without a sale. The only exceptions are factory incentives which do have an expiration date. A “sale” is what advertisers refer to as a “call to action”. They are looking for something that will motivate you to come in today, rather than procrastinate. It doesn’t seem to matter if the motivation is untrue.

UP TO $15,000 OFF. Many dealers have an additional markup on top of the manufacturer’s suggested retail price, MSRP. They commonly label this a “Market Adjustment Addendum”. This can be thousands of dollars. Discounting a car thousands of dollars means nothing if the dealer just added a “Market Adjustment Addendum” for an amount equaling or exceeding the discount.

STK#62029A. When you see a number like this next to the price of a new car, it means that that is the only car you can buy for that price. The number is the stock number for that specific car which is supposed to tell you that this is the only car at this price. Many of these ad cars are of undesirable colors and accessories. They are advertised below cost and the loss is charged to advertising if they have to sell one. You chances of buying one of these are slim and none.

CREDIT PROLEMS ARE NO PROBLEM. This type of ad is particularly insensitive and distasteful. It is meant to attract people who have such bad credit that they think they cannot obtain financing. Unfortunately, there are people whose credit is so bad that no lender will offer them financing. These people are disappointed and embarrassed when they learn the truth that “credit problems can be, in fact, big problems”.

MINIMUM $10,000 TRADE-IN ALLOWANCE. This is just like the huge discounts. A trade in allowance means nothing if the car has been marked up high enough to offset the extra trade-in allowance.

WITH ACCEPTABLE CREDIT. This allows dealers to add a fine print disqualifier which is an extremely high Beacon score that disqualifies 99% of the car buying population. It is used in conjunction with very low lease payments or purchase payments. It is a “bait and switch” which affords the dealer the opportunity to raise your payments (and his profits) because your credit is “not acceptable”…to him.

PRICE GOOD ON DATE OF PUBLICATION ONLY. You will find this only in the fine print at the bottom of the page. This is added protection to the dealer, in addition to the stock # mentioned above, that he won’t have to sell you the car at the advertised price.

AS LOW AS or FROM.  You will see this in smaller print next to a very big price and a big, pretty picture of the car. This is a further “C.Y.A.” for the dealer so that he doesn’t have to sell that car at that price.

WE’LL BEAT ANY OTHER DEALER’S PRICE OR THE CAR IS FREE. Some claims are so outlandish that I hesitate to bother warning you about them. Applying the old saying “if it sounds too good to be true, it probably isn’t” should protect most people from this kind of ad.

I could go on and on, but I hope I have already made my point. Car dealers’ ads are the absolutely worst way to decide which car you should buy and what price you should pay. When you respond to most car dealers’ ads, they are in control. You must take control and let the dealer respond to your carefully thought out and researched choice of year, make, model, accessories, and what price you offer to pay him.

BEWARE OF DIRECT MAIL CAR ADVERTISING

Of course, you should be careful of all advertising…newspaper, TV, and radio, but direct mail can be especially deceptive. The reason this is so is because direct mail usually “flies beneath the radar” of the regulators. There are so many ads in violation of rules and laws that the regulators are overwhelmed. They focus on the most visible ads, often the ones that they see themselves in the newspaper or on TV. Direct mail represents a very small percent of total advertising. One reason for this is that it is considered by many advertising agencies to be too expensive and relatively ineffective. I believe that the only way to make direct mail effective for many advertisers is to use deception.

I have a couple of direct mail pieces on my desk and will cite some examples of this deception.  “We’ll will buy back your present vehicle for up to $5,000 over current Kelly Blue Book Value on trade towards he purchase of a Brand New Toyota or Pre-Owned model.***” The asterisk is for the very fine print disclosure on the back of the letter which reads: On select models. Discounts and rebates will vary from model to model. Of course, with the two words “up to” in front of the $5,000, no disclosure is really necessary. Buying back your present vehicle for $1 over current Kelly Blue Book Value is technically “up to”$5,000.

