The Federal Trade Commission (FTC) recently revealed a new rule aimed at curbing auto dealership scams. As car buyers become increasingly savvy, dealerships have had to resort to using increasingly unethical schemes to swindle them. The new rule is intended to protect car buyers from these unscrupulous practices by mandating new disclosures and setting new limits on dealer fees.
The FTC’s new rule applies to all auto dealers operating in the United States. It requires dealers to disclose all mandatory fees related to the purchase of a vehicle to the consumer upfront. This includes both official fees such as taxes, registration, and title fees as well as any additional dealer fees.
Additionally, the new rule requires dealers to limit late-term fees to justifiable costs. Late-term fees typically pertain to processing, handling, or administrative costs. The FTC’s rule limits these fees to amounts that are known in the market to be accepted and reasonable. The rule also requires dealers to document the costs of these fees and provide them to the consumer at the time of purchase.
By increasing transparency and accountability in the auto market, the FTC hopes to expand consumer protection. The new rule is intended to ensure that buyers are aware of all costs associated with buying a car, and grants them the right to question any fees that seem to be above or beyond their expectations. Furthermore, the FTC has provided resources for buyers to use in the event that they feel they’ve been taken advantage of.
The FTC has made it clear that it will be monitoring dealerships for compliance and that sanctions and penalties may be imposed for any violations. As such, any dealership that does not adhere to this rule is likely to face serious repercussions.
Ultimately, the FTC’s new rule should help protect car buyers from unscrupulous practices that have become all too commonplace within the auto dealership industry. By providing new disclosures and setting limits on fees, the FTC aims to create a fairer and more transparent auto market.
