By on October 14, 2008

Automotive News [sub] brings us the story of Earl Stewart, the Florida Toyota dealer who is waging a one-man war on dealer fees. Born into the car sales business, Stewart noticed one day that his children did not share his love for the family business. Asking his son why he didn’t want to sell cars, Stewart says “He told me he thought car dealers sometimes have a dishonest image. And I had to admit he was right.” After a battle with colon cancer, Stewart decided to make changes in how he conducted business. The first step was removing the $495 “dealer fee” his store had charged, dropping profits by some $200 per unit. But since dropping the fees, he has seen business at his dealership double, and Stewart has been reborn as an anti-dealer-fee crusader. Taking the fight to the radio, television and his blog, Stewart has alienated other dealers who say he is simply advertising his own business. “The world doesn’t need Robin Hood anymore,” one anonymous critic told Stewart. “What we also don’t need is a one-man show trying to run down every dealer on the planet for the good of his own profits.” After attempting to make dealer fees illegal in Florida, and suing another dealer for slander, Stewart still believes in his principles… and his business model. “I know a lot of guys out there depend on these dealer fees — especially right now when the economy is so bad,” says Stewart. “But I did away with them, and my business got better. I can be proud to talk to my kids about what I do for a living. That’s important to me, and it’s important to my sons.”

Get the latest TTAC e-Newsletter!

19 Comments on “Toyota Dealer Wages War on Dealer Fees...”


  • avatar
    Gardiner Westbound

    I have encountered only perfunctory resistance rejecting non-statutory documentation and administration fees.

    Smart buyers wait for the new model sales frenzy to die down. It also gives the manufacturer time to resolve the inevitable design and production bugs that plague new car introductions. If purchasers are breaking down the showroom doors for the latest hot model the dealer has little reason to accept a low profit offer. But, if his storage compound is full of ‘em and inventory carrying charges are pending he may grab your quick cash and skin the next rube with more money than brains.

  • avatar
    Dave M.

    I love to shred dealer “pad-ons”, and in the Houston area I’ve found a total of TWO Toyota dealers (out of 9) that don’t have $600-1300 extra sealant/etc. packages attached to every vehicle’s Monroney sticker. And I love the excuse “It’s done at the factory/port/whatever”. No it isn’t – thus the separate sticker.

    One of my favorite recent experiences was this past weekend at a Chrysler/Jeep dealer. They had 35-40 Crossfire coupes and verts – all with $3000 ADMs. Uh – you know, Mr. Dealer, that many of these are leftover ’06 and ’07′s, right? I haven’t seen 35-40 Crossfires on the roads of the 4th biggest city in the past 4 years.

    The $3000 ADM was also on all Patriots and Compasses. The two vehicles Jeep might actually be able to sell at near MSRP.

    What a bunch of tools.

    Power to you, Mr. Stewart.

  • avatar
    toxicroach

    Does Honda have a policy against that? The highest markup I’ve seen over there is $95 bucks for some wheel locks.

  • avatar
    dpeppers

    tsk tsk tsk……mean car dealers…..

  • avatar
    John Horner

    Good for Mr. Stewart! Instead of grumbling about how those no good customers deserve the treatment they get at dealerships, he is trying to make his business one his family can be proud of.

    We need more business people like him.

  • avatar
    turbosaab

    Right, except he is trying to use the government to strongarm everyone else into doing thing his way. I don’t like dealer fees, but I *really* don’t like business trying to enlist the threat of violence (government laws) in order to tell other businesses what to do.

  • avatar
    faster_than_rabbit

    My local Toyota dealer worships at the altar of Toyoguard, which is a couple of cans of black spray paint applied to the underside of the car at the dealer. This is supposed to protect the underside of the car from meteorites and to quiet road noise. (TTAC really needs a ::rolleyes:: smilie…). That and the trails of slime left by the salesmen pretty much ruled that dealer out on a recent car-purchase excursion. We didn’t even get to a test drive…

  • avatar
    doktorno

    Dave M, that is true, the dealer has no say in the add-on crap. Gulf States toyota is the exclusive distributor for the Gulf Coast market, and as part of the deal they get to add value add crap to the sticker. Dealers they do not like get sealant packages and DVD players but some get less crap.

