Treated Badly by a Car Dealer? 5 Steps You Can Take to Resolve the Issues

Hopefully the sales or service experience with your car dealer went well. But, too often, they don’t. Now what? The advice I give you applies to all business transactions, not just car dealerships.  

Your first step should be to communicate your complaint ASAP to the General Manager or, preferably, the owner. Be sure that you are talking to the real owner or the real general manger. A General Manager is over all employees in the entire company. A general “sales” manager is not a General Manager. If you can’t reach the owner (Many car dealerships are either publicly owned or owned by absentee owners), ask to see the General Manager. Often times the owner or General Manager is not aware of everything that goes on with all of their customers and employees. They might have new employee that should not have been hired or received inadequate training. Or, they may simply have a “rotten apple” that should not be working there. The ease and speed with which you can meet and speak to a General Manager or an owner is a pretty good measure of the integrity of the company as whole. If the owner or General Manager cares enough about her customers to allow total access, it is probably a very good place to do business. In fact, it is a good idea to find this out before you do business.  

If you cannot reach the owner or General Manager, contact the manufacturer who franchises the dealership. Car dealers have a contract with the manufacturer called a franchise agreement and this contractual agreement requires that they treat their customers with courtesy, efficiency and integrity. Most manufacturers have a customer hotline that allows you to call and register a complaint directly. The owner or General Manager of the dealership will be made aware of your complaint. As you might guess, the manufacturer has quite of bit of clout with their dealer. If a dealer does not live up to his side of the contract, his franchise could be canceled or not renewed.  

The third step I recommend, if numbers one and two don’t work, is to contact a consumer agency like The Better Business Bureau or the County Office of Consumer Affairs. These agencies will send your complaint to the dealership and request a written reply. No car dealership or business wants an unanswered complaint in the file of a governmental or private consumer agency 

The 4th step is to call the Florida Department of Motor Vehicles, DMV, and/or the Florida Attorney General’s office. These are extreme steps to be used for serious, even illegal, activities. The DMV has the power to suspend or cancel a dealer’s motor vehicle retail license, putting him out of business. The Attorney General’s Office can file criminal charges and assess large fines, even jail terms. The DMV phone number is (850) 617-2000 and the Attorney General’s phone number is 866-966-7226. . This website provides you with three forms to download…from the Florida Attorney General, Florida Department of Motor Vehicles, and the Florida Office of Consumer Affairs, www.FloridaCarDealerComplaints.com. 

Your last resort is to contact an attorney. I list this last because hiring an attorney just about eliminates the possibility that you can quickly, amicably and inexpensively resolve your differences with the car dealer. Be very careful which attorney you choose. Try to choose one that is primarily interested in helping you and not in generating large fees for him. Under the Florida Deceptive and Unfair Trade Practices Act, an attorney is entitled to his fees and costs from the defendant in a lawsuit if he wins. These fees can be much larger than the amount of your claim, motivating an unethical attorney to spend more time than is needed and dragging out a case to generate more fees than are necessary. This can be very dangerous for you because the car dealer’s attorney’s fees run roughly parallel to your lawyer’s and you can be held liable for those if you lose the case. However, there are honest and talented consumer advocate attorneys that will counsel with you at no charge. They will tell you whether or not you have a lawsuit you can win. If you do, the car dealer will pay your attorney’s fee. 

Hopefully you never have to resort to the final step of hiring a lawyer. In trying steps one, two, three and four try to present your complaint as concisely and politely as possible. You have every right to be angry when you are taken advantage of, but try to let your anger subside before you speak to or write to someone about your problem. We all react negatively to someone who is profane, raises his voice, or is sarcastic. Your goal of communicating and resolving your complaint is best reached by communicating clearly, politely and concisely. 

Car Dealers Exploiting the Elderly

Not a week passes without at least two or three elderly people contacting me about being victimized by a South Florida car dealership. These are usually pre Baby Boomers in their seventies, eighties and nineties. I’m happy to say that I have a high rate of success if I’m contacted soon after the purchase…within a few days. The first thing I do is contact the dealership’s owner. With publicly owned dealerships like AutoNation, Penske Automotive, and Sonic, and Group One I have to contact the real General Manager. I emphasize “real” because sales managers will often try to foist themselves off as the General Manager, but they are only in charge of the car sales departments and are really “general sales managers”. In the rare occasions I strike out, I have no alternative but to contact the Florida Department of Motor Vehicle, DMV which is the best governmental agency to keep a car dealer on the straight and narrow. You can download a complaint form to the Florida Department of Motor Vehicles at www.CarDealerComplaints.com.

I use the term “car dealer” often in my columns and I want to make it clear that I am not trying to get personal. I could use the terms “car salesman” or “car sales manager”, but the dealer is the boss and I firmly believe the placard Harry Truman had on his desk, “The buck stops here”. The guy or gal that owns the place is responsible for the actions of their employees. Just because he doesn’t know that there are some salesmen or managers taking advantage of his customers, is no excuse.

When I became a senior citizen I began to see the world in a different light. I’ve been a car dealer for over 50 years, but I have seen my own business through the eyes of a senior citizen for only the last few. One thing that has helped this awareness has been my relative new public persona, brought on by my TV commercials, radio show, public speaking appearances and this column precipitate a lot of phone calls, texts, emails, and letters from seniors in South Florida and all over the USA. Some of these are very complimentary. Many of them are also calls for help or advice from those who were taken advantage of when they bought their car.

I get more calls from widows than any other single group. Recently, I was introduced to a widow in her seventies who had come in to buy a car with her nephew. She had never bought a car before. Her husband had always handled this responsibility. He passed away 2 years ago. She was very wise to bring along her nephew to assist her in her first car purchase. Our culture and especially the roles of women have made incredibly positive changes since the second half of the 20th century. More women who grew up in the fifties, sixties, and seventies were relegated to the role of homemaker and mother. The Man had a “regular” job and earned the money, and made the major decisions like buying a car. As you know men generally predecease their wives and many widows have never bought a car before.

Buying the right car at the right price is no easy task. There are a lot of variables like trade-in allowances, monthly payments, discounts, interest rates, lease or buy, finance or pay cash, and all that I just mentioned has to do only with the cost of the car. What is the best make and model for you? This process should take lots of time in the study and preparation, but too often purchases are made in just a few hours with little or no preparation.

The reasons why the elderly are so often targeted and exploited by car dealers (and other businesses) are many and complex. For one thing, there are just a lot of elderly people living in South Florida and other popular retirement communities. When a reporter asked John Dillinger why he robbed banks, Dillinger replied, “Because that’s where the money is”. Even though most senior citizens are smarter than ever, I believe that we are perceived by many as not being so smart. We are looked upon as easy prey. Also, I think that we pre-baby boomers grew up in a more trusting, family oriented time and we sometimes trust others more than we should.

In summary, if you are a pre-baby boomer like me, take extra precautions before you enter a car dealership. Do your homework carefully. Never, never make a rush decision. Do not buy that car on the same day you come into the dealership. Go home, discuss it with friends and family, and sleep on it. And if you call me, please call me before you buy the car, not after it’s too late.

Consumer Reports: Don’t Buy Another Vehicle without it!

