Home » Read The New Mandatory Car Dealership Rules That Could Save Shoppers ‘$3.4 Billion A Year’

Read The New Mandatory Car Dealership Rules That Could Save Shoppers ‘$3.4 Billion A Year’

Tmd Reg Top
ADVERTISEMENT

The Federal Trade Commission has released its final rules for the Combating Auto Retail Scams (CARS) Rule and it’s a strong set of requirements that should save consumers billions of dollars by helping make them aware of unnecessary extra charges. It should also, according to the FTC, save consumers 72 million hours of wasted time each year.

Welcome to The Morning Dump, our daily roundup of the most important news in the automotive world. I’m consumer-focused today, and I’ll kick off with a discussion of the CARS Rule and how it could impact consumers.

Vidframe Min Top
Vidframe Min Bottom

Speaking of Ford and dealers, I’m also planning to look at a Ford dealership with a Michelin Star chef in Florida. Finally, why don’t I end the morning with a look at wholesale used car values and a change at the top at NHTSA? That seems like a great way to start a Monday.

How The Cars Act Could Save You Time And Money

Ftccarsruleinfographic Hi Res

I talk to people all the time who are worried about buying a new or used car because there are so many complex factors and it’s unreasonable to expect the average consumer to have enough education to cut through it all. This is one reason why direct-to-consumer has worked so well for Tesla.

ADVERTISEMENT

In an attempt to protect consumers, the FTC has been working for more than a year to set a series of rules that it says would “add truth and transparency to the car buying and leasing process by making it clear that certain deceptive or unfair practices are illegal.”

These rules apply to dealers and will go into effect on July 31st, in order to give dealers time to adjust their paperwork and practices to meet the requirements of these rules. If you’re a dealer, or curious, you can read the full guidelines here.

This new rule is expected to save more than $3.4 billion and an estimated 72 million hours of wasted consumer time annually. If you want to see the math on it, there are 372 pages of background showing how the regulators came to those numbers and it should take about 72 million hours to read it (I skimmed).

From the FTC:

The CARS Rule prohibits dealers from using bait-and-switch claims to lure vehicle buyers to the lot, including about the cost of a car or the terms of financing, the availability of any discounts or rebates, and the actual availability of the vehicles being advertised. It also tackles hidden junk fees – charges buried in lengthy contracts that consumers never agreed to pay. In some cases, these fees are for services or products that provide no benefit to consumers.

As you can see in the graphic above, this means: No misrepresenting cost/price, no bogus add-ons like oil change contracts on electric cars, and consent for all charges.

ADVERTISEMENT

How is the dealer industry taking this change? About as well as you might expect according to Automotive News.

“It’s just not workable,” National Automobile Dealers Association CEO Mike Stanton said Friday of the regulations. “It’s bad for consumers on a number of accounts. … We’re very disappointed and frustrated.”

Rhett Ricart, CEO of Ricart Automotive Group in Columbus, Ohio, said he is concerned the rule will lead to more customer anxiety if it results in vehicle transaction times becoming lengthier.

“We will be ready for it when it happens, but hopefully the FTC takes a harder look at this thing and understands this overreach they have is … going to be damning customers,” Ricart said. “There’s so much redundancy in it.”

Not all dealers interviewed were so negative, though, with one noting that it’ll level the playing field for dealers who do follow “good consumer practice.”

Ford Dealerships Have The Best Restaurants

Le Mans Kitchen
Image: Sarasota Ford

Well, if you’re going to get stuck at a dealer, make sure it’s one with a great restaurant. The place where I sometimes take my Subaru to get warranty work done is nice enough, but you’re lucky enough to get a green banana.

Head on down to Sarasota Ford in Sarasota, Florida and you might find yourself a little better off at the “Le Mans Restaurant” inside the dealership. This joins the dealership’s 11-room movie theater and relaxation room.

This story came to me via Automotive News, which includes some interesting tidbits on the background of the crew here:

ADVERTISEMENT

A Ford dealership in Florida says it’s the only place that sells both Michelin tires and food from a Michelin-starred chef.

Sarasota Ford last week opened Le Mans Kitchen, an upscale restaurant that’s open only to its customers. Matt Buchanan, president of Buchanan Automotive Group, which owns Sarasota Ford, proposed the idea to chef Jose Martinez as a way to build loyalty to the dealership, which also has an 11-seat movie theater and a relaxation room with massaging chairs.

Martinez owns Maison Blanche, a renowned restaurant on Longboat Key, and previously had an award-winning restaurant in Paris.

Dammit Nick Bunkley, that’s a good opening to a story. You get me, Nick, you get me.

Of course, our partner in The Autopian, Galpin Ford, also has a restaurant and I’d put Chef Geovanni at The Horseless Carriage up against any and all dealership-based dining establishment chefs. In particular, Jason’s a big fan of the tuna melt and I’m a sucker for a Geovanni Salad with a cup of buffalo chili on the side. Order it now, thank me later.

