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Now browsing: Hometown News > Business Columns > Earl Stewart

Earl Stewart
This Week | Archive


The top 10 ways to get shafted by a car dealer
Rating: 1.8 / 5 (5 votes)  
Posted: 2013 Aug 02 - 08:53

Earl Stewart is the owner and general manager of Earl Stewart Toyota in North Palm Beach. The dealership is located at 1215 N. Federal Highway in Lake Park. Contact him at www.earlstewarttoyota.com, call (561) 358-1474, fax (561) 658-0746 or email earl@estoyota.com. Listen to him on Seaview AM 960, FM 95.9 and FM 106.9, which can be streamed at www.SeaviewRadio.com every Saturday morning between 9 a.m. and 10 a.m.

(1)Believe the newspaper and TV ads. It never ceases to amaze me how outrageous and unbelievable the car dealers' claims are. Just when I think that they can't get any worse, I see one that tops them all. Last month, one dealer was advertising in the newspaper and TV that if you bought one vehicle from him you got a second vehicle for free. The "facts and fine print" would reveal that the first vehicle was a very expensive one with a huge markup of over $6,000 and the second vehicle was only the "use" of one for two years... a lease. My father always said, "If it sounds too good to be true, it probably isn't." Astoundingly, the general manager of this dealership had the gall to say on TV, "This is not a gimmick!"

(2)Buy a car on impulse on the first day you start shopping. Can you believe that this is the way most people buy cars? It truly is. There is something about a new car that excites people and appeals to them on an emotional level. People let their feelings short circuit their logical thought processes. Overcome that emotion that tells you that you must drive home that shiny new car right now. Go home and think about it. Talk it over with your spouse and friends. Research the model of car you looked at and the price on the Internet. Always drive the car you chose before you sign any papers. You should take at least a week or two in the decision making process before you buy a car.

(3)Trade your old car in to the dealer you buy from without shopping its value. Most people have no idea what their trade-in is worth when they come in to buy a new car. They rely entirely on the appraisal by the selling dealer. The dealer can make it appear that he is giving you a lot of money for your trade by taking some of the high markup on the new car and showing it as part of the appraisal value. Check Kelly Blue Book (kbb.com) and Edumnds.com on the Internet. Get at least three bids from other dealers of the same make for your trade. Make the purchase of the new car and the sale of your trade two separate transactions. Remember that you do get a sales tax break by trading in your car to the dealer you buy from.

(4)Use the dealer's financing without checking with your bank or credit union. Shop for the best price on your financing just like you shop for the best price on your trade-in and the best price on new your car.

(5)Believe this, "This low price is good today only". This is one of the favorite ruses used by car sales people and dealers. In 99 percent of the cases, you can buy that car for the same or an even lower price later. The only time that you can't is when factory incentives expire on a certain date, typically at the end of the month. If that is the claim, demand to see the written factory incentive by the manufacturer.

(6)Fall for this, "Make me a written offer with a deposit and I will submit it to my manager." This is the standard operating procedure at most car dealerships. This is to get you psychologically engaged in the buying process. Once you have signed a buyer's order and written out a check, you will remain in the dealership for a while and are more likely to buy. The salesman knows that. Insist on getting their best price on the car you have selected. You should never make the first offer. Once you have their price, compare it with at least three other prices from other dealers on the same make and model.

(7)Follow this advice, "Take this new car home and see how you like it." This is the famous "puppy dog" technique so named because once you take a puppy dog home overnight, who has the heart to return it the next day? You, your neighbors, and friends will see that shiny new car parked in your driveway. It sure looks good! How can you explain to anybody that you didn't buy it?

(8)Agree to this, "I'll buy the car if you can get my monthly payments below $___.__" Most of us tend to think in terms of our monthly budgets. We might feel that we can afford a new car as long as it costs us less than $350 per month, but there is a big difference between $350 per month for 36 months and $350 per month for 72 months. I recommend that you finance a car for no more than 42 months, preferably 36.

(9)Believe the salesman when he says, "You have my word on that." Be absolutely sure that every promise or commitment made to you by your sales person is in writing and signed by a manager. That salesman may not work there when you have occasion to ask for that "free loaner car" that he promised you anytime you bring your car in for service.

(10)Fall for this, "All dealers charge a dealer fee and we can't remove it from the invoice." In fact, all dealers do not charge a dealer fee. I don't. But unfortunately most do charge this "gotcha" ranging from $495 to $1,000. It is true that Florida law (which should prohibit dealer fees entirely) requires that the dealer fee appear on all invoices. If you charge just one customer a dealer fee, you must charge everybody. The state legislators, in their infinite wisdom, decided if a car dealer is going to take advantage of even one buyer, he must take advantage of all of the buyers....never discriminate. But the loophole in this stupid law is for you to demand that the dealer reduce the price of the car by the amount of the dealer fee, making it a wash.




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