How to tell the true story about google ratings for car dealers and how to spot the "bandits"
My Car Guru Podcast
How to tell the true story about google ratings for car dealers and how to spot the "bandits"
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Term
addendums
Addendums are extra costs that a car dealership might add on top of the original price of a car. They can make the car more expensive than what you first saw advertised.
Term
MSRP
MSRP is the price that the car manufacturer suggests you should pay for a new vehicle. It's a starting point for buying a car, but the final price can be different.
Term
disclaimer
A disclaimer is a note that gives important information about something, like a car price. It often tells you about extra costs or conditions you need to know before buying.
Term
fine print
Fine print is the small writing in ads or contracts that has important details. It's easy to miss, but it often has key information that you need to know.
Term
dock fee
A dock fee is an extra charge that car dealerships might add to the price of a car. It's meant to cover the costs of getting the car ready for sale, like transporting it and preparing it for customers.
Term
processing fee
A processing fee is an extra charge that car dealerships add to cover the costs of handling paperwork when you buy a car. This fee can be different from one dealership to another.
Term
protection package
A protection package is a set of extra services or products that car dealerships sell to help keep your car safe from damage. This can include things like special coatings for the paint or warranties that cover repairs.
Term
nitrogen
Nitrogen is a type of gas that some car dealerships use to fill tires instead of regular air. It can help keep the tires inflated longer and may reduce the chance of blowouts, but not everyone thinks it's necessary.
Term
marketing margin
Marketing margin is the extra amount a dealer adds to the price of a car. It helps them make money even when they offer discounts.
Term
dealer fees
Dealer fees are extra charges that car dealerships might add when you buy a car. They can include things like paperwork fees and other costs that aren't part of the car's price.
Term
registration fees
Registration fees are the costs you pay to officially register your car with the government so you can drive it legally. These fees can change depending on where you live and what kind of car you have.
Concept
Formula One
Formula One is a type of car racing where very fast cars compete in different races around the world. The cars are built with the latest technology and require skilled drivers to handle them.
Term
spot delivery
Spot delivery means you can take the car home even if the dealer hasn't finished all the paperwork. But be careful, because if the financing isn't approved later, you might have to return the car.
Term
extended warranty
An extended warranty is like extra insurance for your car that covers repairs after the original warranty ends. It can save you money if something goes wrong later on.
Term
interest rate
The interest rate is what you pay the bank or lender for borrowing money to buy a car. A higher interest rate means you'll pay more each month and overall.
Term
monthly payment
The monthly payment is how much money you pay every month for your car loan. It includes the money you borrowed plus interest.
Term
loan term
The loan term is how long you have to pay back the money you borrowed for your car. Longer terms mean smaller monthly payments but more interest paid overall.
Term
bad credit
Bad credit means you have a low score that shows lenders you might not pay back money you borrow. This can make it harder to get loans or make them more expensive.
LIVE
Hey folks, Lenny Lawson, the car guru right here with you excited about what I have to
talk about today.
I'm a little bit angry.
I'm angry about Google ratings and how they are abused by a lot of dealers.
I'm going to give you a little insight into what happens when it comes to Google ratings
for car dealers.
Again, there are good car dealers and there are bad car dealers.
There's no semi-good or semi-bad.
The really bad ones often will have overall Google ratings in the 4.5 range.
But if you scan those ratings and really go down through there, if you see a bunch of
5 stars, more than likely those were paid for.
Now that's unethical, isn't it?
To say, hey folks, before you leave, if you would just go in and give us a 5 star Google
rating, we'll pay you an extra $100.
Oh sure, we'll do that.
See they haven't had the chance to even evaluate what they've got.
They're still in a state of euphoria and this is what happens.
Here's the trick.
Scroll down until you see the 1 star ratings.
Don't look at the 5 star ratings.
Look at the 1 stars and read them.
Why is it 1 star?
Was it something simple like, well we couldn't get weighted on, they were too busy and took
a while for the sales people to come out and greet us so we left 1 star?