If you don’t already subscribe to Consumer Reports, you should. I have been a subscriber for as long as I can remember. I rarely buy any product without consulting this great magazine. I also subscribe to Consumer Reports online, www.ConsumerReports.org, which is even more current than the regular magazine. I recently re-read their annual auto issue (April 2020), which no car buying family should be without. All libraries should have this on hand.

Don’t be fooled by other magazines with similar names purporting to objectively analyze and recommend products. There is only one Consumer Reports. They do not accept any advertising and therefore are not beholding to any companies. CR is a not for profit organization and receive all their funding from donations and the sale of their subscriptions. They even go beyond this and will not allow a retailer or manufacturer to use the name Consumer Reports in their advertising. Even if Consumer Reports gives a product a great rating, that company cannot mention this in their advertising. If they do, they get sued by Consumer Reports. Lastly, CR will not accept the gifts of products from manufacturers for testing. They purchase the products at full retail asking price to be sure there can be no conflict of interest. No other company goes this far and is this “squeaky clean”. J.D. Powers is a company that ranks and compares lots of products including cars, but they allow companies to use the JD Power name to advertise their products when they rated them good. You can understand why a consumer might be just a little more skeptical of J. D. Powers’ objectivity than Consumer Reports’.

I am not saying that Consumer Reports is infallible. They do make mistakes and they have been successfully sued by some companies that were affected by their mistakes in testing. But this is very rare. As a car dealer for over fifty years, I have not always liked what I read about all the makes and models of cars I have sold, but I grudgingly had to admit that the reports were almost always accurate. I must confess that with some makes and model cars I have sold over the years, I was very thankful that the circulation of Consumer Reports is not very large. Their circulation is growing as consumers become more educated and sophisticated.

This annual auto issue should be a mandatory read before you buy your next used or new car. Here are some of the articles in this issue…Top Picks (the best new vehicles they have tested), Best and Worst (tells you the ones you shouldn’t buy), New Car Ratings (255 tested models, from best to worst by category), and Ten Top Picks (Only the very excellent models), Reliability trends (repair histories on all makes and models.

Consumer Reports also offers other car buying services like their “New Car Price Service” which discloses the actual cost to the dealers, rebate and incentive information, negotiating strategies, and their expert recommendations. They also offer a “Used Car Price Service” which provides an evaluation tool kit that helps you establish the right price for most used cars made from 2013 to 2020.

The Ten Commandments for a Car Dealer (Secrets for Success for all Businesses)

I composed these “ten commandments” for all the employees in my car dealership, aka The Earl Stewart Code. They didn’t come to me in a vision or on a mountain top, but evolved over fifty years as a car dealer. Most of them evolved over the last two decades which is why I often refer to myself as a “recovering car dealer”. But just like the biblical Ten Commandments, they don’t do any good unless people know, understand, and apply them. In my dealership, all my managers and other employees know that we must “walk the talk”.

(1) Do whatever our customer asks, if she believes she’s right. It’s not important whether our customer is right or wrong, only if she honestlybelieves she’s right.

(2) Do what is right for the customer even if you don’t have to. Just because we’re not required by law or contract to do the right thing is no excuse.

(3) If your supervisor is not available, then you do what is the right thing for our customer. All Earl Stewart Employees are empowered to spend or do whatever is necessary to do the right thing by a customer. If in 20-20 hindsight you should err, you will not be held to blame because you acted in good faith to make our customer happy.

(4) Always answer all phone calls, emails, texts, and messages of any kind from our customers ASAP. Nothing angers a customer (or me) more than a delayed or non- response from us.

(5) All Customers must be treated with courtesy and respect always. Just because you judge a customer to be unreasonable is no excuse not to treat that customer with courtesy and respect. If you are incapable of dealing with a customer, involve your supervisor or me.

(6) You will always tell our customers the truth, the whole truth, and nothing but the truth. I believe in giving every Earl Stewart employee a second chance except when it comes to dishonesty.

(7) Your first loyalty is to our customer, not to the auto manufacturer. In the rare case where a dispute arises between our customer and Toyota over warranty coverage, for example, we advocate for our customer. We argue and present the facts on behalf of our customer but abide by Toyota’s decision.

(8) You must personally take ownership of our customer’s problem. This means that if you are the first person to learn of a customer’s complaint or problem, you have the responsibility to stay on top of its resolution until you personally verify that the issue has been resolved. Don’t just refer or delegate the problem to someone else even it is outside your department.

(9) Promise our customer less than you will deliver. Always be conservative when making promises to your customers. Overestimate the time of a service or the date of arrival of the new car they ordered. Under-promise and over-deliver.

(10) Trust your customer as much as you hope he will trust you. We’ve all been burned by trusting someone who disappointed us but that’s a very small percentage. The fastest way to earn trust is to trust the person you want to trust you. Somebody must go first. Let it be us.

BEWARE THE PHONY MONRONEY!

The Monroney label, commonly knowns as the “window sticker”, is meant to inform car buyers of the official retail price suggested by the car manufacturer. The U.S. Senator who drafted this law, Mike Monroney, said this about his law: “The dealer who is honest about the so called ‘List Price’ cannot compete with the one who packs several hundred dollars extra into it so he can pretend to give you more on the trade-in.” Senator Monroney said this in 1958 and the only thing that has changed is that dishonest dealers are now charging several THOUSAND dollars extra. To add insult to injury, some remove Monroney Labels before delivery which is illegal.

The Monroney label is the window sticker that is mandated by federal law to be affixed to every new vehicle sold in the United States up until the time the new owner takes delivery. The name, Monroney, derives from Senator Michael Monroney’s law passed by Congress in 1958. Prior to the proposal of this bill, there was often a large discrepancy between the showroom price and the actual price of a new vehicle. The fact was that existing price tags did not tell the full story. Most customer-quoted prices were for "stripped-down" models and did not include additions for preparation charges, freight charges, federal, state, and local taxes, or optional factory-installed equipment requested by the purchaser. These hidden charges were used by some dealers to increase the selling price while giving the new vehicle buyer an inflated idea of their trade-in allowance. This price confusion led to a slump in auto sales during the early 1950's. Senator Monroney's bill was designed to prevent the abuse of the new vehicle list prices, but would not, however, prevent dealers and buyers from bargaining over vehicle prices.

Well, as you might expect, car dealers have figured out a way to evade this very good law. An alarmingly large number of dealers use a label that is designed to look almost identical to the official Monroney label. It has the same coloring, fonts, type size and layout. This “phony Monroney” is affixed right next to the genuine article. Unless you really look close and read all the fine print, you will have no idea that you are looking at a counterfeit Monroney label. This phony Monroney includes extra charges to artificially inflate the manufacturer’s suggested list price, MSRP.