Attached to the letter is a something that looks like a check made payable to the recipient for $8,207. Here we go again with the “up to”. “You can apply this registered voucher for a discount ‘up to’ $8,207 off MSRP on a new Toyota.” Of course there is another asterisk which states “on select models”.

But there’s more! “Just for attending this event, you will receive 5 “golden” $1 coins as a gift, and you may have won $100, $250, $50, or possibly even $4,500 cash!” We, of course, have another asterisk which says that your odds of winning anything are 1 in 25,000. I often wonder who responds to these ads, not understanding the difference between a “golden coin” and a gold coin. Or, who really think they have a reasonable chance to win anything.

It’s not over yet! “Every application for credit will be immediately submitted and processed for approval and on-the-spot delivery REGARDLESS OF PAST CREDIT HISTORY”. Of course, the operating key word here is “submitted”. There is no guarantee of “approval”. They will simply “submit” you application to the bank and if you have bad credit, the back will reject your application.

“During this weekend event, any new Toyota or used vehicle could be purchase with ZERO cash down!” The key word here is “could” instead of “can”. Of course, there is the old asterisk, which, if you can find and then read the fine print, it says with approved credit. You have to a very high Beacon score to buy a new or used car with zero down payment. Less than 1% of car buyers would have this high a Beacon score. There is also a phrase which says “CASH DOWN IS NOT SUGGESTED”. This dealer might not suggest it but I can almost guarantee the bank will not only suggest it but demand it.

“Due to overwhelming response and customer request, I would like to again offer you a personal invitation to receive 80% of base original MSRP for the car you are currently driving.” This promise doesn’t even have an asterisk. Of course the base MSRP excludes accessories. Sometimes an offer is so ridiculous that you wonder who would ever believe it. Ask yourself how any car dealer could promise to pay 80% of the new base MSRP on a used car that they have never seen. They don’t know how many miles are on the car, whether it has been wrecked, or even if the car will still run.

Direct mail claims like those above, unfortunately do work. People actually come in and buy cars. Unfortunately these ads prey on those who are uneducated, have difficulty reading English, or are simply gullible.  My advice is to ignore all car dealers’ direct mail solicitations. I’m not saying that 100% are phonies, but 99% are and the odds are so overwhelming, you’re better safe than sorry. 

www.earlstewarttoyota.com

Phony Dealer Window Stickers Circumvent the intent of Federal Law

Chances are you never bought a new car without a Monroney Label. You may not even recognize the name “Monroney”, and think of the label that appears on all new cars as simply the “sticker or the “window sticker”. Only if you bought a car before 1958 would you not have had this federally mandated window sticker attached to your new car. Senator Mike Monroney was the driving force behind this Federal law, Chapter 28, Sections 1231-1233, and Title 15 of the United States Code. This law requires that all car manufacturers affix a manufacturer’s suggested retail price, MSRP, on every new car and truck they sell in the form of a window sticker.  This MSRP is the same for all cars of the same make, model, year, and accessories. This Federally mandated window sticker can only be removed by the buyer of the car and failure to adhere to this law is punishable by up a $10,000 fine and one year in jail per offense.

The reason that this law was passed in 1958 is that car dealers were resorting to deceptive advertising and sales practices to inflate the price of cars and prevent accurate price comparisons by car buyers. Car dealers were adding on extra charges, over-allowing on trade-in allowances, and offering artificial discounts. Because there was no standard price on any car, the dealer could quote any price he wanted as the retail price of the car. If a car buyer shopped at three different Ford dealers for a specific Ford model with the same accessories, he would be quoted three different retail prices. The discount he was offered was just a function of how high the dealer wanted to make the retail price. The trade in allowance could be as high as the customer wanted just by marking up the new car higher.