NHTSA Continues To Not Have A Full-Time Administrator

Nhtsa Annn
Image: NHTSA

Here’s a weird fact: Over the last nine years there have only been two Senate-confirmed leaders (called Administrators) of the National Highway Traffic Safety Administration. In 2017, Mark Rosekind (appointed by President Obama) was replaced by President Trump-appointee Heidi King, who was nominated but never could get past the Senate.

She stepped down and James C. Owens worked as the acting administrator until President Biden appointed Steven Cliff, who was approved by the Senate, but quickly took a job heading up the California Air Resources Board. His replacement, Acting NHTSA Administrator Ann Carlson, has been in charge since then, but she’s got to leave on December 26th as she reaches the legal limit for non-appointed officials.

Why couldn’t she just be appointed? Per Reuters:

ADVERTISEMENT

In May, President Joe Biden withdrew his nomination of Carlson to serve in the top job on a permanent basis after she faced Republican opposition, and Biden has not made a new pick. Attempts in Congress to reduce her salary to $1 over Republican ire about electric vehicles were voted down.

The Senate is hard on NHTSA Administrators and four-star generals for some reason.

Used Car Inventory Is Up, But Not Pacing Demand

Used Car Volumes

The lack of used cars has been a real bummer for price-strapped consumers, but there’s some mid news from Cox Automotive. According to their analysis of vAuto Available inventory data the total inventory rose to 2.36 million units this month, up 2.4% from November.

Why doesn’t that mean we can expect prices to lower all of a sudden? First of all, the increase in inventory still means the market is below where it should be. Also, this:

Using estimates of used retail days’ supply based on vAuto data, an initial assessment indicates December began with 52 days’ supply, little changed from the revised start-of-November number of 53 days’ supply. One year ago, days’ supply was 56 days, suggesting inventory levels now are slightly tighter than they were one year ago.

Eventually, people have to come off the sidelines and buy a car and that’s starting to happen. And to the surprise of none but the consternation of many, cheaper cars are harder to come by:

ADVERTISEMENT

As with new cars, and as has been the case for months, the lower the price segment, the tighter the inventory. Used vehicles priced under $10,000 had a days’ supply of 37, with days’ supply increasing with every higher price segment to the over $35,000 category with the highest days’ supply of 63.

Now’s the perfect time to get that used Range Rover, I guess.

What I’m Listening To While Writing This:

Wilco’s timeless and perfect “Yankee Hotel Foxtrot.”

The Big Question

What do you think of these dealership rules? Too harsh? Not enough? Just right?

Share on facebook
Facebook
Share on whatsapp
WhatsApp
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Subscribe
Notify of
129 Comments
Inline Feedbacks
View all comments
Harmanx
Harmanx
5 months ago

This is one reason why direct-to-consumer has worked so well for Tesla.

Dealerships have fought Tesla’s direct-to-consumer tooth and nail — using archaic laws (intended for other purposes) to disallow Tesla sales in their states. Some have succeeded.

JDE
JDE
5 months ago
Reply to  Harmanx

I am kind of thinking that the GM dealerships being used to warranty repair Tesla’s is pretty much the main reason many of us are on the fence about the online business model.

I know many of us loath stealerships when it comes time to look for a new vehicle. especially if it includes a trade in or need for financing or whatever, BUT, it is nice to have the warranty repair option with a loaner from a MFR based repair shop. Especially considering the many low mile issues that seem to be occurring on many vehicle marks these days.

Harmanx
Harmanx
5 months ago
Reply to  JDE

I have an older Model 3 and have had no trouble getting serviced with Tesla repair centers. They’re coupled with showrooms (as opposed to dealerships), and provide loaners (or Uber coupons for the repair duration if loaners become unavailable). If it’s a quick repair and doesn’t require a hoist or large parts, Tesla sends a service technician to the house.

GizmonicLoadingBay
GizmonicLoadingBay
5 months ago
Reply to  Harmanx

We have a 2013 S85 with a pretty low VIN. Previously our Tesla service center, in a Southeast US tech hub had all of these amenities, with loaners and Uber credits during service. Now there are neither transport options or any at all service dates are constantly pushed out, service is often done poorly, and there is no recourse except to complain into a poorly designed app. Human contact is intentionally minimized and no one answers the listed telephone numbers. The place is a distopian technocratic hell scape to the point where my wife has openly pondered blowing the car up a la those Finnish fellows: https://www.autonews.com/automakers-suppliers/finnish-tesla-owner-picks-dynamite-over-costly-repair-model-s

Harmanx
Harmanx
5 months ago

Sorry to hear that. I haven’t (yet) had anything but good experiences at locations near me.

