FTC proposes new rule to eliminate ‘deception’ and ‘fraudulent add-on products’ in car-buying process

Shankmeyster

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We can only hope this goes through and then a law on markups as well.

https://www.marketwatch.com/story/ftc-proposes-new-rule-to-eliminate-deception-and-fraudulent-add-on-products-in-car-buying-process-11656346579#:~:text=A proposed rule from the,get buyers in the door.
The Federal Trade Commission says it wants to protect car buyers and is seeking comment on a proposed rule.


The Federal Trade Commission is considering a move to eliminate junk fees and bait-and-switch advertising from the car-buying process, according to a notice of proposed rulemaking.

“For many Americans, buying a car is the most expensive purchase they will ever make,” FTC Chair Lina Khan and Commissioners Noah Phillips, Rebecca Slaughter, and Alvaro Bedoya said in a joint statement Wednesday. “And in this time of rising prices and supply shortages, it is vitally important that Americans not be deceived when purchasing a car, particularly when it comes to ‘junk fees’ or unnecessary add-ons.”

The proposed rule, which the agency is seeking comment on before deciding on whether it’s made final, would ban dealers from engaging in certain types of deceptive advertising, including over a car’s cost and terms of financing, just to get buyers in the door. If adopted, the rule would also block dealers from charging “junk fees” for unnecessary or surprise add-ons, such as nitrogen-filled tires that “contain no more nitrogen than normal air” or additions that the consumer did not first provide clear, written consent to, according to an FTC statement.
What’s more, dealers would have to disclose the “true offering price” to potential buyers, or the full price a consumer could expect to pay excluding taxes and government fees, the FTC said. A preliminary regulatory analysis estimated that the rule’s net economic benefit would be more than $29 billion over a decade, the FTC said.
(It’s unclear how the car-dealing industry will react as a whole; a spokesperson for the National Automobile Dealers Association, which represents more than 16,000 new-car dealers, said the group was still reviewing the proposed rulemaking.)

As for whether such provisions are necessary, the FTC said that over the past three years, it’s received more than 100,000 complaints annually regarding automobiles, adding in its announcement about the proposed rule that “tricks and traps” make it difficult for buyers to comparison shop. Khan, Phillips, Slaughter, and Bedoya said in their joint statement that FTC staff interviews with consumers showed buyers were unaware of which add-ons they’d purchased, if they realized they’d purchased add-ons at all.

Still, FTC Commissioner Christine Wilson said in a dissenting statement that while there was no question the commission’s staff was “motivated by the best of intentions” with their proposed rule, “regulatory schemes frequently fail to generate promised improvements for their intended beneficiaries.”

“Instead, they tend to create market distortions that stifle innovation, increase costs and prices, and ultimately harm consumers,” Wilson said.

Khan, Phillips, Slaughter, and Bedoya said in their joint statement that their proposed rule was “crafted carefully not to impose unnecessary burdens on the mostly small businesses in this industry.”

 
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IronFusion

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20yr ago this was "a home"

"For many Americans, buying a car is the most expensive purchase they will ever make"

20yr from now, it may be a sandwich the ways things are headed.


I would rather stupid people pay a "tax" and get squeezed into paying more for useless crap their greedy needy eyes glimmor for, than for the baseline vehicle price to be raised because dealers can't fleece the sheep.
 
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Shankmeyster

Shankmeyster

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Except that dealers don't dictate base price. Only the manufacturer can do that. They have already been talking about getting rid of dealers altogether and only having service departments with delivery/test drive areas while you order your car online, thereby cutting out the part where you are paying INSANE doc fees and for add ons you never wanted.
 


Velonici

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I was wondering if they were going to mention Nitrogen filled tires. Ive seen dealers want to charge $200 for that crap. If they want to include it it should be free. I know it was for my moms Subaru.
 
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Shankmeyster

Shankmeyster

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Yeah, nitrogen in your tires is bs. Look it up. Most machines they use don't even have nitrogen in them so I don't know how they are magically pulling nitrogen from the air to put in your tires.
 

IronFusion

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Yeah, nitrogen in your tires is bs. Look it up. Most machines they use don't even have nitrogen in them so I don't know how they are magically pulling nitrogen from the air to put in your tires.
Air is ~80% N2. They may catalyze out the O2.
 
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Shankmeyster

Shankmeyster

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Like you said, regular air is already mostly Nitrogen and then it's compressed and pumped into your tires. Paying for that little extra Nitrogen is just a ripoff.

 

 
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