That's understandable for a business like on a busy Saturday or Friday where you don't
have enough sales people to wait on the customers and some people won't like that, I understand
that.
Or was it because maybe they didn't get their tags fast enough for them and that really
upset them because they were going on vacation, had to go on vacation with a temporary tag.
That happens.
Okay, that's not really a reason I don't think to give somebody 1 star.
But some people will, they'll rate you down because of something like that.
Our Google ratings are 4.8 and that's out of a possible score of 5.0.
And I scroll down through there and if I see 1, there aren't any 1 stars, but if I see
any that are like 3 or something like that, it's usually something pretty, you know, just
some type of an administrative thing, something minor, something that we need to tune up.
I get it.
But you don't see the ones where the customers are saying, we were in there for 5 hours.
They promised us our payment would be 500 a month and we got our first payment book.
It was 750 a month.
That's worthy of a 1 star.
That's one you want to pay attention to.
Or I went in to cancel a warranty.
We decided to cancel our warranty because we couldn't afford it.
And so I went in and they said, no problem.
Two months later, it's still not canceled and nobody will talk to me.
Or I got a piece of mail saying that I'd want a big screen TV or something else, you know,
a bunch of other prizes.
I went in, had no intentions of buying a car, but they hit me with the pressure and I have
never felt so uncomfortable in my life and I didn't win anything.
And I'm just upset because of what they put me through.
Now, what am I doing?
I'm not making these up.
I'm summarizing them.
But this is what you will see with a dealership that has problems.
And their problem basically is about their ethics or their lack of ethics.
You know, when you see a dealership that has massive addendums on their vehicles where,
you know, you have a price online for a vehicle, it's brand new.
It says that you can buy it for, let's see, MSRP $23,760.
There's a discount of $6,709, gets it down to $17,051.
That's a pretty cheap new car, isn't it?
Well, then you scroll down to the disclaimer, which practically nobody does.
Oh, what is the disclaimer?
That's the fine print.
You know, with the large print, give the fine print, take it away.
I don't think that's in proverbs, but it probably should be.
So, yeah, this disclaimer or fine print says that there are an additional,
in addition to the price that they have on their website for that particular vehicle,
you've got to add back $4,974 to that price.
So, you know, that discount really isn't much of a discount anymore.
And what are those ads for?
Well, there's about $1,000 dock fee, processing fee.
Let's see, protection package, marketing margin, and nitrogen.
So, these are things that are added to the price of a car.
Now, there are a lot of dealers that do this.
You need to find them before you do business with them.
You need to seek them.
All you have to do is go to their website, check out their prices,
and then scroll down to the disclaimer, the fine print.
If they've got a bunch of fine print.
Now, let's say that they have a processing fee or a documentary fee.
Okay, all dealers have that now.
They range anywhere from $500 to $1,000.
That's just the way, well, I'll take that back.
There's in larger cities, they're upwards of $1,500 now.
Okay, as long as you know that.
But what about addendums?
What about other charges?
What about something called marketing margin?
What's that?
Or sometimes it's called market value adjustment.
What is that?
That's just extra markup the dealer has slapped on his vehicles
that allows him to discount his vehicles more.
So, if I've got $5,000 in additional charges in the fine print,
and I'm showing a $6,700 discount up where the MSRP is,
and then I have a discount, and then I have a net price,
then really, I'm only discounting my car about $1,700.
I'm not discounting at $6,700.
The rest of it's just fluff.
Is that legal?
Unfortunately, in a state of Tennessee, it's illegal.
It may or may not be legal in your state.
There's a lot of dealers that do illegal things.
It may not be legal in your country,
if you're listening in some other country.
But there are a lot of state laws,
and there are some federal laws that dealers flaunt regularly,
just in the interest of profit.
Just taking advantage of customers, and they don't care.
They see this as a game.
And so, your only defense against that
is to read the fine print, and to be very skeptical
when you walk into a car dealership to buy a car.
I hate that it has to be that way.