GizmonicLoadingBay
GizmonicLoadingBay
5 months ago
Reply to  Harmanx

Long may it continue! I wish it were different, supercharging and the general driving experience has been very good and I’ll miss that once we jump ship.

Canopysaurus
Canopysaurus
5 months ago

Do you get gas with your meals at Ford dealer restaurants?

Dogisbadob
Dogisbadob
5 months ago
Reply to  Canopysaurus

I thought they focused on giving you enough pinto beans to have a fiesta

Bongo Friendee Harvey Park
Bongo Friendee Harvey Park
5 months ago
Reply to  Dogisbadob

If you slip the waiter an extra $20, he can get you an Escort.

Andy Individual
Andy Individual
5 months ago
Reply to  Canopysaurus

Much of the food is pretty greasy and rubbery, but the Blinker Cocktail is worth a try.

Mr Sarcastic
Mr Sarcastic
5 months ago

I don’t think the rules go far enough. Ever-increasing I think Trump eliminated the ability to sue for false advertising car dealers and well just about every business has decided to lie,lie,lie. In PA Dealers advertise a great price I huge font and in very small font says including $4,000 down or trade. Heck a $40,000 car is free with $40,000 down. But our governor owes big favors for donations to his electoral slush fund.

Drew
Drew
5 months ago
Reply to  Mr Sarcastic

There are always the favorites:
“rates/payments as low as [X]” (with trade-in, money down, 850 credit, and an active duty military member who is currently enrolled in a local college)
“savings up to 50%” (that 50% savings is on one accessory for a car we’ve never sold–the cars have little to no discount)
“on approved credit” (your 850 credit score should be approved, but we’re going to offer a much worse deal and hope you go for it–we might eventually get to the advertised deal if you point this out)
“included” (we moved the cost around, but you’re paying for it)

Mr Sarcastic
Mr Sarcastic
5 months ago
Reply to  Drew

Oh I know but saying this is the price but it doesn’t include $4,000 you put down doesn’t even qualify for scummy it is outright lieing.

Drew
Drew
5 months ago
Reply to  Mr Sarcastic

Sorry, I wasn’t really clear. I was just saying they could move to the scummy things if they have to stop lying. I don’t think any of these would necessarily fall afoul of the new restrictions, assuming they ensure they put the right info in the right places.

WHat you’re talking about is something I also really hate lease pricing: they’ll often say $X down, whatever payments, but then it’s $X+Y due at signing, and it’s pretty much never just the down payment and the first month. Those Honda used leases from the other day were downright deceptive, in my opinion, and that’s before the dealership plays their games.

Last edited 5 months ago by Drew
Mr Sarcastic
Mr Sarcastic
5 months ago
Reply to  Drew

No problem no foul it is clear they are delaying until they can find a new way to screw customers. But did want to clarify my point the offer did not reduce the price by $4,000 if you had a $4,000 down payment the price was still the same reduced $4,000 as a result of the $4,000. In other words the dealer wasn’t matching your down payment, that would be great, it was crediting your down to the purchase price so sale price doesn’t change. Sorry if I wasn’t clear.

Drew
Drew
5 months ago
Reply to  Mr Sarcastic

No, I understood what you meant; you were plenty clear. I’ve seen that practice a bit (usually with the small print specifying “with trade-in value of X”), and it is absolutely one of the worst. Interestingly, you see that same sort of practice with cell phones. Get the newest phone for [free or low price] (with trade-in of a top-of-the-line phone less than a year old).

Last edited 5 months ago by Drew
Mr Sarcastic
Mr Sarcastic
5 months ago
Reply to  Drew

Cool had no issues with you just wanted to ve clear. As Rodney King stated
“Can’t we all just get along?”
It’s just a lot of my posts have been taken way out of context and I want us all too get along.

Bongo Friendee Harvey Park
Bongo Friendee Harvey Park
5 months ago
Reply to  Mr Sarcastic

Is there anyone who doesn’t hate dealers?

Dogisbadob
Dogisbadob
5 months ago
Reply to  Mr Sarcastic

Stave DMV’s should suspend dealers’ licenses for doing that shit

Mr Sarcastic
Mr Sarcastic
5 months ago
Reply to  Dogisbadob

Yes but the car dealers donations put the Governor in office.

Dan1101
Dan1101
5 months ago
Reply to  Mr Sarcastic

I don’t either. All advertised and discussed prices need to be “out the door”, you should be able to find a car listed for $30,000 and buy it with no hassle and no negotiations for $30,000 plus tax/title/tags. Just the tax is enough of a sticker shock.

Mr Sarcastic
Mr Sarcastic
5 months ago
Reply to  Dan1101

100% correct maybe plus tax.

Dan1101
Dan1101
5 months ago
Reply to  Mr Sarcastic

And the dealers should be happy with even that, it used to be that most anyone could get a deal way below the advertised price, paying MSRP on a new car was for “suckers.”