Well you guessed it, today in 2012, fifty-four years later, car dealers are “adding on extra charges, over-allowing on trade-in allowances, and offering artificial discounts” to deceive their customers just like they did prior to 1958. The main deceptive device that the dealers invented to accomplish this was the “addendum label or sticker”. It is also referred to occasionally as a supplemental sticker. I’ve written about this before and I used the name “phony Monroney”. I call the addendum label this because most dealers design their own stickers, addendum labels, to look identical to the federal Monroney labels. They use the same colors, logos, size, and right down to the same font size and style. This is clearly an attempt to deceive the car buyer into believing that the total price is the official manufacturer’s suggested retail price. Sadly, it doesn’t have to be a very good counterfeit because many car buyers never even look at the Monroney sticker on the car they buy.

Almost all car dealers add an addendum sticker next to the Monroney sticker. The addendum stickers usually list dealer added accessories that have very low cost to the dealer but very high markups to the car buyer. Common accessories are paint sealant or polish, fabric coat like Scotch Guard, stripes, Nitrogen in tires, and cheap theft deterrents like window etch. A package of these accessories will typically cost the dealer less than $100 but will carry a retail asking price of $995 to $2,995 or higher. In addition to dealer accessories there is commonly an additional markup to the MSRP carrying an innocuous, indecipherable label like ADM, MAA, or RMV. These letters stand for Additional Dealer Markup, Market Adjustment Addendum, and Regional Market Value. The amount varies from dealer to dealer and is simply a function of how much chutzpah the dealer has and how gullible he thinks his customers are.

Currently there’s a dealer in South Florida, West Palm Beach Kia, that marks up every one of their new cars by $6,998 over the Monroney label, the MSRP! This comes from a virtually worthless $2,500 “appearance and protection package” and a $4498 Regional Market Value”. You might ask yourself, “Who could possibly fall for advertising a big discount when the dealer first marks the cars up $7,000 over MSRP?” You will be surprised to learn that this dealer is one of the highest volume sellers of any make in Florida.  As you know, Kia is not one of the more popular selling cars, so what other than this advertising can you attribute to their success?

Deceptive advertising and sales practices work and that’s why Congress passed a law fifty-four years ago to stop exactly this practice. I don’t pretend to be an attorney, but it seems to me that what dealers are now doing is flaunting a federal law.  What Senator Mike Monroney envisioned and the law he introduced was to protect car buyers from exactly what West Palm Beach Kia is doing so successfully today. Senator Monroney wanted all car buyers to be able to compare a discount offered by one Kia dealer with other Kia dealers on the same year, model and equipped Kia. Adding a $7,000 markup to the MSRP so that larger discounts can be advertised and larger trade-in allowances can be offered is flaunting the intent of Chapter 28, Sections 1231-1233, and Title 15 of the United States Code. If it isn’t a direct violation, it absolutely is a circumvention of its purpose and intent.

www.earlstewarttoyota.com

Florida CAR DEALERS “WIN” THE TRIPLE CROWN Least Respected, Most Complaints & Highest Dealer Fees

In recent surveys, car dealers have accomplished the perfect storm of fear, distrust, and vilification by the public. The most recent Gallup poll for the “Most and Least Respected Professions” listed car sales people tied for dead last with Congressmen and Lobbyists. In a recent poll by the American Consumer’s Federation, car sales and service received more complaints than any other business. And, lastly, in a recent survey by True Car, Florida car dealers had a higher average dealer fee ($610) than any other state in the USA. 

You would think that there would be some local attention paid to this by the media and the regulators. The national media reports these stories and the local media will sometimes report the national story but never do they relate it to local car dealers. National regulators like the Federal Trade Commission are highly critical of dealers unfair and deceptive trade practices. The FTC has formed an “Auto Dealer Task Force” and are holding meeting all around the USA for input from consumers and consumer advocates about ways car dealers are preying on their customers. But have you heard about any serious effort by the Florida Attorney General’s Office or any other state or local regulators to stop car dealers’ blatant deceptive and illegal advertising and sales practices?

The TV and radio stations and the newspapers depend on car dealer advertising for economic survival. Each type of media, TV, radio, and print compete with each other for car dealers’ business. If a newspaper writes an unfavorable article about a local car dealer, he simply pulls his advertising from that newspaper and moves it to TV and/or radio. If a broadcast TV channel exposes a local car dealer, he moves his ads to another TV channel or medium. Money talks.