You know, one of the best things to do,
and I've said this many times, is to get a quote,
forget about what they're saying on their website,
pick a stock number of a vehicle that you like,
make sure you like all the options,
and get them to put a full quote in writing,
which includes all fees, all extra charges,
and have them either email it to you or fax it to you,
with a statement that this is the final price
and there will be no additional charges.
I've heard of people driving all the way to Alabama,
or Illinois, or some dealership in some far off land,
thinking that they had a deal,
and when they get there, everything changes.
Maybe they sold the car, you know,
even when they leave a deposit, they'll sell a car.
What are you gonna do about that?
What are you gonna do to them?
But you have no power over them.
You can't, well, I guess you could sue them,
but who wants to do that?
Who wants to mess with that?
You're just trying to buy a new car.
But these practices are rampant,
and you have to be diligent when it comes to
dealing with these people.
But you can spot them, check out their Google ratings,
just scroll down, look at them.
And when you get with a one star, read that one.
You see another one star, read that one,
because that's who they really are.
I'll be back in just one minute.
Okay, I am back.
So let's review real quickly.
So what are you gonna do first?
If you're shopping online,
you're gonna check their Google ratings,
and you're gonna look for the ones.
You're gonna ignore the five stars.
You're gonna look for the one stars,
because the one stars are who they really are.
And then you are going to look at particular vehicles
on their website, see the price,
and then you're gonna scroll down to the fine print
or the disclaimer, as it's often referred to.
And you're gonna read that.
And if there's anything added back
other than taxes, tags, registration,
and a processing or doc fee,
you're just not gonna go to that dealership,
because that says everything about who they are
and how they operate.
They're already lying to you
on their website of all things.
It's right out there in public.
But the public doesn't do what I say.
They don't read the disclaimer.
They say, oh, there's a great price.
There's so much cheaper than you, Lenny.
No, they're not.
Read the disclaimer.
Okay, so what are the other traps
that I'm gonna try to keep you out of?
Well, the first one is called the Foursquare Trap,
and it's just a negotiating ploy.
And it's designed to get you to focus
on the monthly payment,
which is the wrong thing to focus on.
You wanna hit the four targets,
as I describe in the My Car Guru guidebook,
negotiate the selling price,
negotiate the trade value,
negotiate the terms of the loan,
and the aftermarket items, all separately.
Don't lump them all together
and just look at a monthly payment.
Well, the Foursquare is a negotiating tool.
I mean, I learned how to do this, I don't know,
30 years ago, and I decided, you know, that's deceptive.
I'm not gonna do that in my dealership.
I can see how it would really increase,
or potentially increase gross profits
and selling prices of cars,
because people don't know what they're paying for the car.
They focus on the monthly payment.
And it's real easy to pack payments that way,
and I said, no, thank you.
And so we decided to disclose everything,
including the sales tax and any fees that we had,
anything that the customer had agreed to buy,
including tags and registration and all that,
so that they could see what they're really paying
for the car.
But there are still a lot of dealers that use Foursquare,
and you'll know it when they come to you
and there's a blank piece of paper,
and they put a vertical line in the middle
and they basically divide the page into four boxes,
and then they start presenting the numbers to you in that way,
and they want you to focus on the bottom right-hand box,
which is focused on down payment and the monthly payment.
That's all they want you thinking about,
because that's what affects people the most initially,
is how much do they have to pull out of their pocket
and pay as far as down payment is concerned,
and how much is their first monthly payment gonna be,
and how far in the distance can that be
before I have to make it?
Can we postpone the payment for 90 days?
Folks, if you are extremely worried
about those kind of things,
maybe you shouldn't be buying a new car right now,
or maybe you don't need to be spending that much.
So if you see a salesperson whooping out
a blank piece of paper and dividing it into four boxes,
just tell them to stop right there.
Said, I'm not doing that.
I wanna see what we can buy the car for,
and then we'll talk about my trade-in,
which you're gonna pay me for my trade.
Then we'll talk about how much money I plan to pay down
and what the monthly payments are gonna be
based on that, those two numbers,
and my payoff if it's involved.
Because that's the way you buy a car, folks.