Mr Sarcastic
Mr Sarcastic
5 months ago
Reply to  Dan1101

Oh yeah my current DD was $24,000 on a $34,000 MSRP.

JumboG
JumboG
5 months ago
Reply to  Dan1101

We need an across the board crack down on deceptive advertising – not just for cars.

Parsko
Parsko
5 months ago

I’d like to note that Sarasota dealership with the fancy chef. FYI to all reading, Sarasota is one of the more rich areas of this country. My wife and I stayed at the Sarasota Ritz a couple months back on our anniversary. Neither of us were prepared for the level of rich we were being presented with. It was insane.

We spoke to a local at a restaurant. He was young, in his 20’s, and basically a prisoner. He was hopeless to get ahead due to the utterly insane Cost-of-Living in the area, which he grew up in. It was a very “you’re either rich, or you are poor, and nothing in-between” place to live.

As such, it does not surprise me that an area full of old, rich, white guys wearing WHITE New Balance sneakers would want to “hang out” at a dealership and eat. Remember, ONLY customers can eat there. What is the fucking point of it? So stupid.

DadBod
DadBod
5 months ago
Reply to  Parsko

Dude it’s Sarasota, the country drains all the awful rich people into the gulf coast so they can spend their retirement consuming as much natural resources as possible, including the humans that serve them.

Parsko
Parsko
5 months ago
Reply to  DadBod

Yeah, basically this. The feelings I have are odd… I’ve never wanted to both live somewhere so bad AND not live somewhere so bad.

SNL-LOL Jr
SNL-LOL Jr
5 months ago
Reply to  Parsko

Hey isn’t this where the Moms for Threesome lady is from?

Last edited 5 months ago by SNL-LOL Jr
Parsko
Parsko
5 months ago
Reply to  SNL-LOL Jr

I am not googling that.

SNL-LOL Jr
SNL-LOL Jr
5 months ago
Reply to  Parsko

Nah it’s pretty clean. It’s one of the founders of those Moms for Liberty nutjobs. It turns out she likes to manage a three, as the French say.

Younork
Younork
5 months ago

I think the dealer’s reaction to some basic rules about not lying is telling, and if they respond this harshly, the rules were quite clearly needed.

That stat about there being double the inventory over $35,000 vs under $10,000 is disappointing, and I deeply welcome the return of the cheap car to the US market.

Mr. Fusion
Mr. Fusion
5 months ago
Reply to  Younork

Exactly — dealers should be for these requirements, because if a dealer is honest and above-board, then this will force their competition to be as well. But if they are complaining about this, then it’s just a red flag saying they are not honest and above-board, and don’t want to compete on those terms.

Ryan L
Ryan L
5 months ago

Theres a reason why the moniker “stealership” took hold.

They can do better and I’m confident they will.

Drive By Commenter
Drive By Commenter
5 months ago

So the piggies are mad their gravy trough is getting scaled back. Good.

There was a local dealer group that was excellent to deal with before the pandemic. They were a no haggle dealer that had fairly reasonable prices. Of course they mentioned some upsell stuff but made it clear that it was optional. No paperwork games, either. They were bought out a few years ago. Not sure how the sales experience is now but service and parts are still top notch. Assuming that sales is still good the next time I’m buying a new car it will be from one of their brands. Not a few others whose local dealers are typical shoe bottom goo.

Urban Runabout
Urban Runabout
5 months ago

If car dealers don’t like the new rules – I’m all for the new rules.

The only other people who won’t like this are the people in an 84 month contract for a $60,000 Truck/SUV with $1100/month payments.
Because they think just because they were screwed over, everyone else should have the “freedom” to be screwed over too.

Drew
Drew
5 months ago

Any dealer that is going to lose money following those rules deserves go out of business. Those are good practices that reputable dealers will have no problem following.

Enforcement is going to be the big issue, I think. Seems like a lot of places might fly under the radar for a long time because they specifically target underinformed consumers. If no one is likely to report it happening, they can make a lot of money before they get caught.

Last edited 5 months ago by Drew
HowDoYouCrash
HowDoYouCrash
5 months ago
Reply to  Drew

I think you’re missing the level of casual sociopathy that is normalized at even large corp owned stores. There is a very specific sales pipeline that makes no sense for anything but these car dealers. You talk to a sales guy, he offers you a price, this price comes with a ton of surprise markups over sticker or whatever number you agreed to. Then he kicks is back to his finance manger for another look, comes back with another bullshit number, and you do this for awhile to get all the extras stripped away.

It won’t take long for your average corporate Nissan dealer to mess up, and get busted by the state AG. At least here in Washington and Oregon I don’t think enforcement will be as much of an issue as somewhere where the dealer lobby has a tighter grip on state politics.

