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 firstname.lastname@example.org. 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.
Editor's note: This column originally appeared in 2006.
In previous columns, I 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 three 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.
Twenty to 40 percent 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.
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 means nothing if the dealer just added a market adjustment addendum for an amount equaling or exceeding the discount.
When you see a number like this next to the price of a new car, it means 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. Your chances of buying one of these are slim and none.
Credit problems 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 percent 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 number 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.