One of the most egregious of these charges is an addition of pure markup just for profit which has a variety of names. Some of these are “Market Adjustment”, “Additional Dealer Markup”, “Adjusted Market Value”, “ADM”, “Market Adjustment Addendum” and “Market Value Adjustment”. Some dealers advertise discounts from DSRP vs. MSRP, with DSRP standing for “DEALERS suggested retail price.” This is simply an amount that the dealer adds to the manufacturer’s suggested retail price. It is almost always used in high-demand, low supply cars. I have seen these labels with charges as much as $10,000 added to the MSRP. Additions of $1,500 to $3,995 are common. Dealers also use the counterfeit labels to price dealer-installed accessories, which are OK, if the accessories are not marked up higher than the manufacturer marks them up. But dealers usually add virtually worthless accessories just to increase the price of the car to you with very little increase in cost to the dealer. Nitrogen in the tires, pin stripes, roadside assistance, floor mats, etched and tinted glass are just a few examples.

When customers confuse the phony Monroney with the real one, this distorts their point of reference for comparing prices between different dealerships. Manufacturers’ Monroney labels are consistent for the same year, make and model with the same accessories. A 2016 Honda Accord with the same factory accessories will have the same MSRP at every Honda dealership you visit. But if dealers fool you into thinking their label is part of the Monroney, you’re not comparing “apples and apples”. This can adversely affect a good buying decision in many ways. Some buyers focus mainly on how big a trade-in allowance they can get for their old car. If one dealer has the same car marked up $3,000 more than another dealer, he can offer you $3,000 more for your trade and still make the same profit as the other dealer. Some buyers focus on how big a discount they get from “sticker”. It’s easy to give a higher discount if you have artificially inflated the MSRP by thousands of dollars.

My advice to you is carefully inspect the sticker on the new car you are contemplating buying. Read it completely and especially the fine print. If there is a second label on the car, it is possible that it is fair. This would be for purposes of adding an item, installed by the dealer like floor mats or stripes, priced the same as the manufacturer charges. If that second label includes a markup over MSRP for no reason other than profit for the dealer, make sure that you adjust for that number in your comparisons for discounts and trade-in allowance. Some dealers also add a second markup to these labels and that is the infamous “dealer fee” also sometimes called “doc fee” and “dealer prep”. Some dealers do not put this on the phony Monroney but print it on their buyer’s orders and program it into their computers.

Should I Trade in My Old Car or Sell it Myself?

When you trade in your old car on your next car, the dealer will try to retail your car or sell it at auction for more than he allowed you in trade. If he successfully retails your car, he will make about $2,000. If he wholesales it at the auction, the profit will be less. You should know that this is what the dealer wants to do. Sometimes it doesn’t work out that way and he will lose money on your car at the auction. Or, he may be unable to retail your car and then most certainly lose money when he is forced to wholesale it.

Obviously it is more difficulty for an individual to make a profit by selling her own trade-in than it is for the dealer. That is one of the main considerations you must consider before deciding to sell your old car yourself. Most people run an ad in the local paper and/or online (www.CraigsList.com) to advertise their trade. If you do this, you need to know what to ask for your car, and I recommend consulting www.kbb.com. This is Kelly Blue Book’s Web site and will tell you about what your car is worth wholesale and retail. Another way to determine this is to ask dealers for your make of your car what they will buy it for. This will establish the wholesale value. CarMax is a good company to consult if there is one near you. Once you establish the wholesale, you should consider a markup of less than what car dealers are asking. A $1,000 markup is about half of what car dealers are marking up used cars for and a good price for you to try. When deciding how much profit you want to make, remember that you’re losing the 6% (or whatever state sales tax applies) sales tax reduction that you earn when you trade your car in. This takes a lot of work and you will be dealing with a lot of “tire-kickers” and people who cannot afford to buy your car. I strongly advise you not to extend credit. Require full payment in cash. There’s also the “security issue” of having strangers visit your home and drive our car. Set a time limit on how long you will try to sell your car. Remember that your used car is depreciating every week and your cost of advertising will climb. I wouldn’t suggest you hang on to your old car for more than a month.

www.Ebay.com, is a good alternative to advertising your car in the newspaper. A lot of car dealers use eBay to retail used cars and it is very effective. There are schools on how to retail merchandise on eBay and eBay has tutorials. There are also a lot of books at any bookstore on this subject. There are companies who will do all the work for you and you only pay them a fee if they are successful in selling your car. If the dealer you are buying your new car from sells cars on eBay (most do), you can ask him if he will post yours eBay along with his cars for a fee. www.AutoTrader.com is also a good way to advertise your car online.

If you fail in your attempt to retail your old car, remember to be careful to maximize the amount you get from your dealer as trade-in. Often dealers will attempt to trade a car in for below wholesale. Be sure you have a firm handle on the true wholesale value of your trade. You can get bids from other dealerships to purchase your car for cash and you can check with www.kbb.com. If you are buying a car from a dealer franchised to sell a different make than your trade-in, be wary. This dealer will likely be unable to offer you as much as a dealer who is franchised to sell the make of your trade. People looking to buy a used Toyota are more likely to visit a Toyota dealership than a Chevrolet dealership. That is why it’s important to get bids from other dealerships before accepting the trade-in offered by the dealer you’re buying your new car from.

Buy Your Next Car Online

Prediction: Five years from now, 90% of all new cars will be purchased online. Currently, in 2018,  it’s less than 30%. The reason this percentage will balloon is simply that the online price is usually your lowest price. More and more car buyers are figuring that out every day. Dealers must give their best price to a prospect inquiring over the Internet because that dealer will have that one chance to sell the car. If they try “the old negotiating game” the Internet prospect will simply choose the lowest price from several other quotes he gets. When my friends ask me to advise them on how to get the best price on a new car, I always tell them to use the Internet.

I’m not suggesting that you don’t visit your local dealer to see, touch, smell, and drive the new vehicles you’re considering. This is very important. You can’t make a valid, final decision on which new vehicle is best for you by solely reading data and looking at pictures on the Internet. Research of that nature is important, but you should finalize your decision with visits to the dealers to experience the vehicle.

Once you have made your final decision on the year, make, model, color, and accessories, you are ready to use your smartphone or PC, and choose the dealer from whom you will buy this specific vehicle. If you’re not handy with computers, ask a friend or relative who is. First go to the manufacturer’s Web site like www.ford.com, www.toyota.com, www.chevrolet.com, etc. You will be able to type in your zip code to find all the dealers of that make within a given radius, usually about 40 miles, giving you 3 or 4 dealers. To expand the radius, choose another zip code further from yours. The dealers within your radius will show their Web site addresses. Click on their Web site and ask for a quote on the specific car you have selected. Most Web sites have a page for what is called a “quick quote”. You type in the year, make, model, color, and accessories. It will also ask you for your name, telephone number, address, if you have a trade (always indicate you do not have a trade), whether you are ready to buy now (yes), and other questions. All you really need to fill out is year, make, model, and accessories and your email address. If you prefer not to be contacted by phone, don’t fill in the phone number. If they require it before you can submit your request, type in any 10 digits so that the Web page will allow you to. If you can’t find a “quick quote” link, just email your request to their Internet sales department.

Depending on your computer skills, this whole process should take less than half an hour. Think of all the time, gasoline, shoe leather, and especially aggravation you are saving compared to visiting several dealerships in person. The time it will take to get back quotes varies from dealership to dealership. You may get some back within a few minutes, some will take a few hours, and some may take a day or two. Believe it or not, some might not respond at all. There are even a few dealers who will not quote a price on the Internet, but try to lure you into their store with false promises. Ignore them. I recommend that you get a minimum of 3 valid price quotes on your specific vehicle. It’s so easy to get quotes, why not get a half dozen or so? You are not necessarily even limited by driving distances. If the best price is from a dealer who is too far away, show that quote to a dealer nearer you and ask him if he will match it.