  • avatar
    ihatetrees

    Anyone with a few bucks and some internet savvy can figure what local dealers pay for a new car. Knowing that, I’ll gladly pay a few hundred more to a dealer with a solid rep.

    That said, this Stewart guy may be on to something with honest pricing.

  • avatar
    50merc

    doktorno: “Gulf States toyota is the exclusive distributor for the Gulf Coast market, and as part of the deal they get to add value add crap to the sticker.”

    That’s what I see on Toyotas at dealers here. I don’t know if Toyota’s distributors are wholly-owned subsidiaries or just franchised agents, but you know if Toyota didn’t want their cars larded up with hugely overpriced wax jobs, etc., they’d stop it. I wish the car pricing services would admit to reality and disclose the ADM’s typically stuck next to the Monroney stickers. The local Hyundai dealer routinely tacks an additional thousand bucks onto the MSRP. You’d think the factory would stop that so more Hyundais would get sold.

    “He told me he thought car dealers sometimes have a dishonest image. And I had to admit he was right.” sometimes?

  • avatar
    rudiger

    Dave M.: “And I love the excuse “It’s done at the factory/port/whatever”. No it isn’t – thus the separate sticker.”I’ve seen where they’re tacking the ADM packages directly onto the Monroney sticker. Frankly, I’m not buying the “There’s nothing we can do about it” BS. I mean, how hard would it be for a sleazeball dealer to get a bunch of blank Monroney stickers (or simply try to match the original font and retype their own stuff directly onto the original sticker) and add anything they want onto them, then claim complete helplessness.

    OTOH, for the most part, Toyota and Honda dealers are nowhere near as bad as the domestics for the shameless ADM crap. Indiscriminant ADM (on even slow-moving vehicles) is just one more reason the domestics are on their way out, and I can’t say I feel a bit sympathetic.

  • avatar
    npbheights

    Ok, I’ve got to comment on this one as I live in Palm Beach County, FL and bought a car from Earl Stewart Toyota on June 26, 2008.

    I walked in, approached a seated sales person, told her exactly the car I wanted. 2009 Corolla XLE, Super White, Bisque Interior Cruise Control, Carpet Mats. No ToyoGuard, no 5 Disk CD changer which it seemed almost all XLE’s are built with for and extra $200.00. Anyway, she found one at a dealer down in Broward County and told me about the no-dealer fee (which I already knew about) and then she quoted me a very fair price, she told me that they automatically take a certain percentage off MSRP, add tax, tag and title and thats it. I had done tons of research and had one of those Consumer reports New Car pricing guide price in my head. I counter offered a price of another $500.00 less. She went to the manager and five minutes later, they accepted my offer. It took 2 days to get the car in and i breezed through finance (3.9% for 60 months -$303.76 a month) The finance lady did try to sell me prepaid maintenance (which was a good deal in hindsight) and an extended warrantee, (Who needs a 100,000 mile warrantee on a Corolla? Talk about something that will never get used) and I was out the door. Awesome buying experience. We are talking about a car that was not in their inventory, was in high demand back in June (best selling car in US that month, with Matrix of course)

    They very well known around here for selling Prius’s for MSRP plus tax tag and Title out the door. No ADM, no dealer prep, no ToyoGuard if you don’t want it and no dealer (stealer) fee. People from all over the country go there to buy them and ship or drive them home.

    If you get all of your Factory scheduled maintenance done at his dealership they give you free tires and batteries for life, unlimited mileage, no bull.

    There are also red phones on the sales floor, waiting room and body shop that if you pick them up, they automatically call Earl Stewart’s cell phone if you have any problems with anyone at his dealership he will personally handle it.

    Let me tell you, they are constantly busy, the sales floor is buzzing, there waiting room is full of people watching a big screen TV thats always on FOX NEWS … eeew … thats probably my biggest complaint about the place. :-O hand me the REMOTE!!!

    Earl Stewart also has a radio show on a small am station in town (I think its called Seaview AM960) on Sunday mornings where he answers callers questions about cars.

    His image and the image of his dealership is so customer friendly its almost obnoxious.

    Anyway, the place is awesome… it is more than just no dealer fees… and no, I don’t work there, or know the family personally. I will buy my next Toyota there when the time comes, that’s for sure.

