- A US appeals court has overturned buyer protection rules introduced by the Biden administration.
- The rules were designed to prevent dealers from charging junk fees and to force clearer pricing.
- A Texas dealer group and the National Automobile Dealers Association challenged the rules.
Joe Biden’s attempt to get a fairer deal for American car buyers has been shot down only days after the former president left office. A US appeals court has overturned rules introduced during Biden’s time in office that were designed to bring greater transparency to the car-buying process and prevent customers from being charged for stuff they didn’t need.
The legislation proposed in 2022 and finalized last January required dealers to provide up-front pricing in their advertisements and sales patterns and also to gain approval from the customer before adding charges for items they might not want or need. Examples of these junk fees include charging for an oil change on an EV. The Federal Trade Commission had estimated the rules would save American drivers $3.4 billion, not to mention millions of hours of their time.
Related: FTC Says 90% Of Buyers Paid $2,000 More Than Advertised At Stellantis, GM And Ford Dealer Group
But who on earth could have objected to car buyers getting treated with a bit of respect? As if you hadn’t guessed already, it was car dealers who weren’t happy with the rules. A Texas dealer group and the National Automobile Dealers Association (NADA) objected to the legislation and challenged it in court.
NADA President Mike Stanton even had the gumption to claim that allowing dealers to return to offering misleading prices and charging junk fees was “a great outcome for consumers,” according to Reuters.
His take was that the overturned rules would have made the car-buying experience worse for drivers because it “would have added massive amounts of time, complexity, paperwork and cost.”
Two of the three judges at the 5th Circuit Court of Appeals found that the FTC should have given advance notice of the new rules, but a third refused to back the decision, saying Congress had already given the FTC the authority to issue consumer-benefitting regulations.
Judge Stephen Higginson said the rule was drawn up “after a decade of roundtables, comments, and over 100,000 consumer complaints, many leading to federal and state law enforcement actions against unfair and deceptive motor vehicle dealer practices.”
How do you feel when you go to a car dealership to buy a new vehicle? Do you get the sense that you’re getting a fair deal, or have you been the victim of junk fees and bait-and-switch pricing tactics? Leave a comment and let us know.