Drew
Drew
5 months ago
Reply to  HowDoYouCrash

That’s probably true, at least in states that proactively enforce. But I still think there’s going to be a significant number of dealers who get by with it for some time just because most of their buyers won’t even know they could report the practices, much less how to do so.

I also fear that there’s a lot of room for behaviors to differ based on whether they think they’re dealing with an informed customer. Bilingual lots doing worse for Spanish-speaking customers who are less likely to have read up on this, for example. Hopefully, there will be significant attempts to catch this sort of behavior.

I really can’t wait for the big chain lots to start getting caught pulling crap, though, and they certainly will. Because you are right that it’s entirely normalized and expected.

Canopysaurus
Canopysaurus
5 months ago
Reply to  Drew

If the dealers don’t like the rules then tell them fine, we’re going to eliminate the laws that prohibit direct to customer sales by car manufacturers (unless you’re Tesla). That should make everyone happy.

Mark Tucker
Mark Tucker
5 months ago
Reply to  Drew

Enforcement is easy; just require salespeole to wear a shock collar during negotiations. Customer gets control of the button. Every time they start to pull that shit, zap ’em.

Last edited 5 months ago by Mark Tucker
Balloondoggle
Balloondoggle
5 months ago
Reply to  Drew

I wonder if a “reputable dealer” could improve their reputation and sales by advertising that they comply with the new rules? I can picture a whole campaign around “we won’t screw you and here’s the proof”.

Drew
Drew
5 months ago
Reply to  Balloondoggle

I could see that working.
“Look, we already follow these rules that they have to force other dealers to follow.”

That said, the dealer that can accurately report that they do well beyond these bare minimums is the dealer I want to work with.

TheHairyNug
TheHairyNug
5 months ago

I wonder how many more traditional car enthusiast websites are going to be littered with comments along the lines of “well, if you’re dumb enough to sign on the line…” The resistance to consumer protection is really bizarre to me

Mike B
Mike B
5 months ago
Reply to  TheHairyNug

There’s such an odd trend of victim blaming when it comes to things like this. Or most things, really.

DadBod
DadBod
5 months ago
Reply to  Mike B

I would wager the people victim blaming are the same people who want to strip funding for public schools. Because everyone should be born with financial literacy!

Torque
Torque
5 months ago
Reply to  DadBod

While I think teaching financial literacy Should be a Basic Requirement to pass high school and I really do think it would have a net positive impact, I know of No public schools in Any state (in the US at least*) that even Attempts to teach personal financial literacy basics.

As.an example:
Say you want to be a writer, well while I personally love math; trig. or Calc. may not be entirely important to you…
On the other hand after HS, Everyone will need to know the basics of personal finance.

If anyone here knows of any I’d truly would love to hear about some positive examples!

*if you grew up outside of the US education system and you were taught personal finance basics while you were in school (besides college) I’d love to hear about it too!

MrLM002
MrLM002
5 months ago
Reply to  Torque

The closest thing financial literacy wise I was taught in HS was we were taught how to fill out the basic tax form during one period. My HS turned the Autoshop classroom into a Drama classroom and offered Art instead of Home Economics.

Basic personal finance literacy should be required learning in High school, especially the realities of student loans and compounding interest.

Torque
Torque
5 months ago
Reply to  MrLM002

“Home Economics” see that gives me hope that personal finance Was taught in at least some k-12 schools!

To being this back to how this relates to cars… you need a functioning society preferably with a strong middle class in order to have the right market conditions where automotive companies see an opportunity to offer reasonably priced product in large enough quantities that economy of scale can ensure a reasonable profit margin per unit.

Hollow out the middle class and you get a situation* where the only people that have disposable income are the richest w/in the society. Automakers then cater to that audience. This of course is a negative feedback loop i.e. the more companies cater to the richest in a society the less products that are designed to the less affluent in the population.

*sadly the pandemic significantly tightened supply of all products which of course Significantly drove up prices of all cars; yes prices are coming back down as supply increases but this always happens much more slowly bc the automakers and dealers only let go of the fat fat margins when absolutely forced bc enough people finally stop buying.

Our current condition is compounded by a tech. sunami shift from ice to ev. Traditional ICE makers are retreating from lower margin product (cars) to massive trucks and luxury cuv/suvs. It is incredible how closely legacy auto makers throughout the world are following the patterns of behavior written in Clayton Christensen’s innovators dilemma. The ‘big two’ in the US, especially GM, much like legacy European and Japanese auto makers I strongly suspect will only be able to make it (the ones that do) through record setting massive government rescue packages.

Mike B
Mike B
5 months ago
Reply to  Torque

It’s the same with housing. All the housing I see being built caters to wealthy customers, while the homes that 40 years ago were built as starter homes now go for 3X (adjusted for inflation) than they did new, firmly pricing out the exact kind of buyer they were originally intended for.