The Attorney General is an elected office and all of the other state regulators are either elected politicians or appointed by politicians. Florida politicians fear the powerful car dealer lobbies in Tallahassee. The most powerful lobby is the Florida Automobile Dealers Association, FADA, and there are other lobbying car dealer associations in Tampa, South Florida, and Jacksonville. A long time ago I was a director for the FADA and for the South Florida Auto Dealers Association, SFADA.  In fact, I even served on the executive committee of the FADA. This is when I became aware of how much money and influence we car dealers had through our associations. Car dealer associations contribute huge sums of money to candidates of both parties. They don’t care which side of the aisle he’s on or what political philosophy a candidate has; they care only if that candidate will “play ball” when it comes to not voting for regulating car dealers.

The power of the car dealer lobby was fully understood by me four years ago when I attempted to get a bill through the Florida legislature to outlaw the dealer fee. I flew to Tallahassee and testified before the state senate commerce committee. The FADA testified at that same hearing defending the dealer fee. The bill never even got out of the committee much less get a house sponsor. When I returned home and spoke “off the record” with some local state legislators, I was told why I didn’t “have a snowball’s chance” of getting the dealer fee made illegal in Florida. The legislators I spoke to agreed with me that the dealer fee was a bad thing for the consumer but they also said it would be politically impossible for them to publically take that position. Offending the powerful car dealer lobbyists would jeopardize their reelection. An analogous situation is playing out now with respect to gun control. The national news recently reported several terrible incidents of mass killing by deranged killers who legally obtained their guns. You would think that some politicians would have rushed to introduce more gun control regulation or better enforcement of the current regulation.  Have you noticed that democrats, republicans, and independents have done or said nothing? The reason is the National Rifle Association, NRA, the most powerful lobbying association anywhere. 

I wish I had an answer to this dilemma. Our political system leaves a lot to be desired but it’s still the best on the planet. It hasn’t really changed that much over the years. Politicians’ #1 and #2 priorities have always been to get elected and reelected. Our founding fathers foresaw this problem and that’s why they provided for freedom of the press in the First Amendment. The news media is often referred to as the “Fourth Estate”, meaning the fourth branch of our government next to the Executive, Legislative, and Judicial. The news media’s job is to keep the other three branches, especially the legislative, honest. Our founding fathers might not have foreseen what impact the greatest recession in our history might have on the news media. Survival is a primal instinct and it can trump ideals like courage and integrity. If a journalist loses his job today, he might have a very hard time finding another. The watchdogs that our founding fathers created to keep our politicians honest are too afraid to growl for fear the VP of advertising might not like it.

www.earlstewarttoyota.com

BUYING TIRES: “CAVEAT EMPTOR”

In case you’re a little rusty on your Latin, “Caveat Emptor” means “Let the Buyer Beware”.  This is something to keep in mind when you buy anything, but the danger of being ripped off when you buy new tires ranks right up there with buying and servicing your car.

Retailing tires is very important to, not only tire companies like Goodyear, Firestone, and Michelin, but independent retailers like Pep Boys and Tire Kingdom. In recent years car dealers have become very interested in selling tires too. The reason is that car customers too often don’t return for service and service is generally more profitable to car dealers than selling cars. Independent service departments and tire manufacturers’ retail service and tire outlets are taking away car dealers’ service business. Tires are something that you have to buy regularly for your car. Wherever you go to buy one or more new tires, the tire seller will take that opportunity to sell you additional services and products…you can bet your life on it.

Tires have become “loss leaders” for car dealers, tire factory service stores, and independents. When I say loss leaders, I don’t mean that you don’t end up paying the tire seller a profit on the tire transaction. What I mean is that the advertised price would result in a loss to the seller if he really sold it at that price. This is very similar to car advertising. Car dealers go through a great deal of thought and effort to advertise a price which is perceived to be lower than they will really sell you the car and tires sellers do the same thing. You can be sure that you can never buy a tire advertised on the Internet, newspaper, or TV for the price that you see.