There are some things that you must be careful about. Be sure that that the price you get is an “out the door” price. That is a price which excludes only federal, state, and local fees and taxes which are usually just for tax and tag. Most dealers in Florida tack on fees of their own which are variously referred to as “dealer fee”, “delivery fee”, “do fee”, electronic filing fee, tag agency fee, etc. Typically, there are more than one of these phony fees. This is illegal or highly regulated and enforced in many states, but not in Florida. These fees vary from around $700 to over $3,000. Be sure that this fee (which is just profit to the dealer) is included in your “out the door” price. Also, be certain that you’re comparing “apples and apples”. When you select your low bid, double check that this dealer is quoting you on the same year, make, model, and accessories as the other dealers. A good double-check is to compare the MSRP. The MSRP, manufacturer’s suggested retail price, will be identical on identically equipped cars of the same model and year. Also, be sure that the car  you are considering will actually be there when you come in. Give them deposit on your credit card to hold the car for you. I they try any “flim-flam”, you can always stop payment on your credit card.

One “trick” you can use on a car dealer who is reluctant to quote you his real out-the-door price is to tell him your bank or credit union requires a signed buyer’s order from the car dealer with total (itemized) out-the-door price. Tell the dealer that gives you the lowest online price to email or fax you a copy of this buyer’s order so that you can take it to your credit union or bank, pick up the check, and bring it to the dealer. If he refuses to do this, you know he’s lying to you about his price. I mystery shopped a dealer last week that gave me an impossible low price on line. I emailed him that I liked the price, would come in the next day to buy the car, but he wouldn’t send me a copy of the buyer’s order. I asked him three times and he would not respond.

Online car buyers are the wave of the future. The retail car business is going through rapid changes and the old fashioned, price-haggling way of buying cars is slowly but surely becoming obsolete. If you haven’t already, now is the time to join the ranks of the smart, sophisticated car buyers.

Getting the Best Price from the Car Dealer

Buying a car involves deciding upon a mind-boggling combination of choices: make, model, trim level, options, accessories, etc… Almost every one of these choices affects the cost of the vehicle. Throw in the vast array of manufacturer rebates and lease and finance incentives and you have a very confusing landscape to navigate. This makes simply knowing the cost of any particular car very difficult.

Almost all car salespeople and sales managers are paid a percent of the profit on the cars they sell. The average percent paid to the salesperson is 30%; he makes $60 on a $200 profit and he makes $1,200 on a $4,000 profit. The profit per car for the average car salesperson in a month varies greatly and can range from as low as $100 (or less) to as much as $10,000 (or more)… even on the identical car! A car salesperson’s success depends on how high a price he can sell you the car, so each deal is different and depends on the dynamic between the salesperson and the customer.

All of this is because of the antiquated system of selling cars, a system that was derived from nineteenth century horse-trading. Back in the day, horse-buyers were far better at negotiating a price fair than car-buyers today. Most people couldn’t afford a horse, and those that could were far better prepared and equipped to negotiate.

These days, some car buyers are very shrewd, savvy negotiators and can hold their own with any car salesman. However, many car buyers are not as well prepared. Young, first time car buyers might not be so shrewd. Buyers whose first language isn’t English can have problems. The elderly, especially widows, are often victimized by car salesmen. The shrewd negotiator can actually buy the exact same car from the same dealer and salesman on the same day for thousands less than the elderly widow.

One of the most important things you can do to prevent paying a much larger profit for the same car than the next customer is to compare prices with different dealers for the EXACT SAME YEAR-MAKE-MODEL with the exact same accessories and exact same MSRP. Remember to use the MSRP, the manufacturer’s suggested retail price and not the dealers price often displayed next to the MSRP sticker.

It can be difficult to get a firm price from a car dealer, but I’ve found a method from my hundreds of mystery shopping reports that works every time. Tell the dealer that you are financing through your credit union or bank, and they require an official signed buyer’s order from the dealership before they will give you the check made out to the dealer. Take that buyer’s order to at least two other car dealers of the same make and ask them to beat that bottom line price. You can also compare that price to the TrueCar price at www.TrueCar.com and the Costco Auto Buying program at www.CostcoAuto.com.

One word of warning is DO NOT VARY FROM THE EXACT CAR YOU SELECTED when you compare prices. Each car dealer you visit will do and say anything to persuade you to choose a different car. The dealer knows that his hands are tied and he must cut his profits if he gives you his best price on the car you’ve selected. He may tell you another car is better, cheaper, or that the car you selected is not available. Persist and get at least three prices on the car you decide on.

Earl’s Top Ten Suggestions How NOT to Get Ripped Off by A Car Dealer

1. There are only two reason you should physically visit a car dealership during the car buying process…to test drive and take delivery of the vehicle you’ve selected. When you visit a car dealership to get pricing and information, you lose control. The car sales people and managers are very good at what they are trained and paid to do…sell you a car TODAY at the HIGHEST PRICE.

2. The best online tools to ensure you get a low, transparent, honest price are www.CostcoAuto.com and www.TrueCar.com. Both online buying services require their certified dealers to offer you a low out-the-door price plus government fees only. Their dealers are not permitted to add dealer installed accessories and “dealer fees” to the quoted price.

3. Always use Consumer Reports, www.ConsumerReports.org, to select the best make and model. Consumer Reports extensively tests all new and used cars for safety, reliability, maintenance and repair costs, cost of insurance, customer complaints, fuel economy, and resale value. They list the best and worst new and used cars.

4. Never finance your car with the dealer without first checking and comparing the rate and terms with your bank or credit union.

5. Finalize your purchase toward the end of the month. Yes, car dealers almost always cut their prices toward the end of the month. The last day of the calendar month is a great time to get an even lower price than you were offered earlier. But, be sure you’ve spent ample time selecting the right car at the lowest price available before the end of the month.

6. Never buy a used car without a CarFax or AutoCheck report, checking the VIN for recalls on www.SaferCar.gov, and having the car thoroughly checked by an independent mechanic.

7. When you make the decision to buy a car, devote at least a week or two to the process. A car is one of the most expensive purchases you’ll ever make. Don’t let your excitement and emotion force you into rushing such an important financial commitment.

8. Always take an extensive test drive in the actual vehicle you’ve decided to purchase. Driving around the block isn’t adequate. No two cars are the same, even two of the same year, make and model. Drive the car under the same conditions that you drive your car daily, over the same roads and highways.

9. Ignore all car dealer and car manufacturer advertising. Car dealers and manufacturers advertise prices to “get you in the door”. These prices are usually understated with fine print conditions that raise the price by hundreds or thousands of dollars.

