Purchasing a car can often feel like navigating a complex maze filled with deceptive practices. Protect yourself from shady tactics before heading to the dealership.
The recent push for the FTC’s CARS rule, planned for 2025, aims to combat deceptive dealership practices that mislead consumers. This initiative comes as a response to various tactics that have long plagued car buyers, putting financial strain on many unsuspecting individuals. The rule targets the heart of several unethical practices in the industry, focusing on issues such as car dealership scams, bait and switch tactics, and hidden junk fees.
The FTC CARS Rule Explained
The Federal Trade Commission (FTC) intended to introduce the “Combating Auto Retail Scams” (CARS) rule by July 2024, but this timeline has been postponed to 2025 due to ongoing legal challenges. When enacted, the CARS rule will significantly change how dealerships operate, compelling them to maintain transparency in their pricing and advertising practices. This new regulation focuses on four main deceptive strategies that consumers frequently encounter: bait and switch practices, junk fees, military exploitation, and cost concealment.
Understanding Bait and Switch Tactics
One of the most frequently encountered schemes at car dealerships is the bait and switch tactic. Imagine spotting an appealing advertisement for your dream vehicle at what seems like an unbeatable price. Once you arrive at the dealership, however, you may receive disappointing news—the vehicle is no longer available, or the dealer suddenly informs you that the price was misprinted.
This technique effectively lures customers with false offers, only to pivot towards higher-priced options upon their arrival at the lot. The CARS rule aims to make such behavior illegal, emphasizing that dealerships cannot falsely advertise vehicles or associated costs, thus providing a cushion of protection for buyers against misleading ads.
The Problem of Junk Fees
Another vexing issue for car buyers arises from junk fees—unexpected costs that end up inflating the total price of a vehicle. After a buyer has settled on a purchase, they may find themselves confronted with hidden fees for services or add-ons they never agreed to, such as excessive charges for things as frivolous as nitrogen-filled tires. Such expenses can accumulate quickly, costing buyers significantly more than initially anticipated.
Once the CARS rule comes into effect, dealers will be required to obtain explicit consent for any additional fees, ensuring complete buyer awareness before contract finalizations. Buyers will also have the right to decline unwanted add-ons, empowering them to make more informed decisions during the purchasing process.
Protecting Military Personnel
Members of the military frequently face unique car-buying challenges, making them prime targets for dubious dealership practices. Unscrupulous salespeople often exploit their status, misrepresenting their affiliations or providing false information about military benefits in vehicle purchases. This inconsistency can lead to stress for service members who deserve respect and fairness in their transactions.
The CARS ruling explicitly protects military personnel, prohibiting dealers from misrepresenting their connections to military affiliations. Additionally, it combats opportunistic tactics aimed at misleading active-duty personnel regarding vehicle purchases, ensuring they receive clear and honest information.
Revealing the True Cost of Purchase
A common complaint among car buyers is that the final deal never aligns with the initial quotes received. Dealers often hide fees or selectively omit essential costs, leading customers to believe they are securing a better deal than they truly are. The CARS rule directly addresses this issue by demanding that dealerships disclose the complete “offering price.” This price will include all costs aside from basic government fees like registration, thereby promoting clarity in transactions.
When a dealership advertises a vehicle with monthly payment options, they will be mandated to outline the total price associated with these payments, leaving no room for hidden surprises at the time of closing.
Anticipating Positive Change for Consumers
If successful in 2025, the CARS rule promises substantial benefits for car buyers, with the FTC projecting potential savings of over $3.4 billion for consumers annually. The shift aims to liberate buyers—from needlessly losing time to navigating confusing dealership practices to suffering financial losses due to hidden fees and misleading sales tactics. With unfair methods being curtailed, dealerships that engage in ethical practices will no longer be at a disadvantage compared to those utilizing deceitful strategies.
While some industry advocates, like the National Auto Dealers Association, argue that the regulations infringe on dealerships' operation freedoms, many consumer advocates view the CARS rule as a necessary step toward fairness and transparency in car sales.
Navigating Car Purchases in a New Era
Easy and breezy car buying might be a distant dream, but the advancements brought about by the CARS rule could lead to a significant reduction in the most devious tactics currently employed by some dealers. Emerging from a dealership feeling satisfied and treated fairly, instead of cheated or cornered, is a goal that could soon become a reality thanks to these impending regulations.
Staying informed about your rights and understanding potential dealership scams will empower you as a consumer. Arrive smart, armed with the knowledge to avoid confrontation, and take the wheel of your car-buying journey confidently in 2025.