Mike B
Mike B
5 months ago
Reply to  Torque

100% agree financial literacy should be taught in schools. I had a whole year of geometry in tenth grade, that could have easily been swapped out for financial lit. Of course, it’s by design they do not teach that, our whole economy is based on people buying things they can’t afford. The whole system would collapse in no time if people made smart financial decisions. We also can’t have kids being informed and making smart decisions when it comes time to pay for college, I’m sure the student loan and college industries have lobbyists spending millions to keep financial literacy out of schools.

I have heard anecdotally though that some (private?) schools are teaching Dave Ramsay’s program. While I can do without all the religious nonsense, the basic financial principles are solid.

Dan1101
Dan1101
5 months ago
Reply to  Mike B

It takes two, a scummy heartless dealer to take advantage of people and a careless or ignorant buyer to agree to it. Both have some level of fault but mostly the dealer.

Mike B
Mike B
5 months ago
Reply to  Dan1101

A scummy dealer that does this a dozen+ times a day vs. the average consumer that buys a car 2 or 3 times a decade (if that) is not a fair matchup.

Jack Trade
Jack Trade
5 months ago

I like that this could provide more transparency, but a lot of the USG’s language here is pretty vague.

I’d prefer something more limited in scope but with specific items/requirements, but this is a good start at creating more of an information balance in a market that’s been resistant for awhile.

If that’s actually a picture of the restaurant, I appreciate that the decor does convey French countryside pretty well. I hope there’s a few tasteful nods to people like Henry Ford II, or things like Gurney bubbles, here and there.

Arch Duke Maxyenko
Arch Duke Maxyenko
5 months ago

The dealership rules will probably not actually go into place one the Supreme Court decides to strip the powers of the FTC because their donors don’t like it.

DadBod
DadBod
5 months ago

They aren’t donors, they are friends

Balloondoggle
Balloondoggle
5 months ago

“Add-ons that don’t provide a benefit.”

Who gets to define “benefit”? I bet the deal will try to tell me that certain things are beneficial and I will have a different opinion.

Drew
Drew
5 months ago
Reply to  Balloondoggle

Under the CARS Rule, a dealer may not charge for an add-on product or service if the consumer wouldn’t benefit from it. Examples include charges for “nitrogen-filled tires” that contain no more nitrogen that naturally exists in the air. Other examples are add-ons that don’t provide coverage for the vehicle, the consumer, or the transaction, or are duplicative of the car’s warranty coverage. It would be illegal for a dealer to charge consumers for a GAP Agreement – a term the CARS Rule defines – if the consumer’s vehicle or neighborhood is excluded from coverage or the loan-to-value ratio means the consumer won’t benefit financially from the product or service.

It sounds like they are not talking about things that might arguably have a benefit, just things that clearly have no benefit.

Kevin B
Kevin B
5 months ago

Dealerships are like a flesh-eating bacterium that morphs itself around antibiotics. They will respond with other ways to get your money.

Angrycat Meowmeow
Angrycat Meowmeow
5 months ago

The rules are too open ended, as usual. This won’t stop “sorry sir, the lojack is already installed and the kid in the back lot already spraywaxed it, so unfortunately we can’t remove those charges”. You wanna offer that garbage during the sale, go ahead, but don’t install it beforehand, advertise the car at 36k then sell it for 39k with 3k in add-ons that “can’t be removed”. I walk every time they pull that crap.

Thi
Thi
5 months ago

To be fair, that is when you tell them to take it off or you won’t be making the purchase and will find a dealer who will make the sell without add-ons.

Most likely won’t budge, but when you walk away you will get a call in a day or two wanting to talk it over.

Brooks Fancher
Brooks Fancher
5 months ago
Reply to  Thi

Did that onetime over financing. Beacon was 824, they came in with a 7.5 apr on a certified used car. Went to walk and then they miraculously found a 3.9% apr.

BOSdriver
BOSdriver
5 months ago
Reply to  Thi

Did this one a VW Atlas a few years ago. The dealer installs a different 3rd brake light that flashes (but never fully dims so still legal) so it catches the attention of the drivers behind you when you brake. I don’t think it was necessarily a bad idea but no way I was paying $350+ for it. I am guessing most of the money goes to the dealer and then the light mfg adds an insurance policy on it so if someone rear ends you, they pay out too. No thanks, I already have insurance. They were a reasonable dealership but instead of removing it, they left it in place and just didn’t activate the insurance portion.

PaysOutAllNight
PaysOutAllNight
5 months ago
Reply to  BOSdriver

That light blinker a really horrible product to be behind in busy traffic. I never cared either way for the idea of it, and thought maybe it would do some good, but I did just find out how awful they are to drive behind on a recent rainy evening.