    Oh and if you want to find out more (there is a Palm Beach Post article about the no dealer fees on there), or want a Prius w/o extra fees, or find out the current rebates and incentives on all of the Toyota line up go to http://www.earlstewarttoyota.com. Its not fancy looking but is informative.

  • avatar
    helius

    toxicroach:

    A month or so ago, I saw a V6 Accord coupe (auto) at my local Honda dealer with a $2000 or $3000 ADM. Don’t remember the exact amount, as I was simply shocked that they think they can get away with that large a markup in this market.

  • avatar
    ronin

    How does removing a $500 dealer fee drop profits by only $200? What does that additional $295 go towards? Should we assume the dealer is now eating some $295 expense? If so, they should publicize it.

  • avatar
    Zarba

    When I bought my wife’s Pilot last year, we had the same experience.

    I had e-mailed all the local Honda dealers with my specs, and asked for their best “Out the Door” price.

    One dealer had the lowest price, but when I called to confirm, they added on a $1,000 “Appearance package”, which was a sunroof deflector, mud guards, and ‘fabric protector’ (On a car with leather seats!).

    When I asked why they didn’t include this in their price, the sales weasel said it was “a standard package on all their cars”. I pressed and asked him what part of “Out the Door” he didn’t understand? “Well”, he said, “We DID give you our price, but that NEVER includes dealer options.” WTF???

    Another dealer located the car, met my price, and delivered it in three days. No hassle, no haggle. In and out the door in 1 hour.

    Best part? They located the Pilot at another local Honda dealer, one that had priced it almost $800 higher. That dealer e-mailed me later and asked if I still wanted the car. I informed him that the dealer I chose got the car from them and closed the sale at my price, and they lost the sale because they would not meet my price.

    No response.

    I ONLY negotiate via internet and e-mail. I get everything in writing BEFORE I get to the dealer. I arrange the financing, and all I have to do is deliver a check when I get there.

    If consumers will do a little homework and research, they can be armed with the information they need to make an informed decision.

  • avatar
    Airhen

    I think it’s great that he does this (other then to try and make it a law). If other dealers don’t like it, then compete.

  • avatar
    npbheights

    actually the Ford dealer down the street from him advertises that they do not charge a dealer fee either but the only problem with them is the fact they are selling Fords. I wanted a car that was worth more than a few hundred dollars after I was done paying for it.

  • avatar
    50merc

    Good for Earl Stewart. He’s a shining example for other car dealers to emulate. Hope he’s beaten cancer and he’s gotten a new long lease on life.

  • avatar
    joeaverage

    I had the same good experience with the Cleveland, TN Honda dealer in ’99 after almost getting the short end of the stick from 5-6 other Honda dealers.

    Final place I walked in, took control of the transaction. Firm but friendly. Told him I wanted to drive a particular CR-V. We did. Got back and told him we had 30 mins to make a deal or I’d walk. No dealer add-ons, no dealer wax jobs or undercoating. He gave me a price, I countered and he countered me up $100. We had a deal. Was close to invoice price (my independent research) but they stuck me with a $295 paperwork fee. Still I was satisified.

    Local dealer got to do my warranty work. Rear strut that holds the glass open on the hatchback was leaky. Fixed in 30 mins. Also the driver’s rear wheel had too much negative camber. Fix in a couple hours.

    Salesman there saw me and realized that his antics cost him a sale. He first insisted that any color but white was hard to come by, insisted there was not such a thing as a 5speed manual for the CR-V, and insisted that his best deal included a 14% interest rate. We went through our credit union for less than half that on a first car loan (new, used or otherwise).

    I hate working with dealers on a car – new or used. The whole process is the worst. My relatives have all bought Saturns in the past and the customer experience there was excellent before and after the purchase. Same at CarMax according to a friend.

    I can’t believe that people at dealerships can sleep at night. I can’t believe they are surprised when customers quit coming through the door.

    Have been in too many dealerships where the whole process is set up for a good customer screwing.

    I use my local dealership for parts. Occasionally. If I can do better online then I do that. I do all of my own work. The vehicle has been excellent.

    More power to Earl Stewart though I agree with someone above that said they hate to see people or companies use the gov’t against their competitors.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Authors

  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Faisal Ali Khan, India