That's the way you buy anything, really.
I mean, you go to Walmart and you walk up to the Legos,
like I did this weekend for my grandkids,
and there's this box that has this really cool
Formula One garage with two Formula One race cars,
and Henry just loved it, so I pulled it off,
and it was 1999.
And I know that Walmart isn't gonna negotiate,
and so I'm okay with that.
I'll pay $19.99 to make Henry happy.
Now, if they had some kind of payment on there,
I could, instead of paying $19.99,
I can buy it for $2.58 a month for 48 months.
I'd say, you know, I'd rather pay $2.48 than $19.95.
I mean, that's a whole lot easier to swallow.
I mean, that's just basically some French fries at McDonald's.
Yeah, I'll do the financing deal.
And so I sign up for that and having no idea
what I'm paying for those Legos.
Do you see what I'm talking about?
That's no way to buy a car either.
So beware of the four square trap.
The other trap that a lot of buyers fall in,
and a lot of this is driven by pure emotion.
You want to buy it today.
The dealership wants you to buy it today.
What you need to do is be ready to walk away.
Don't buy it today.
Go home and think about it.
Have them print out a buyer's order.
That is all the breakdown on the selling price, the trade,
all the things that we've talked about.
You know what the interest rate is.
You've got the monthly payments.
Not that you're not willing to go back in the next day
and negotiate some more,
which you probably will do after you talk to me
if you call me at 423-552-2020
and we review your buyer's order.
And I look up what they're paying for your trade in
and what they're selling you the car for.
I can say, hey, that looks like a pretty good deal to me.
Or you are getting your head taken off.
This is a terrible deal.
You don't need to go back there.
You just need to go someplace else
or tell them that this is what you're willing to do.
See, that's the value of having a car person in your corner,
a car guru even.
And we can do all this by text.
Just send me your picture of your deal sheet.
423-552-2020.
I'll analyze it and send you my response.
That's not hard.
But yeah, this is serious trap.
I have to buy it today.
Folks, you are gonna buy today, right?
No, we're not buying today.
And then some other manager comes and talks to you
and that doesn't work.
He can't convince you.
And then another manager comes to talk to you
and that doesn't work.
And they're all scratching their heads trying to figure out,
what can we do to make these people buy today?
But you just gotta take that momentum away from them.
The momentum of a deal, it works against the consumer
because the dealership is really good at taking advantage
of emotionalism, create as much want as possible
and get the buyer to forget about their needs.
Forget about the constraints that they have
as far as budget is concerned or timing or whatever.
They need to take that thing today.
So you also have to be ready to walk
if the salesperson talks over you.
Ignores what you're saying.
They're not listening.
You can tell, right?
They try to steer you towards something
that you didn't come to see.
You know why he's doing that, don't you?
Because the one he's trying to show you has a bonus on it.
If he sells that particular car,
he gets a $1,500 bonus
because it's been there over 300 days.
We didn't tell you that.
He just tells you what a great buy it is
and why you should consider this instead of that.
But that's not what you want.
That's not the color you want.
It doesn't have a sunroof.
It doesn't have the features that you need.
But he's gonna do everything he can to get you buy it
because that's the best deal on the lot.
But you don't need to worry about the deal.
You need to get the right car first
and then worry about the deal.
And a couple other bad signs
if they ask you what your target payment is.
Real early in the process.
What kind of monthly payment you guys looking for?
Don't ever, ever answer that question
unless you just say this.
The monthly payment is irrelevant at this point.
We want to find the right car
and then we want to get the best price we can on that car
and then we'll move forward from there or not.
Is that fair enough Mr. Salesperson?
Like I say, you can be nice but firm.
Don't let them control you.
You control them.
And then finally, if the dealership, the atmosphere there
looks more like a carnival than a business.
We put balloons up at Gateway.
I mean, it's just, it's a festive thing.
But if they've got balloons up
and they have police tape up
and they have a money machine in the showroom
and there's a bunch of tables all over the place
and a bunch of strange looking salespeople out there
smoking and scratching and just leering at people
as they come in, that's a bad sign.
