It seems like every week we find a new dealer or a group of dealers who are using shady tactics to squeeze every dime from their customers possible. While we’ve done our best to call them out, there are only so many things that can help to deter the practice. Thankfully, it seems like the Federal Trade Commission (FTC) might be about to drop the hammer on dealers who charge customers for services and add-ons that “provide no benefit.”
The specific language of the proposed rule is far too lengthy to completely include here so we’ll focus on the most important sections. The main goal is to prohibit dealers from making “certain misrepresentations in the course of selling, leasing, or arranging financing for motor vehicles.”
What that means in practical terms is that dealers wouldn’t be allowed to charge for products that have no benefit. That includes “nitrogen-filled tire related-products or services that contain no more nitrogen than naturally exists in the air” along with coverage that would simply duplicate what is already covered by the manufacturer’s warranty.
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“As auto prices surge, the commission is taking comprehensive action to prohibit junk fees, bait-and-switch advertising and other practices that hit consumers’ pocketbooks,” FTC Bureau of Consumer Protection Director Samuel Levine said in a statement.
In addition, the regulation would require the dealer to post a detailed list of all the fees and charges including add-ons online. That list would include every single thing sold by the dealer not provided by the automaker itself. That would expose every single shady fee that dealers try to swindle buyers with.
The FTC even wants the dealer to be required to list in writing the “Cash Price without Optional Add-ons.” They would have to itemize the offering price, any discounts, rebates, or trade-in valuation, and required government charges to the customer. Should the customer decline to buy the vehicle at that price, and instead agree to additional add-ons, the dealer would need to get that in writing.
The agency will now open a 60-day window for public comments on the proposal, no. P204800. The proposal passed 4-to-1 for now but until the comment period concludes, nothing will be formalized.
