Buying a car can be a daunting experience, with many consumers feeling like they are navigating a minefield of shady sales tactics. From bait and switch schemes to hidden fees, some dealerships have long employed deceptive practices to squeeze extra money out of unsuspecting buyers. However, a new ruling by the Federal Trade Commission (FTC) aims to crack down on these unethical practices and protect consumers from falling victim to these scams.
The FTC’s new „Combating Auto Retail Scams“ (CARS) rule is set to take effect later this year, targeting four of the most common scams that car buyers encounter. These scams include the bait and switch tactic, junk fees, targeting military members, and burying the true costs of a vehicle. The goal of the CARS rule is to eliminate these deceptive practices and ensure that consumers are treated fairly when purchasing a car.
One of the most common scams that car buyers face is the bait and switch tactic. This occurs when a dealership advertises a car at an incredibly low price to lure in customers, only to reveal that the car is no longer available or that the advertised price was a mistake. Under the CARS rule, this type of false advertising would be illegal, and dealers would be required to be transparent about pricing, discounts, rebates, and inventory.
Another shady practice that the CARS rule aims to address is the imposition of junk fees. These hidden charges, such as fees for unnecessary services or warranties, can significantly inflate the total cost of a vehicle. With the new rule in place, dealers would be required to obtain explicit consent for every charge and disclose all fees to the buyer upfront. This would prevent dealers from sneaking in extra charges without the buyer’s knowledge or approval.
Military members have also been frequent targets for unscrupulous dealerships, who often misrepresent their ties to the military or provide false information about issues that service members care about. The CARS rule would make it illegal for dealers to deceive military personnel and their families, ensuring that they are not taken advantage of during the car buying process.
Lastly, the CARS rule would require dealers to disclose the full „offering price“ of a vehicle, including all costs except basic government fees like registration. This would prevent dealers from hiding fees or excluding important expenses from their initial pricing, giving buyers a clear picture of the total cost of the vehicle.
While the National Auto Dealers Association has raised concerns about the new rules, claiming that the FTC has overstepped, consumer advocates are applauding the crackdown on deceptive practices that have become all too common in the industry. If enacted, the FTC estimates that the CARS rule could save car buyers over $3.4 billion and 72 million hours per year in headaches. Dealers who operate ethically would also benefit from the elimination of competitors who use deception as a sales tactic.
In conclusion, the CARS rule represents a significant step towards protecting consumers from shady car dealership practices. By addressing common scams such as bait and switch tactics, junk fees, targeting military members, and burying the true costs of a vehicle, the rule aims to level the playing field and ensure that buyers are treated fairly when purchasing a car. While the new rule may not completely eliminate the stress of car buying, it should help to eliminate some of the shadiest schemes that have plagued the industry for far too long.