To demonstrate this I chose one of the largest tire sellers in the USA, Tire Kingdom. I chose them because, as the leader, they set the pace in how tires are sold and advertised. Buying tires from other sellers, including most car dealers, will be at least as risky and often more so.

I sent in a mystery shopper to two Tire Kingdom retail tire and service outlets in Palm Beach County. My shopper responded to an ad for a special sale which is blanketing TV, newspaper and the Internet. The ad says that from August 1 to August 12 you can buy one tire and get the second one free. I watched the TV ad several times and it is literally impossible to read the fine print disclosure. By going to Tire Kingdom’s website, I was able to read the fine print, but the vast majority of respondents to this sale would come from TV and be clueless to the “gotchas” in the fine print.

The first revelation to my mystery shopper was that only certain makes and types of tires were eligible. No name brands like Michelin or Goodyear were available for this sale. Interestingly there was an inconsistency on this between the two Tire Kingdom stores we shopped. In fact, there were several inconsistencies between the stores on types of tires, prices and other procedures.

To me the biggest deception was that the tire buyer was required to purchase “road hazard insurance” and a wheel alignment.  The prices on the insurance ranged between 14% and 18% of the total price of the tires and the prices of the wheel alignment ranged from $114.99 to $79.99.  The advertisement didn’t say they are advertising a package deal for tires and road hazard insurance and wheel alignments. But the fine print (indecipherable on TV) disclosed this condition. Being required to buy a four wheel alignment is wrong for two reasons. Firstly, buying a wheel alignment should be your decision and not tied to the purchase of tires. Secondly, what if your wheels don’t need an alignment? You may have had your four wheels aligned two hours ago, just now run over a nail in the road, and now have to buy a tire.

BUT WAIT THERE’S MORE! The fine print also tells you that you must pay $1 per tire for the state tire tax. This is a real tax but it should be included in the quoted prices. There’s another fee you are charged which is a “tire disposal fee” which Tire Kingdom can charge you any amount they like. It’s not specified. The truth is that Tire Kingdom actually sells many of their take-off tires to used tire dealers for a nice profit. I do the same thing in my dealership and that profit off-sets my cost of having take-off tires hauled away and disposed of. And the final “gotcha” is the infamous “shop fee” which usually is 10% of the full retail price of the service invoice with a cap of $35. Now remember that there is no legal prohibition or cap on “tire disposal or shop fees”. Tire Kingdom imposes their own caps and prices on these rip offs. Other tires sellers are left to their own chutzpah and imagination to gouge you to limit of your tolerance.

BUT WAIT THERE’S STILL MORE! In the fine print is “No carry-outs”. I’ve seen this in some restaurants, but it’s an unusual term for Tire Kingdom and other tire sellers to tell you that before you can buy their tires at their advertised price, you must pay them whatever they want to charge you for mounting and balancing those tires.

I’ll end this article with constructive suggestions of how you can avoid these sorts of unfair and deceptive advertising and sales practices. Refuse to play the tire sellers games. Demand an “out the door” price for the specific brand and style of tires you want. Make it clear that it must include all federal, state, and local taxes, all fees like shop and tire disposal, all extra services like alignment, all extra products like road hazard insurance, and all services associated with putting the tires on your car like mounting and balancing. Ideally you should do this on the telephone and make it clear that you have only one check left in your checkbook and you will be filling it out at home for the total amount due, an out-the-door price. Of course, you should do this at least three times with three different tire sellers and buy them from the one who gives you the lowest price.

www.earlstewarttoyota.com

Open Letter to all Auto Manufacturers: Get Sincere About Customer Satisfaction

Dear, GM, Ford, Chrysler, Toyota, Honda et al,
Isn’t it about time you “got real” about how your dealers satisfy their customers? I know you pay lip service to this, just like your dealers do. Ask any auto manufacturer CEO what the most important thing “in the world” is and he will say “satisfying our customers”. This is the same verbal assurance every car dealer will give, especially when they’re being interviewed by the media. But in your hearts, you know that profit, market share, and volume are numbers one, two, and three in your books and sincerely satisfying your customers is lucky to be number four.

