Feds Urged To Safeguard Consumers From Unscrupulous Auto Sellers

Proposal Submitted One Year Ago

For almost a year now, the Federal Trade Commission has proposed initiatives to safeguard car shoppers from any deceitful car retailers and unsavory vehicle-purchasing activities. Despite these strategies, there have been no recent strides towards progress.

Seventeen members of Congress, comprised of both senators and representatives, are applying pressure on the Federal Trade Commission (FTC) to move their proposals ahead, based on a document attained by Reuters.

Several U.S. legislators, including Senators Ed Markey, Ron Wyden, Cory Booker, Brian Schatz, and Elizabeth Warren, as well as Representative Pramila Jayapal, have sent a demand to the FTC fervently asking for substantial revisions to be made to the car-selling transaction.

Acquiring premium cars such as the Rolls-Royce Phantom surely is an enjoyable emotion; however, people obtaining Ford F-150s and Toyota Camrys sustain massive dealer increases and concealed costs. For instance, a Bronco Raptor was sold for $34,000 more than standard suggested retail price, and this was one of the less expensive ones.

Samuel Levine, the director of the FTC’s Bureau of Consumer Protection, highlighted the importance of safeguarding consumers from “junk fees, bait-and-switch advertising, and other practices” when he originally put forward the proposal. He believes that it is essential to protect people from these deceptive activities.

The debatable methods involve superfluous merchant add-ons, like certain dealers suggesting nitrogen-filled tires for an extra fee as well as certain monetary and assurance plans. This new regulation seeks to save shoppers both time and money while advancing fairness among trustworthy dealers.

The FTC plans to take action on junk fees, but also wants to bring more clarity to vehicle pricing. Legislators are pushing for a federally-mandated base price that will include all essential parts and components, thus eliminating any confusion regarding the actual cost of the car.

The initial proposition from the Federal Trade Commission mandated that dealers would have to integrate more extensive information into their advertisements, including for instance the car’s cost both with and without financing and excluding non-compulsory features. Any discrepancy from the stated price will call for a binding contract amongst the consumer and a dealership superior.

Despite the attractive nature for customers, not everybody has championed the potential regulations. Objections to them have been raised.

The National Automobile Dealers Association avowed that the projected regulations could disturb the standard selling procedure and damage small enterprises. In addition, six senators and the Coalition for Automotive Enhancement – comprising General Motors, Toyota, and Volkswagen – highlighted qualms concerning the plausible deleterious aftereffect, raising inquiries about the FTC’s estimated costs and accentuating the load on customers from exorbitant control.

In a letter from September 2022, two senators expressed their concern over a proposed regulation by the Federal Trade Commission (FTC). “If implemented, this proposal would create confusion for customers, increase the time it takes to purchase a vehicle, reduce consumer choice, necessitate more paperwork, and impose onerous record-keeping demands on small businesses. Even more concerning is that the FTC does not appear to have performed any consumer testing to determine if the new regulatory framework would be effective in practice,” they wrote.