The Federal Trade Commission (FTC) has announced a new crackdown on misleading or detective car sales tactics, which includes providing accurate information on prices.
Under the new rules, car dealers would need to provide car buyers with a “true offering price” that should include all other costs except for taxes and government fees.
According to the FTC, there has been an influx of complaints in the last two years due to rising prices and a shortage of available vehicles.
In a Notice of Proposed Rule Making (NPRM), the FTC is aiming to address the issues of extra fees, bait-and-switch advertising, bogus extra products and services, and more.
“The proposed Rule would prohibit motor vehicle dealers from making certain misrepresentations in the course of selling, leasing, or arranging financing for motor vehicles,” the agency said.
Among other things, the rules would require dealers to show accurate prices and be consistent in all advertising and sales conversations. Add-on products with no value would be banned and dealers would be required to keep a record of all interactions and transactions of a sale.
The new rules would also include new protections specifically aimed at lease customers, who are often given deceptive information about their products.
Used car prices have skyrocketed in recent years, which means there’s a bigger incentive for dealers to pressure lease customers into returning their cars at the end of a lease, rather than purchasing them – even if it wouldn’t be in their best interests.
For example, someone with a lease agreement written several years ago might allow the customer to purchase a car for a price that’s currently much lower than its actual value.
The FTC’s proposed rules would eliminate some of the sales tactics used to do this, providing better protection to consumers shopping for new or used cars.
Under the new rules, lease customers would be fully protected. Additionally, it would ban the sale of services or products that add no value and prohibit dealer fees, which are usually added to the price at the end of the sales process and are often hidden amongst other paperwork.