Now I know you only build the cars and it’s your dealers who sell them to the public. The dealer is your customer and the car buyers are the dealers’ customers. Therefore it must be the dealers’ fault that car buyers rank auto retailers as the least ethical profession, tied with Congressmen and lawyers. I’m going to tell you why that isn’t the case. I’m going to tell you why you bear the ultimate responsibility for why car buyers fear, distrust, and dislike your dealers.

Reason #1: You measure your dealers’ success and reward them primarily by how many cars and parts they buy from you. High volume dealers “can do no wrong” and you look the other way when they resort to unethical advertising and sales practices. I challenge you to show me one high volume dealer whose franchise contract you terminated or didn’t renew based on bad customer satisfaction. What kind of message does that send to all of the other dealers? The message is clearly that as long as I sell a lot of cars, how I do it doesn’t really matter to my manufacturer. Most of my competitors are using sleazy, bait and switch advertising to sell lots of cars; therefore I have no choice but to follow suit.

Reason #2: To save face, you measure your dealers’ customer satisfaction by email and snail mail surveys that you know can be, and are, manipulated by your dealers. With email surveys, dealers can simply “make a mistake” when they record an angry customer’s email address. Or, worse yet, they can fabricate an email address, angrycustomer@yahoo.com which comes to the dealership address. When the survey arrives, they rate their dealership 100%. Some manufacturers were forced to recognize the fact that this was being done and scolded the dealers when they traced the IP addresses from hundreds of customers back to the dealership. Scolded dealers now use PC’s at diverse IPs like libraries and employees’ homes. For snail mail and email, dealers offer incentives like a free tank of gas for bringing in a blank survey which the dealer fills out and mails in. Or the car or service salesman simply intimidates the customer into giving the dealers a good score, “If you give me a bad survey, I might lose my job!”

Reason #4: Your compensation plans from the top down are designed to reward only high car and parts sales. In those few compensation plans that do reward high customer satisfaction scores, they work against you because it’s so easy for the dealers to cheat on the surveys. Your employees either look the other way or actually encourage the dealers to cheat. All they care about is their dealers getting high customer satisfactions scores and don’t care or want to know how they do it.

Reason #5: Most auto manufacturer senior executives don’t have a clue about what’s going on in the trenches of car dealerships. They don’t see the unfair, deceptive and even illegal advertising and sales practices. Their vision of what’s going on in the auto retail world is largely from their computer reports which are based on flawed data from manipulated customer surveys. Or, they get their input from big volume dealers who often have the same problem of not really knowing what’s going on in the trenches. Large volume dealers, the heroes of the manufacturers, are usually out of touch just like the senior manufacturing executives. There are two reasons that large dealers and senior manufacturing executives don’t take action to honestly improve customer satisfaction. One reason is that some truly don’t know. The second reason is that they know, but don’t “want” to know because they would lose their “deniability” if it ever comes out.

There are other reasons and I could go on and on but I think five reasons are enough to get your attention. I have two messages for you. The first is for the executive who truly doesn’t know what’s going on in the trenches of your car dealers. Visit several of your car dealerships anonymously. Don’t go to the dealerships near your headquarters around Detroit or Torrance, but out of the area to dealers who never see a senior factory guy. Pretend to buy a car and actually drive your car in for service. You will be shocked, and at last enlightened. My second message is for those senior auto executives who know damned well what’s happening in the trenches, but pretend not to in order to maintain deniability. I’ll speak your language. Sincerely satisfying your dealers’ customers will determine your future success, compensation, and bonuses in the very near future. This is the 21st century and consumers are a lot smarter and demanding then they were in the 20th. They are very sensitive to being ripped off and the only reason they have accepted it this long is that they had no choice. Most car dealers took advantage of them and all manufacturers tolerated it. More dealers will begin to do business the right way because it “works” and you will see their incredible success. If you want to succeed in your position you will make those changes in the way you reward and accept those dealers who treat their customers right and those who don’t.