10. Car dealers make more money after they sell you the car in the “business” or “Finance and Insurance (F&I) office than they did when they sold you the car. My fourth suggestion is to never finance with the dealer unless you check and compare with your bank or credit union. But, even if you don’t finance with the dealer, you will still find yourself in the “F&I” office ostensibly to “sign all of the paperwork”. This isn’t just to “sign the papers”, it’s to sell you extra products and services you probably do not need. Some examples are extended warranties or service contracts, prepaid maintenance, GAP insurance, road hazard insurance, etc. Sometimes these extras are included in your finance contract without your knowledge. Be sure that you buy no extras that you’re unaware of or don’t completely understand and need.

Don't Pay Car Dealers for Nitrogen in Your Tires

It’s bad enough that gas stations now make you pay to inflate your own tires with air. But at least you’re getting what you paid for…air which does what it’s supposed to do and that is to keep your tires inflated.

Many car dealers are now charging customers to fill their tires with nitrogen instead of air. They tell you that nitrogen does not leak from your tires as quickly as air and this means that your tires will stay properly inflated longer before you must add more nitrogen (and pay the dealer for this). What the dealers don’t tell you is that the air that is already in your tires is mostly nitrogen anyway. In fact, 78% of the air we breathe is nitrogen. Oxygen represents only 12% of the air. The rest of air includes carbon dioxide and other inert gases. I’m not sure what the purity of the nitrogen is that they pump into your tires for $199 (this is not a typo…one hundred and ninety-nine dollars for filling four tires full of mainly air). But, you can be assured that the purity of the nitrogen is not 100% and is probably closer to the 78% that regular air consists of.

Even knowing all of the above, I have to admit that I was curious about whether or not nitrogen could prolong tire live and improve fuel economy because I knew that NASCAR drivers used nitrogen filled tires and I heard that Volvo’s came from the factory with nitrogen in their tires. I have a BS in Physics from the University of Florida and a Master of Science from Purdue and these kinds of things interest me. So, to find out for myself, my dealership conducted an experiment. We have a fleet of rental cars and we filled two tires of each car with pure nitrogen and 2 tires with regular air. Over the course of many weeks, we measured the pounds of inflation in the nitrogen and air-filled tires. There was no difference in the inflations of the nitrogen v. s. the air-filled tires. If there is no difference in the inflation, there can be no benefit from nitrogen of better gas mileage or fuel economy.

Consumer Reports also conducted a test on nitrogen in tires vs. air. The bought samples of virtually every tire sold in the USA, filled half with nitrogen and the other half with air. The let the tires sit for one year and then checked the air pressure vs the original. There was virtually no difference in air pressure. Consumer Reports conclusion was that nitrogen won’t hurt your tires, but you shouldn’t waste your money. Air is just as good.

You may have read my column last week, “Beware the Phony Monroney”. In that column I warned you about car dealers that add a window sticker designed to look exactly like the federally mandated Monroney sticker. This is where you should look for dealer installed accessories and additional dealer markups over MSRP. Often these accessories have a high price but a very low cost. In the case of nitrogen in four tires selling for $199, this is exactly the case. Since air is already 78% nitrogen, it costs virtually nothing to extract nitrogen from the air. To be generous, let’s say the dealer’s cost is $10 including labor. That is a 2000% markup when he charges $199.

Just when I thought I’d seen it all, I actually saw window stickers on a car today from another dealer who had actually modified the Monroney label to show nitrogen filled tires. To do this, the dealer actually had to remove the real Monroney label, make the modification showing the nitrogen tires, and re-paste the Monroney label to the window. Federal law requires that a Monroney label not be removed until the vehicle is delivered to the customer. It also requires that it not be modified. This new vehicle was one we had traded for from another dealer and still had the counterfeit Monroney and the modified real Monroney attached to the window. The modified Monroney looked so authentic, that one of my technicians and my service manager inquired of Toyota about the necessity of our carrying nitrogen tanks so that we could refill these tires with Nitrogen. If this could fool a Toyota dealer’s technicians and service manager, it might fool you too.

This dealer also had another charge added to the counterfeit Monroney sticker, a $4,995.00 “Market Value Adjustment”. Most prospective customers think that this is part of the manufacturer’s recommended retail price. They either end up paying too much money for the vehicle or think they are getting more for their trade-in or a bigger discount than they really are. It’s easy to allow someone an extra $5,000 on their trade-in when you have already marked the car up an extra $5,000 over sticker price.

Bait and Switch Advertising

All car dealers pay the manufacturers the same prices for their new cars. Large volume dealers will lead you to believe that they pay less, but this is not true. So, when a car dealer advertises a price for a new car, he has no price advantage over his competition. This isn’t the case with most other products. Large volume sellers like Amazon, Walmart, Target, and Costco can negotiate much lower prices from the manufacturers than smaller “mom and pop” stores. Protective car dealer franchise laws lobbied into law in all 50 state legislatures require auto manufacturers to sell their cars to all their dealers at the same price.

Virtually all the prices for new cars you see advertised are so low that it would be impossible for a dealer to remain in business if he sold more than a very few cars at that price. The reason for this is that, if a dealer advertised realistic prices with a reasonable profit built in, another dealer would advertise a lower price. The dealer who advertised a realistic price is helping his competitor sell a car.

Most of the new car prices you see advertised are below the dealers actual cost. He protects himself by selling very few at this price and counting this loss as a cost of advertising. Next to an advertised car you will see some letters and numbers like, #5632A. That is the “stock number” of the car being advertised. This is all that the dealer does to tell you he has just one at this price. The chances are that if you are not the first person in the dealership on the morning of the ad, this car will be gone. Often these cars never existed, but you are told that the vehicle was sold.

Look for these two fine print disclosures at the bottom of the ad: (1) Price good on date of publication only. (2) Price good with copy of this ad only. These are just two more ways the dealer can avoid selling you the car at the advertised price.

If you’re a regular reader of my column, you understand about “dealer fees”. These fees are additional dealer profits ranging from $700 to over $2,000 that are added to the agreed upon price of the car by virtually every car dealer in Florida. They’re generally more than one dealer fee. “Dealer Fee” has become a generic term for phony fees like electronic filing fee, notary fee, doc fee, tag agency fee and many more. Florida law requires that this dealer fee be included in the advertised price. When the salesman tells you the advertised car has been sold but he has another one “exactly like it”, he can legally add back all of his dealer fees.

As you would guess, the salesman’s commission on an advertised car is often either zero or very small. Having no or a very small incentive to sell an advertised car, he will most likely encourage you to buy any other car.

My recommendation to you is to ignore advertised new car prices. If you must respond to an ad car, call the dealership first and ask if the car is still available. If the answer is no, you have saved yourself a lot of time and aggravation. If the answer is yes, ask if they will hold the car for you. If you must, offer to give them your credit card for a deposit to hold the car. If they won’t hold the car, save yourself the wasted trip.

The only way to get the best price on a new car if you’re dealing directly with car dealers is by getting competitive bids from at least 3 car dealers for the exact same year, make, model, and accessorized car with the identical MSRP. You can do this on the Internet, by phone, or in person. The Internet is likely to give you the lowest price. UseConsumer Reports magazine, the Internet www.edmunds.com and www.kbb.com are two excellent free sources of information), or even your local library. There are two other great ways to buy online, www.TrueCar.com and www.CostoAuto.com.