It’s funny that new car dealers have all settled on $350 for a brake light blinker circuit that retails online for $5.99. That’s 98.29% margin!

SNL-LOL Jr
SNL-LOL Jr
5 months ago
Reply to  BOSdriver

Huh what good would the insurance do? Rear enders are almost always the fault of the driver behind. (I guess I just answered my own question.)

The auto retail industry is so so scummy it makes Tesla look sainty.

Last edited 5 months ago by SNL-LOL Jr
Rad Barchetta
Rad Barchetta
5 months ago

Recently talked with a dealer whose advertised price went up $1600 during our initial conversation. It was for some kind of “protection plan” which turned out to be a tracking device (so it was to protect them, not me). When asked if they could remove it I was told it was a $600 charge for that service. I did some research on it and it was a device that essentially just plugs into the OBDII port.
So $1600 for something that doesn’t do me any good and an additional $600 for the whopping 5 seconds it takes to unplug it. Needless to say I didn’t buy that car.

Vic Vinegar
Vic Vinegar
5 months ago

I noticed during the pandemic that Toyota started putting items that used to be “dealer installed” on the sticker as “factory”. So $400 floor mats that suck compared to Weathertech were now “from the factory” as opposed to something you’d generally tell the dealer they can keep.

And of course every car that gets delivered now seems to have at least $1k in “factory accessories” on there ranging from those floor mats, shitty door edge guards, $80 USB cables, or leather cases for the key fob (may only be Lexus for that). Who the hell wants that shit?

RidesBicyclesButLovesCars
RidesBicyclesButLovesCars
5 months ago
Reply to  Vic Vinegar

Door edge guards are totally worth the $20 it costs to do them yourself. Not the $299+ I’ve seen some dealerships charge.

David Smith
David Smith
5 months ago
Reply to  Vic Vinegar

And the “Factory Installed” floor mats were in a box in the trunk.

Dave Beth
Dave Beth
5 months ago

Is this going to do anything about these “call for price” website listings? If I have to call for price, you’ve already lost the sale.

Thi
Thi
5 months ago
Reply to  Dave Beth

Maybe? Though tbh Call for price is great. It tells me the dealer is going to be a shit show to work with before even interacting with them.

BOSdriver
BOSdriver
5 months ago
Reply to  Dave Beth

I really dislike that practice as well in any industry. Don’t make it more difficult for me to spend money, I can easily go somewhere else.

rctothefuture
rctothefuture
5 months ago

I know a few friends in the Dealership world who are upset by the new rule. I imagine it’s because they’ll lose the “4 square” method out of fear of being accused of breaking the law. Until they can figure out fancy wording with legal, this is going to make plenty of managers second guess their shitty sales technique.

Honestly all this does is remove a lot of issues that pop up in the finance office. Extended service contracts, oil change packages, “interior protection”, etc. Can’t say that’s a bad thing at all.

Thi
Thi
5 months ago
Reply to  rctothefuture

The 4 square method is so scammy, and salesmen will flip their shit if you call it out the moment they draw the diagram.

Also on a side note, my last car I bought I did buy the tire protection package of all things after getting clarification it would cover any road damage tires for the next 5 years for a total of $600. Little did they know my wife has no regards for potholes. Policy has already payed for itself in one year of ownership hahaha.

Baron Usurper
Baron Usurper
5 months ago
Reply to  Thi

Brought my own 4-square sheets, yes multiple sheets, when we bought my wife’s car last year. There was a perverse pleasure in watching his face darken when I bought them out.

“I work in sales too.”

Bongo Friendee Harvey Park
Bongo Friendee Harvey Park
5 months ago
Reply to  Baron Usurper

What are those?

Bongo Friendee Harvey Park
Bongo Friendee Harvey Park
5 months ago
Reply to  Baron Usurper

EUGH

Alexk98
Alexk98
5 months ago

Rhett Ricart, CEO of Ricart Automotive Group in Columbus, Ohio, said he is concerned the rule will lead to more customer anxiety if it results in vehicle transaction times becoming lengthier

A quick BBB search for Richart sows a LOT of complaints about extended warranties, service packages, and other high margin, low value add-ons attached to cars that they sell, so no wonder their CEO would make up some garbage excuse. The only dealers loudly and vehemently opposing the rules to THIS extent (some minor criticism is likely valid) are absolutely the ones whose business models rely on screwing over customers and shady practices. I see the new rules entirely as a boon for consumers who don’t know any better, even I have had close calls with shady dealers who have tried to pull a fast one on me, and I know better.

Rad Barchetta
Rad Barchetta
5 months ago
Reply to  Alexk98

I’ve dealt with Ricart’s business and those dudes are about as shady and slimy as they come. If you’ve seen their commercials on TV, the patriarch of that family looks like he stepped right out of a car dealer mafia backroom. And his kids in those ads forced smiles like they have a gun to their heads.

