Lawmakers Pressure Feds To Protect Customers From Dodgy Car Dealers

Jun. 25, 2023 9:25 AM ET byJacob Oliva Government /12 Comments

The initial proposal was submitted a year ago.

It has been a year since the Federal Trade Commission (FTC) submitted proposals toprotect car buyers from dubious car dealersand shady car-selling practices. There have been developments after those proposals, but none were in a forward direction.

Now, a group of 17 lawmakers, consisting of senators and representatives, are pressuring FTC to push the proposals forward, according to a document obtained byReuters.

Senators Ed Markey, Ron Wyden, Cory Booker, Brian Schatz, Elizabeth Warren, and Representative Pramila Jayapal, among others, have written a letter to the FTC, calling for significant changes to the car-buying experience.

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Ford

While buying ultra-luxury vehicles like theRolls-Royce Phantomwarrants a pleasurable experience, the rest of theFord F-150And Toyota Camry buying population suffers from insane dealer markups and hidden charges. One example was a Bronco Raptor selling for $34,000 over MSRP, and it wasone of the cheaper examples.

In the original proposal, the director of the FTC's Bureau of Consumer Protection, Samuel Levine, emphasized the need to protect consumers from "junk fees, bait-and-switch advertising, and other practices."

These questionable practices include unnecessary dealer add-ons, such asnitrogen-filled tiresoffered by some dealers with an extra charge and specific financial and insurance packages. The proposed rule aims to save consumers time and money while promoting fairness among honest dealers.

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Ford

In addition to addressing junk fees, the FTC plans to enhance vehicle pricing transparency. Lawmakers are advocating for a federally mandated offering price that includes all necessary equipment to eliminate confusion regarding the actual vehicle cost.

The original FTC proposal stipulated that dealerships would be required to include more comprehensive information in listings, including the car's price with and without financing and the price without optional features. Any deviation from the listed price would require a signed agreement between the customer and a dealership manager.

While all of these sound good, especially for the consumers, there has been opposition to the proposed regulations.

2022-2023 Ford Bronco Raptor Front Angle View

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2022-2023 Ford Bronco Raptor Forward Vision

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Ford

The National Automobile Dealers Association claimed that the proposed regulations would disrupt the standard sales process and harm small businesses. Additionally, six senators and the Alliance for Automotive Innovation - representing General Motors, Toyota, and Volkswagen - express concerns about the potential negative impact, questioning the FTC's cost estimates and highlighting the burden on consumers from excessive regulation.

"If implemented, this proposal would confuse customers, lengthen the transaction time to purchase a vehicle, limit consumer choice, increase paperwork, and mandate burdensome new record-keeping requirements on small businesses. More troubling, the FTC appears not to have done any consumer testing to ascertain whether its new regulatory regime would work in practice," the senators said in aletter from September 2022.