FTC Proposes New Regulations to Curb Deceptive Car Dealerships

Photo by Stratman2

We’ve all been there.

You see a car dealership advertisement and go to the dealership and tell the unusually jovial salesperson wearing a plaid jacket “I want the car in the ad!”

The salesman replies with a pitifully lame excuse, “oh, that’s the internet price, not the in-person price,” or “you know, we just sold that car this morning,” or they agree to sell you the car for the advertised price but when you get to the Finance and Insurance manager’s office there’s another $10,000 in add-ons and fees on the sales contract!

Or maybe you get the sales price, trade-in value and finance rate you are looking for, but the F&I manager pressures you into upcharges for nitrogen filled tires. Or maybe you get the sales price, trade-in value and deposit amount you are looking for and the dealership backs out of the deal when you tell them that you are not financing through them.

You are not alone. Over 100,000 people per year file complaints with the Federal Trade Commission regarding car dealership sales practices.

Well, the FTC has listened and are proposing new rules which they are soliciting comments from the public regarding. The deadline for all comments to be received is this Monday, September 12th 2022.

The proposed FTC regulations can be summarized as four new rules: (1) prohibiting the sale of any add-on product or service that confers no benefit to the consumer (no more up-charging Mom for nitrogen filled tires for her Honda Civic), (2) requiring accurate pricing disclosures in dealers’ advertising and sales discussions (the advertised price of a vehicle must be the selling price of the vehicle), (3) non-discriminatory practices for cash buyers (no more jacking up the sale price if the customer is not financing through the dealership’s finance and insurance “F&I” office), and (4) dealers must obtain express informed consent before tacking any charges in the F&I office (no more forcing the consumer into extended warranties, wheel and tire coverage, undercoating, etc., unless the consumer expressly says they want those products).

In response, it has been reported that the Automobile Dealers Association has sent out a memo to all their member dealerships requesting that dealerships flood the FTC with comments regarding the proposed regulations as unnecessary due to consumer dealership interactions and protections being just fine without the proposed governmental rules. The Automobile Dealers Association also included sample “Customer Letters” people could use when commenting to the FTC how great car dealerships currently behave.

Have you experienced and feel strongly about car dealership deceptive practices? Comment to the FTC on the proposed new rules by clicking here. Remember to do so on or before Monday.