I just got out of my car, and I had this catchy tune in my ear that I just can’t seem to shake. Not a song. I don’t have the range of hearing that allows me to enjoy music on the radio. (To understand my hearing, try listening to the Beatles in perfect stereo with only one speaker turned on- I miss all of the lower and higher ranges of the song). But this is not another rant about my hearing.
No, I can't stop singing a “jingle” 1-800 Kars for Kids. 1-800 Kars for Kids, 1-800 Kars for Kids, donate your car today. Ever notice that the commercials are clearer, and louder, and easier to understand than the regular radio broadcasts? TV too.
Now when I am in my car, and I am able to hear the radio, I listen to either National Public Radio (NPR) (WNYC) which is commercial free, except for when they are asking for donations, or to 1010 WINS, where give your car to charity commercials run all day long.
So what’s that all about?
First of all, to be a not for profit corporation, you need to have a charitable purpose (raise money for charity), form a corporation (there are services like Blumberg’s, XL services, Gerald Weinberg, PC, where you give them 3 names, and a charitable purpose, and a few hundred dollars later, bingo- you have a tax free corporation. Now you have an accountant file with the IRS for whatever the current type of tax free corporation is, and you’re ready.
Now you go to an ad agency, come up with a catch tune, or copy, and make an ad. Then you go to the radio station, and buy commercial time. Now they have all kinds’ of deals. Radio is cheap. And not for profits get special rates.
Every car has two values: Wholesale and retail. There are books published every month that list these values (NADA, GALES) for every car with sub sections to add or deduct for added accessories, or high mileage, etc. They call these prices average wholesale or average retail or average loan given on any year and make automobile up to a certain age. When they get too old, then they don’t publish the values. However that doesn’t mean that a car that is over 5 or 6 years old (whatever it is) has no value, at that point the car dealers know from their own experience what the cars are worth.
Now besides price lists that are broken up by retail and wholesale, there are car dealers that are wholesalers and retailers.
The person in the car dealership, who sells you a new car, is a new car dealer. He pays you very low wholesale for your car, leaving room for him to make a profit when he sells your car to the wholesaler. Of course the wholesaler has to make a profit when he sells the car to the used car dealer who then resells the car for retail to the consumer for high retail.
Now in addition to reselling the cars as cars, there is another whole market for the so called “burdens” that the commercials talk about, cars that don’t run, bad body rot, etc, are dismantled, the parts resold, and anything left is sold as scrap metal.
Cars without titles, requires a form to be sent to the Motor Vehicles for a replacement Title. If you are in a hurry, for the cost of federal express, DMV will overnight you the title, so losing your title is no big deal.
Now they also offer vacations. This is easy. People have donated their time shares that they no longer want, so they have access to free vacations all over the place.
So what do they do with the cars?
They sell them.
Who are we dealing with?
Car dealers.
But what about the charity? Where do they come in?
They talk about high administrative costs of charities. There is a car dealer/wholesaler who is really running the show, who pays the charity so much a car, or charges the charity so much a car for services, so that the charity winds up with a couple of dollars per.
But if you take how much they spend on advertising, and how much they spend on the company that buys and sells the cars, I have to wonder about how much of the gross dollars that they raise actually go to charity. 1%?
Andrew Cuomo- where are you?
And speaking of advertising, there is an ad I hear on the radio where the guy says that he just bought 1 Million copies of a book, home remedies that the doctors don’t want you to know about- and he is going to send it to you for free- except for $4.50 shipping and handling.
What can this be all about?
Well, suppose it cost him between ten and twenty five cents a copy (a dime and a quarter). The real cost of mailing is another dollar. Now there is the answering service and the radio/tv time. So what can the profit be on $4.50? One Dollar? Sell all One Million, make a Million dollars?
Is this about putting together a mailing list to work or sell?
Or is this about collecting credit card numbers for future identify theft or credit card theft?
Andrew Cuomo- are you there?
And you know why they say “Money Back Guaranteed?” Because studies have shown that most people would never ask for their money back. (there are always some). But most people are too embarrassed. But the effect on the buying public is, wow this must be okay- they guarantee to give you back your money if you aren’t satisfied.
Several years ago on Staten Island there was a guy who was selling a tape of the month club deal. You would have a catalogue, or get mailings every month to buy new tapes, similar to the book of the month club. Except you were to buy several new cassette tapes every month. (This was before CD’s).
The first month you got 10 tapes for $9.99 and then you bought more tapes every month for five years. When you signed up, you got a free tape player.
Now what he did, was figured out the value of the tapes- 5 years of 3 tapes per month @ $9.99 per = $1798.20.
But in order to make this deal happen, the people had to finance the $1,798.20 over 5 years. But since you couldn’t secure tapes not purchased, he secured the tape deck. Basically he was selling an $80 tape deck for $1,798.20.
Most people that sign up for things like this, will buy some tapes, and then stop buying, but keep paying until it is paid in full. Most people will not ask for their full money back guaranteed (which of course this conman wasn’t offering). If you really purchased the tapes every month you got a good deal. But statistically, you only bought for a few months, and kept paying the entire amount. Greenberg then would sell all of the $1,729.20 loans to one of those well known finance companies at a 24% discount $1,366.32).
Now a lot of people started complaining when they tried to quit, and realized that they had bought 5 year contracts to buy tapes, and started law suits in civil court, but everything was legal, so that didn’t help the buyers. The Advance got wind, the former District Attorney Murphy started something, and he left town, with his money, never to be seen or heard from again.
And some people bought tapes every month, and some paid the bills, and those who didn’t got sued by the finance company.
Always remember that when a deal sounds too good to be true, it probably isn’t.
…………………..to be continued
UPDATES
MY HAIRCUT:
Well, on Monday after my haircut at the barber college, I went back to my regular place, First Impressions at 2047 Victory Blvd, next door to Schaefer’s, between my office and Starbucks on Victory Blvd., and Nicholas re-cut my head to straighten it out, and now I have to let it grow so he can cut it again, to fix it.
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