Dear South Florida car dealer:

You’ve probably heard of Earl Stewart Toyota, located in Lake Park, FL but you might think we’re located in North Palm Beach. We exercise “poetic license” and use North Palm Beach as our location because Lake Park is such a small town, population 8,155 as of 2017, few people know where it’s located. Last year, 2017, Earl Stewart Toyota sold 3,349 new cars and 1,934 used… 5,283 total vehicles!

As a car dealer in a large metro area like West Palm Beach or Delray, you must at least be curious how a car dealer in a small town with a population of just over 8,000 (including those too young and too old to drive) can sell more cars than you. In fact, for the last 14 years, Earl Stewart Toyota sold more vehicles than any new car dealership on Florida's east coast between Orlando and Broward County.

How is this possible? The answer is that Earl Stewart Toyota is selling cars to your customers in your town…Deerfield, Delray, Boca Raton, Boynton, Lake Worth, West Palm Beach, Palm Beach Gardens, Riviera Beach, Wellington, Stuart, Ft. Pierce, Port St. Lucie, Melbourne…in fact all over the state of Florida. Your next question must be “why is this happening?”

All car dealers claim to be honest, transparent, and to “love" their customers. This is clearly not so because the Gallup Organization in its annual poll since 1977 has ranked car dealers last, or almost last, in their “Honest and Ethics in Professions” poll, http://news.gallup.com/poll/1654/honesty-ethics-professions.aspx. At this dealership, they walk the talk.

1. Earl Stewart Toyota posts the lowest out-the-door price on every new and used car.

2. The prices Earl Stewart Toyota's customers are quoted by its sales people and advertisements are the same as its lowest online price.

3. Earl Stewart Toyota does not add dealer fees to the posted, quoted prices. As you know, the dealer fee is the generic term for the hidden profit you add to the price of your cars. You use lots of names to disguise it like electronic filing fee, processing fee, notary fee, doc fee, tag agency fee, dealer services fee, etc. Earl Stewart Toyota's prices are our lowest and out-the-door, adding only what it pays the state of Florida for the sale tax and license plate/registration. 

4. Earl Stewart Toyota does not pre-install dealer installed options or accessories and add these to its advertised prices. All options and accessories on cars it sells you are factory installed, unless you ask for them to install a special option after you buy the car. 

5. Earl Stewart Toyota sells you the car that you came into buy, and does not try to switch you to another car with more profit.

6. Earl Stewart Toyota gladly gives you its lowest price on any car you choose to buy and encourages you to shop and compare its price with the competition. They don’t try to switch you to leasing because dealers make more money leasing. The price its customers pay if they lease is the same price and profit to them if they buy.

7. Earl Stewart Toyota doesn’t ask its customers to trust them without reciprocating that trust. If the customer changes her mind for any reason after the purchase, they offer a100% unconditional moneyback guarantee for one week. This is a full cashback offer, not a “credit” on another car. There are no conditions and no fine print, the customer doesn’t even have to tell them why he/she changed her mind.

8. Earl Stewart Toyota offers real online, one-click Amazon-like car buying. A customer doesn’t even have to come into the dealership or talk to a salesman. They offer free delivery anywhere in Florida. The customer can pay with his credit card, bank transfer, or finance. 

9. Earl Stewart Toyota is the only car dealership I’m aware of that does not take away the customer’s right to sue the dealership if he/she feels she has a reason. All other dealers have an arbitration agreement in the fine print of their vehicle buyers order. This requires customers to waive their constitutional right to their “day in court”. An arbitration agreement requires that any dispute be resolved by a team of lawyers or retired judges. This “team” is chosen by the car dealer and their decisions often favor the car dealer. This is further evidence that Earl Stewart Toyota trusts its customers as much as they ask their customers to trust them. 

10. At Earl Stewart Toyota, there are no automated answer machines, secretaries, or anything else shielding anyone from direct access by all customers. One again, how can one expect customers to trust them if we don’t return this trust. My personal cell phone number is 561 358-1474 and every one of my customers has this number. All my managers…service, sales, body shop, parts, finance, and accounting make their cell phone numbers available to all our customers. We also have five RED PHONES strategically located around my dealership. My customers can pick up any of these phones and be automatically connected to my cell phone. We do this because we know we’re far from perfect and we do make mistakes; but what makes us different from other car dealerships is that our customers can always reach the person in charge who can make it right.

There, Mr. Car Dealer, you now have the 10 secrets to Earl Stewart’s success. All you must do is put them in place and be sure they are followed by your employees. If you do this, you’ll be able to sell as many cars as I do, or maybe even more! Excuse me if I don’t look worried, because it requires a lot of courage, trust, moral integrity, transparency, and HARD WORK.



Yours truly,

Earl Stewart

Should I Pay Cash for My Next Car or Finance It?

Most people don’t have any choice except to finance their cars. However, if you are reading this column, the chances are you are in that fortunate higher demographic income group, and can afford to pay cash for your next car. People who read newspaper columns and blogs tend to be more intelligent and affluent. But, just because you can, is it the right move?

Many people think they can get a better deal on a car if they pay cash. This was true 50 years ago before dealers discovered the new profit center referred to as the Finance and Insurance Department. Today this is not true. In fact, paying cash may even make the actual vehicle cost you more! The reason for this is that car dealers make money when they handle the financing with the bank or with the manufacturer’s lenders like Ally, Honda Finance, or Chrysler Credit. A dealer typically averages about $4,000 on every car he handles the financing on. Therefore, if the dealer’s minimum acceptable profit on the car’s markup was $1,000, he may sell it to someone who he could make $4,000 finance profit on for less than someone who he knew was a cash buyer. Dealers will sometimes sell a car for zero profit or even lose money on the car because they can make a good profit on the financing.

If you plan on paying cash for your next car, my recommendation is DO NOT TELL THE CAR DEALER THIS. Tell the car dealer that that you are considering financing with him. This will help you get a lower price because the dealer still has hope that he can make money when he finances our car. The average profit a car dealer makes financing cars is much larger than he makes marking up the selling price.

My second recommendation is check interest rates and terms with your own bank or credit union before you talk to the car dealer’s finance people. The finance manager (aka business manager) is on commission and paid a generous percentage of the profit he makes by marking up the bank’s interest rates and selling you extra “products” like extended warranties, GAP insurance, and car maintenance.

One argument in favor of financing a car is being able to keep your money invested, and earning a greater return than your interest cost of financing. There has never been a never time in our history that this is true. The bad news is that interest rates are not only at historical lows for borrowing but also for CD’s and interest income. With very good credit, you can finance a new car today for between 2% and 3%, but you can’t find a short federally insured CD for that amount. However, you can find very secure equity and bond investments that will earn considerably more than your cost of interest on financing a car.

There is one very important intangible reason why some people should pay cash for their car. That intangible is called “peace of mind”. My older brother, Doug, grew up during the Great Depression. When he built his new house, he paid cash for it. I couldn’t believe this and was severely critical of him. It was entirely illogical for him to pay cash when he could get a very low interest rate and home mortgage interest is tax deductible. His investments earned him far more than the interest rate on his mortgage would cost. After a while I finally realized why Doug was right and I was wrong. He paid cash for his home because it made him feel better. Growing up in the thirties, like many of my customers did, made an indelible impression on his emotions. Owning his home with no debt made him feel happy and secure and what could be more important than that?