It really is.
If you just get out of your car
and just kind of stand there and look around,
you look over and you see about eight salespeople
just looking right at you at one time.
That's, they're wondering who their next victim is gonna be.
That's the way they look at you.
I swear it is.
It's sad.
Okay, I'll be back in just one minute.
Okay, I am back.
Here's one more word of caution for those of you
who have marginal to bad credit.
And they can't finalize the paperwork today.
You've decided for better or worse
that you wanna buy that car.
Let's say that you've negotiated it correctly.
You hit the four targets square on the head
and you really did get a good deal.
But they say, well, we don't have it approved yet,
but we're pretty sure that we will.
So we're just gonna go ahead and let you have it.
Put the brakes on right there and say, no, thank you.
I don't wanna take it home until I know it's mine.
Oh, yeah, we're 99% sure that it's gonna get done.
This is called a spot delivery.
And here's what's gonna happen.
Let's say that you take delivery of the car on a Saturday.
When you come back to sign the final paperwork on Monday,
everything will have changed.
The amount of money that you're having to pay down
will go up.
The amount that the monthly payment is gonna be
is gonna go up.
Some of the things that you really wanted.
Let's say you really wanted an extended warranty.
Nope, that's going away because they can't get it financed.
They can't get the bank to carry it, as they say.
So everything has changed and you're all upset,
but you've been driving that car all weekend
and your neighbors have seen it
and you showed it to your grandmother
and they're so proud of you and everything.
You don't wanna disappoint everybody,
so you just go ahead and sign up.
No, negotiations start over.
Let's go back to square one, Mr. Salesperson.
I'm not doing this.
I'm not paying this extra payment.
You're gonna have to cut the price on the car.
You're gonna have to give me more for my trade.
You're gonna have to cut the interest rate
because I'm not paying $624 a month for 84 months
at 17%.
I may have bad credit and I was born at night,
but I was not born last night.
So you're gonna have to get your pencil sharp.
You ever heard that saying?
You better sharpen your pencil.
That means cut the price.
Find something that you can do.
I'm done doing.
Your turn to do.
Get me approved by somebody else or I'm leaving.
I'll find another car.
They'll scramble.
They'll get it done, but not a few.
Don't ask.
You see, they think they have the leverage
because you've been out in the car.
They've assumed that you really, really want it.
And I've actually heard some horror stories
where the customer was told, say,
well, folks, we've already sold your trade in.
And if they told me that, I said,
well, you better get it back.
You're gonna break somebody's heart
or I'm gonna go get a lawyer.
You threaten to sue us?
Yeah, that's exactly what I'm doing.
Go get my car.
I want my car, my keys.
I know it's parked out back.
Just go get it.
You haven't sold it to anybody.
You would probably know this about that dealership
if you had checked their Google ratings, the one stars.
See, people that are really, really upset,
they won't give you any,
if they could give you zero stars, they would.
But there's no option to give zero.
So they just give you one.
And then they tell the story
of why they're giving that dealer a one.
And that's why you need to read the Google ratings.
Skip through all the good ones
because the bad ones are who they really are.
If you have any questions about this kind of stuff,
give me a call 423-552-2020 or send me an email
to Lenny Lawson2020 at gmail.com.
And I'll send you a copy of the My Car Guru guidebook,
which explains all this stuff in detail.
Okay, I'll see you next time on the next My Car Guru.
You
About this episode
Lenny Lawson dives into the often-misleading world of Google ratings for car dealerships, exposing unethical practices like paid reviews and deceptive pricing tactics. He emphasizes the importance of scrutinizing one-star ratings to uncover a dealer's true reputation. Listeners learn how to navigate common traps, such as the Foursquare negotiating tactic and the dangers of spot deliveries for those with bad credit. Lenny shares practical advice on obtaining clear quotes and understanding dealership fees, urging consumers to be vigilant and informed when buying a car.
Original notes
Email Lennie at [email protected]
My Car Guru Podcast
My Car Guru...Lennie Lawson
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22:42