The Federal Trade Commission (FTC) hopes to change that. A new set of proposed rules announced Thursday will ban auto dealers from using top-end-switch advertising practices or charging meaningless fees.
The first of the proposed rules would explicitly prohibit ads that deceive customers into initiating a purchase, knowing only the actual price or terms of purchase that differed from what was marketed. This usually takes the form of advertised low sticker prices, zero percent APR financing and other hooks that are missing from the actual proposed contract. Driving one or two vehicles after an inspection, hugging a salesman, and going through a credit check, these bait-and-switch situations can feel confusing and even manipulative.
(Photo: Eric McLean / Unsplash)
Another pair of proposed rules would prohibit vendors from applying surprise or fraudulent “junk fees”. These are the miscellaneous items that are tacked on the final price just before signing: “nitrogen-filled” tires, paint protection, UV coating, and other (often invisible) add-ons that aren’t so conveniently imposed on unsuspecting buyers. Under the new rules, the FTC will require dealers to provide customers with car prices Without These add-ons, and only add additional items after the customer has given their explicit, written consent.
One final rule closes other offers: dealers are required to disclose the actual “offer price” of a car to customers, excluding only taxes and government fees. The value of any add-ons must be stated in writing with a statement detailing that such add-ons do not require the purchase or lease of a car.
Automotive customers make up a significant portion of FTC complaints. Despite previous efforts to engage law enforcement and curb fraudulent auto dealer practices, car sales and maintenance complaints generate about 10,000 FTC complaints annually. A preliminary regulatory analysis estimates that the net economic benefits of the rule will sit at about 29 29 billion over a decade.
So far, the FTC’s proposed rules are only; They still don’t have auto sales guides. The FTC is allowing 60 days for comments and questions from the public, which will help guide any amendments and determine whether the rules have been implemented.
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