Never Go Car Shopping Alone

I continuously get phone calls, emails, and texts from car buyers who mostly have “already bought a car”. The “horse is already out of the barn” and they want me to give them advice on how to get it back. Most of these car buyers went car shopping and bought their car alone. Most of the complaints are associated with verbal promises by the sales person, not committed to writing. Bringing at least one other person when you are car shopping doesn’t negate the importance of getting all promises in writing, but substantially lowers the chances of a car salesman trying to pull a fast one. The salesman and his manager know that, in court, two people’s word trumps one.

A woman wrote me a letter this week in response to one of my columns. Her husband had recently passed away and this was the first car she had bought on her own. The dealer did not have the model car with the accessories she wanted and was unable to locate one at another dealership. She did not want to decide without seeing the actual car she wanted to buy but the salesman and manger talked her into signing a buyer’s order, assuring her that she was under no obligation to buy. They also included two accessories that she did not want because “the manufacturer required it”. I’ve heard of distributors ordering cars with certain accessories from the manufacturer which essentially makes them “standard”, but never “$250 floor mats” which was one of the accessories she mentioned. I get a lot of emails, phone calls, and letters from people who made a bad deal in their car purchase and want to know how they can get out of it. This is one of the less egregious, but I chose it because it was a simpler and shorter example.

There is strength in numbers when shopping and negotiating to buy a car. In fact, this applies to any serious decision in life. You might be the sharpest, shrewdest negotiator on the block, but your odds of striking a better deal and not get taken advantage of are enhanced when you have others on your side. Personally, I make a habit of always having at least one partner when I am engaged in a serious, adversarial decision-making process. When meeting with those on the other side, I make it a point to arrive with at least as many people as they have present. One reason is the psychological factor. When you are in an office by yourself with 2 or 3 others, it can be intimidating. Another reason is that you always have people on your side to corroborate what was said. If a salesman or a sales manager makes a verbal promise that can be corroborated by a friend or two, it is far less likely to be broken. It will also hold up in court, if it must come to that. Of course, the better solution is to see that all promises are committed to writing.

Buying a car, especially a new car is often an emotional decision. Having a friend or two with you can help you make more of an analytical, logical decision. Another point of view is always useful when making an important decision. Also, having one or two friends with you slows down the process to a level more easily absorbed and understood by you. A friend will often think of a question you should have asked but forgot.

Ideally you should bring someone with you who is skilled in negotiation and experienced in buying cars. However, if you don’t know someone like that, somebody is better than nobody.

By the way, most car dealers are unhappy when prospective customers bring in advisors and friends. Naturally they feel that way because they recognize their chances of making a fast, very profitable sale are diminished.

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.

The Lemon Law: Unhappy New Car Buyers’ NUCLEAR OPTION

Lemon laws are state laws which give rights to purchasers of new vehicles if they find that they have bought a car with a defect that cannot be fixed in a timely fashion by the dealer or the manufacturer. The first lemon law was the results of the efforts of a great California consumer advocate, Rosemary Shahan. Every states lemon law is somewhat different but they all have a lot in common and are aimed at the same result. Most car buyers have misconceptions of the lemon law. These are some the most common ones: The car owners think they are going against their car dealer when they are really going against their car’s manufacturer. If you prevail it costs the car dealer nothing. The manufacturer pays. The law applies only to cars purchased as new, not used. If you win a lemon law dispute, the manufacturer or dealer does not simply replace your car with a brand new on. The amount of credit you win toward a replacement vehicle is arrived at by deducting a charge for the usage of your lemon car based on time and mileage.

The complete lemon law process is a difficult and time consuming task for all concerned…you, the car dealer, and the manufacturer. It’s difficult for you because the law requires specific and extensive documentation. You must have allowed your dealer to try to fix the problem at least three times and you must have detailed written documentation of this. You must be sure that your complaint is clearly spelled out by the dealer on your repair order and that his failure to fix it is also a matter of written record. After three times, you must notify the manufacturer by certified letter that you are invoking the lemon law. Now the manufacturer has one last chance to fix your car. At this time, the manufacturer may take your car to another dealer who he feels is more competent in repairing your car. If the fourth attempt to fix your car fails, your case is assigned to a board of arbitrators. Their ruling is final. This entire process usually takes a very long time. A time of several months is not uncommon. Meanwhile, you’re saddled with a car that has a problem nobody can fix.

When you formally invoke the lemon law with your certified letter, you sever all communications with the manufacturer other than formal, legal communications as dictated by the law. The manufacturer considers you a legal adversary and their attorneys consider anything they say to you as something that can be used against them in the arbitration. At this point they are legally barred from fixing your car or talking to you about fixing your car.

All of the above is why I advise that you use the lemon law only as a last resort…the nuclear option. Put emotion aside and focus on what your purpose should be which is to have a car that you can drive without the problem that has been driving your crazy since you bought it. Your priority should not be to punish the dealer because as I already said, he suffers nothing from your winning a lemon law decision. You are punishing the manufacturer to some extent, but this is “business as usual” to all manufacturers who fight (and usually win) thousands of lemon laws annually. What I’m suggesting is that you might want to consider giving the dealer and manufacturer a little more time to fix your car after the first three attempts. If they look like they are sincere and trying hard, it could save you a lot of time driving your broken car (not to mention the mental anguish) compared to waiting months for the lemon law process to work itself out.

I’m not saying that you shouldn’t tell the dealer and manufacturer that you will invoke the lemon law if you have no other choice. You definitely should do that. You should let both the dealer and the manufacturer know in no uncertain terms that you have meticulous documentation of their failed efforts to fix your car, you have familiarized yourself completely with the specifics of your state’s lemon law, and you will not hesitate to invoke it if you are left no other choice. This will instill a sense of urgency to fix your car ASAP if it’s within their abilities. The reason is the dealer and the manufacturer want to keep you as a customer. In fact, the dealer may stretch to give you a better deal on a new car to replace yours than you would ever otherwise have gotten. He can’t do that once the lemon law has been invoked because he would be trading in a “lemon”. A “legal lemon” has the same stigma as a flood car or totaled car that has been rebuilt. The manufacturer not only wants to keep you as a customer but wants to avoid the cost of arbitration (the manufacturer is responsible for all of the costs), the cost of disposing of a lemon, and the cost of the damage to their reputation by chalking up another lemon laws loss in the record books. For more information about the lemon law, Florida residents can call the lemon law hotline,800 321-5366 or you can click this link: http://www.myfloridalegal.com/lemonlaw.

Caveat Emptor and Car Dealers: You Can Fool Some People All of the Time

Almost everyone has read Abraham Lincoln’s popular saying, “You can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time.” I think Abe meant this to be a positive assertion that government may get away with deceiving us for a while, but in the long run, truth justice and the American way will prevail…and I think he was right.

