Potential FTC Ruling on Dealer Add-ons, etc

[Dadhawk]

Ran across the current proposed rule by the FTC that would do away with some of the addon and other practices used by car dealers.

Basically covers the following:

Originally Posted by Article Above

Ban bait-and-switch claims: The proposal would prohibit dealers from making a number of deceptive advertising claims to lure in prospective car buyers. This deal deception can include the cost of a vehicle or the terms of financing, the cost of any add-on products or services, whether financing terms are for a lease, the availability of any discounts or rebates, the actual availability of the vehicles being advertised, and whether a financing deal has been finalized, among other areas. Once in the door or on the hook, consumers face the fallout of false promises that don't pan out.

Ban fraudulent junk fees: The proposal would prohibit dealers from charging consumers junk fees for fraudulent add-on products and services that provide no benefit to the consumer (including “nitrogen filled” tires that contain no more nitrogen than normal air).

Ban surprise junk fees: The proposal would prohibit dealers from charging consumers for an add-on without their clear, written consent and would require dealers to inform consumers about the price of the car without any of optional add-ons.

Require full upfront disclosure of costs and conditions: The proposal would require dealers to make key disclosures to consumers, including providing a true “offering price” for a vehicle that would be full price a consumer would pay, excluding only taxes and government fees. It would also require dealers to make disclosures about optional add-on fees, including their price and the fact that they are not required as a condition of purchasing or leasing the vehicle, along with disclosures to consumers with key information about financing terms.

Interesting, but not sure it directly addresses the biggest issue of ADM, unless that fits under junk fees somehow.

[spcmafia]

Originally Posted by Dadhawk

Ran across the current proposed rule by the FTC that would do away with some of the addon and other practices used by car dealers.

Basically covers the following:



Interesting, but not sure it directly addresses the biggest issue of ADM, unless that fits under junk fees somehow.

To my understanding, it basically says "The dealer shall not hide, or add fees without your clear and proper signature that clarifies your understanding of what you're about to buy". So the "market adjustment" or "dealer fees" don't necessarily apply to the new proposed rules. Things like lifetime oil change fee or lifetime car washes fees would be banned.



The biggest thing is that whatever price was first agreed on prior to ordering a car that shall be absolutely in stock, that will be the final price. But it could be whatever the dealer feels like because you would've been signing stating understanding. This could also help those people that have placed a down payment for a vehicle that may very well never get to the dealer and it being non-refundable.





I could also be understanding this completely wrong too.

[Dadhawk]

Yea, it leaves more questions than answers. It does sound like it will be similar to what Scion did where "the posted price is the price" but the posted price does not have to be MSRP. You would think (in a logical, non-dealer world) that this would make it much easier to comparison shop across dealers. I think it could have been simplier though. My rules:

Dealers must sell vehicles at MSRP or below. The final price cannot include any fees other than tax and registration fees.
Dealers cannot add anything to the vehicle that was not a factory option or a dealer installed factory option (listed on the window sticker) unless agreed to in advance.
Dealers cannot charge "document fees" or other administrative charges as these are part of doing business.

[Tcoat]

Originally Posted by spcmafia

To my understanding, it basically says "The dealer shall not hide, or add fees without your clear and proper signature that clarifies your understanding of what you're about to buy". So the "market adjustment" or "dealer fees" don't necessarily apply to the new proposed rules. Things like lifetime oil change fee or lifetime car washes fees would be banned.



The biggest thing is that whatever price was first agreed on prior to ordering a car that shall be absolutely in stock, that will be the final price. But it could be whatever the dealer feels like because you would've been signing stating understanding. This could also help those people that have placed a down payment for a vehicle that may very well never get to the dealer and it being non-refundable.





I could also be understanding this completely wrong too.

That is how I read it. Pretty much boils down to what we have here where the advertised price and the actual price must be the same. May be a tad better than ours since the dealers have no restrictions on "junk" add ons as long as they are included in the advertised price. And yes market adjustment pricing would not be touched by the way that is worded.

[weederr33]

Originally Posted by Dadhawk

Yea, it leaves more questions than answers. It does sound like it will be similar to what Scion did where "the posted price is the price" but the posted price does not have to be MSRP. You would think (in a logical, non-dealer world) that this would make it much easier to comparison shop across dealers. I think it could have been simplier though. My rules:

Dealers must sell vehicles at MSRP or below. The final price cannot include any fees other than tax and registration fees.
Dealers cannot add anything to the vehicle that was not a factory option or a dealer installed factory option (listed on the window sticker) unless agreed to in advance.
Dealers cannot charge "document fees" or other administrative charges as these are part of doing business.

The MSRP should be a must IMO. I despise mark ups, I don't care how rare something is. Especially right now with literally everything being sold well above their actual value.

[Stephen W.]

Originally Posted by Tcoat

That is how I read it. Pretty much boils down to what we have here where the advertised price and the actual price must be the same. May be a tad better than ours since the dealers have no restrictions on "junk" add ons as long as they are included in the advertised price. And yes market adjustment pricing would not be touched by the way that is worded.

Yes any advertised price must match the actual selling price, (less taxes etc.).
However, as you noted, the advertised price will include hidden items. Things like; admin fees, OMVIC charge, tire tax, air tax, and dealer installed items like ceramic coatings and interior anti-stain spray.
I just viewed the documents for our last four cars and found the above listed items were over MSRP. To be clear only the 2011 STi had the paint coating and interior spray. It was a package that the dealer said was put on every car. However after many complaints (the wife's included) this practice was stopped at this dealership.
So there are ways to get around most every law.

[Lantanafrs2]

Some legal stuff going on with South Florida dealers adding charges to lease buyouts. They got bagged.https://www.miamicars.com/business/w...lease-buyouts/ this is an old article. There have been settlements made since

[Lonewolf]

Time to start pinning down the shady dealers here in the US...it's about time.
Many dealers advertise cars at MSRP, then hit you with the market adjustment and junk add-ons once you actually take time to drive down to the dealership and see the car in person, this would help end that.

[soundman98]

a lot of dealers will also advertise vehicles showing all discounts applied, which is just as shady...