However, it doesn’t work that way with unethical car dealers and car buyers. It always has been “caveat emptor”, or “buyer beware when it comes to buying or servicing a car. Unfortunately for a buyer to “beware” he must be “aware” …that is to say educated, mature, sophisticated and experienced. This excludes a very large segment of our population including the very young, the very old, the uneducated, those with low I.Q.’s and those not proficient in the English language. This is one reason why our regulators and elected politicians don’t seem to care or act with respect to the rampant unfair and deceptive sales practices of a large number of Florida car dealers? Most elected officials and regulators are lawyers and are highly educated and sophisticated. They don’t have a problem buying or servicing a car. In fact, the car dealer that tries to take advantage of a lawyer, regulator, or politician is asking for trouble.

I’ve been writing this column/blog and broadcasting my radio show, Earl Stewart on Cars, for about eight years. I sometimes feel that I’m “preaching to the choir” when it comes to advising people how to avoid getting ripped off by a car dealer. You, my readers and listeners, largely fall into the category of the educated and sophisticated, “aware” buyer. Most of you aren’t taken advantage of when you buy or service your car because you won’t allow it. Unfortunately, there are enough uneducated, naive, and otherwise vulnerable consumers to feed those unethical car dealers who prey on the defenseless among us. All you must do is read some of the car ads online or watch some on TV. To the educated, sophisticated buyer, these ads are funny, if you can forget the fact that so many fall prey to them and are taken advantage of by the dealers. For example, it’s hard for you or me to believe that anybody would respond to an advertisement without reading the fine print. Many dealers today are advertising prices that, when you read the fine print, are understated by many thousands of dollars. When you or I see a dealer stating that the car price is plus “freight”, we are educated enough to understand that the law requires that the freight cost be already included in the price. A shrewd buyer knows that “dealer list” is not the same thing as MSRP and that a large discount from “dealer list” means absolutely nothing. We know that the “lowest price guarantee” is worthless if the dealer reserves the right to buy the car from the other dealer that offers a lower price.

There are those who argue that all buyers have the responsibility to guard against unethical sellers, to take care of themselves. In fact, that’s the literal translation of the Latin legal term “caveat emptor”…let the buyer beware. That’s sounds good, but what about the elderly widow whose husband recently died and who never had to make the decision on a major purchase in her entire life? What about the young person just out of school with no experience in the real world? How about the immigrant who struggles with English? Should we be concerned about our underprivileged classes who often drop out of school because they must go to work to support themselves or their family? You and I know lots of good people who, for one reason or another, simply can’t cope with a slick car or service salesman.

My bottom line is this, since we can’t rely on our regulators and politicians to protect those who “can be fooled all the time”, maybe we owe it to society to protect these folks. If you know someone who is thinking about buying a car or has a service problem with her car and you feel she may not have the ability to fend for herself with the car dealer, offer your support. If you’re one of the people who needs support, ask someone who can go “toe to toe” with a car dealer to come with you when you are car shopping. By the way, nobody, sophisticated or not, should car shop alone. Two heads are always better than one and it’s always a good idea to have a witness to what was said during a negotiation. And, of course, if you don’t have the time to help a person or you’re that person, you can always call me…I’m always here for you.

BEWARE BUYING A “FLOOD CAR”

FLOOD CARS ARE FLOODING SOUTH FLORIDA

As I’m sure you know, the flooding from hurricane Harvey in Houston and surrounding areas was unprecedented and catastrophic; over 50 inches of rain fell which was the second highest on record in the USA (51 inches once fell Hawaii). About a MILLION cars were “destroyed”. Our most recent hurricane, Irma, caused very little flood damage compared to Harvey. When I say “destroyed”, you may envision a vehicle badly and visibly damaged, but most of these cars caught in the flood look good. Most of the damage and signs of damage are hidden. Many of these cars are brand new. The cars that you see in the aerial picture above are all “destroyed” or totaled by the insurance companies, but lots of them will end up on car dealers’ lots for sale…many in South Florida. 

South Florida is a magnet for “problem” cars. Problem cars are those that aren’t supposed to be sold or that can be hard to sell. For example, cars missing airbags, cars with un-repaired dangerous recalls (Takata airbags), totaled cars that were rebuilt, cars with very high mileage that have had their odometers replaced with lower miles, and, of course flood cars.

The four main reasons that South Florida is so popular with crooked used car wholesalers are: 

(1) It’s the second largest volume retail car market in the world, next to southern California. 

(2) South Florida exports more new and used cars (mainly to Central and South America) than anyplace else. Other countries have very lacks safety regulations compared to the USA. 

(3) More car dealers in South Florida rank below the already low average of honesty and ethics for car dealers (Google “Gallup Annual Poll for Honesty and Ethics in Professions”). 

(4) Florida regulators and legislators are more lax than most other states in the enforcement of rules and laws controlling the bad behavior of car dealers.

Consumer Reports has an excellent article on spotting flood cars. These are the main signs of a car that has been in a flood:

 How to Spot a Flood-Damaged Car

Water damage can be hard to detect, but Consumer Reports recommends that you look for some telltale signs:

·        Inspect the carpets to see if they show signs of having been waterlogged, such as smelling musty or having caked-on mud. Likewise, brand-new carpets in an older vehicle may be another red flag.

·        Check the seat-mounting screws to see if there is any evidence that they have been removed. To dry the carpets effectively, the seats must be removed and possibly even replaced.

·        Inspect the lights. Headlights and taillights are expensive to replace, and a visible water line may still show on the lens or reflector.

·        Inspect the difficult-to-clean places, such as gaps between panels in the trunk and under the hood. Waterborne mud and debris may still appear in these places.

·        Look for mud or debris on the bottom edges of brackets or panels, where it wouldn’t settle normally.

·        Search around the engine compartment. Water lines and debris can appear in hard-to-clean places, such as behind the engine.

·        Look at the heads of any unpainted, exposed screws under the dashboard. Unpainted metal in flood cars will show signs of rust.

·        Check to see if the rubber drain plugs under the car and on the bottom of doors look as if they have been removed recently. That may have been done to drain floodwater.

You should know, that the some of the crooks that sell these cars also read Consumer Reports and can successfully disguise many of the signs you read above. As with computer hackers and the anti-virus companies, there’s a seesaw battle staying ahead of each other. For this reason, I suggest that you insist on a CarFax or AutoCheck report and take the car you’re proposing to buy to a mechanic you can trust. For about $100 he can do a thorough check on your car…money well spent. 

Another precaution you should take is simply don’t buy a car that was titled in the Texas flood area during the time of hurricane Harvey. However, remember that titles can be “washed” and this means some states will allow a new title to be issued on a car that erases all evidence of its previous history. The three worst states are Mississippi, New Jersey, and Pennsylvania. There is no national, federal title law; each state makes up its own. Fortunately for us, Florida has a rigid law, but that protects you only if the car was never titled out of state. If you buy a used car that was sold new in Florida and retitled for new owners only in Florida, you can be sure it wasn’t flood damaged anywhere else.

As if that’s not enough to worry about, remember that lots of Texans didn’t have flood insurance and never had their cars repaired even though they were partially submerged. It takes only about 18 inches of water to destroy the electronics in a car. Modern cars are “computers on wheels”. The car can function fine after its initial submersion for weeks and even months. Many of these uninsured cars were quickly traded in or sold outright by their owners. There is no official record on these cars. Your only hope is a thorough inspection by a trusted mechanic.