Alexk98
Alexk98
5 months ago
Reply to  Rad Barchetta

That sounds about right, only a dealer that slimy would find a way to turn “you can’t add on nonsense to squeeze money out of ignorant people” into “well now it’ll take 2x as long to sell a car because we have to convince customers that this crap is actually worthwhile” instead of doing business fairly and honestly. It feels good to watch these sleaze balls squirm in public.

Mr Sarcastic
Mr Sarcastic
5 months ago
Reply to  Alexk98

A list of complaining Dealerships would be great to have.

Carbon Fiber Sasquatch
Carbon Fiber Sasquatch
5 months ago
Reply to  Rad Barchetta

I briefly worked for them. I’ve never been in a more skeezy company. A bunch of secret deals and favors that runs around. Upper management is all friends and family, it’s so stereotypically bad

Captain Muppet
Captain Muppet
5 months ago

I struggle to respect anything at all that is tainted with a dreadful forced backronym. Some committee got paid to come up with that, and I bet they didn’t bang it out in an hour. Then those same people made up the rest of it.

They could just have easily called it the Auto Retail Scam Extirpation Scheme.

Goof
Goof
5 months ago

New rules? Good.

I’ve always avoided the nonsense of sticking firmly the my rule of, “People do business with people they like.” When it’s 100% transparent, simple and straightforward, it’s just easier for everyone. Yet I spent a long time, “shopping salespeople” and dealerships.

Most people aren’t as patient as me, so average people wasting less time and not getting duped into garbage like, “pinstripes” as easily is just better. Thankfully I’m maybe four cars left to buy in my lifetime, two of which I already know who will transact the sale.

Lokki
Lokki
5 months ago

Thank God these rules won’t prevent me from getting True Coat, or the free Spare Tire replacement package rolled into my monthly payment

Baron Usurper
Baron Usurper
5 months ago

>with one noting that it’ll level the playing field for dealers who do follow “good consumer practice.”

This needs to be the flag the FTC flies on all its zero-cost-compliance regulations. This isn’t a tax, there isn’t some kind of reporting requirement; the only people this hurts are those who are already cheating.

Nsane In The MembraNe
Nsane In The MembraNe
5 months ago

I think the new rules are a step in the right direction for sure. They address some of the grotesque practices that ran rampant over the last few years due to Covid and all the crazy market conditions that came with it. I particularly like the fact that they’re trying to combat false advertising. As I’ve mentioned a few times I went to take a look at an Elantra N that was listed at MSRP online in 2022 only to get to the dealership and fail to realize there was a markup until the salesdouche smugly pointed to what was essentially a post it note tacked next to the Monroney that said “+$3,000”.

I like the thinking behind the portion about add ons needing to have an actual benefit but I worry that the language is too vague and open to interpretation. It’s a bit subjective to me. A dealership can still say “oh we’re charging $2,000 for a clear coat” and is there really any way to prove it isn’t beneficial? The customer might not WANT it but there’s an argument to be made that it’s technically a benefit.

We’ve all seen that many times over I’m sure. “Oh don’t worry about the fact that it’s $2,000 over MSRP! That’s for (insert buzzword here) coating and lemme tell you, I wouldn’t buy a car without it personally!” Folks like us know to call that bluff…I actually sent a quote for what the coating would actually cost for the car to a salesperson once, very generously agreed to pay that exact, much lower cost if they could provide receipts proving it had happened, and didn’t get a response back.

But your average customer who needs a car ASAP won’t have the time or wherewithal to do that, and almost anything could be a “benefit” if you try hard enough. I still think the bastards will get away with a lot here, unfortunately.

Lockleaf
Lockleaf
5 months ago

While it does leave open some seriously wide doors, hopefully it will function to prevent the sales of things like a 2 year powertrain only service contract, when the vehicle is being sold with 4 years of factory warranty remaining. Since most if not all service contracts will deny if the factory warranty denied coverage, there is literally no benefit to the product. Hopefully it at least shuts that door.

Alexk98
Alexk98
5 months ago

I think on the bright side, if dealers want to tack on a ton of margin in additions, it will be abundantly clear the value proposition isn’t there, such as several thousand for a front end clear bra, instead of maybe 7-800. While yes some dealers will absolutely find ways to screw over consumers, I’m optimistic it will make shady practices more obvious and avoidable at the very least.

Mr Sarcastic
Mr Sarcastic
5 months ago

Well even if desperate don’t let the salesperson know (has anyone noticed feminists want generic terms for some words but not for the negative variation) and that way you can still threaten to walk.

JunkerDave
JunkerDave
5 months ago
Reply to  Mr Sarcastic

(I substitute “critter” for “man” in those occupational titles. That also covers the cases where the subject is too slimy to be considered human.)

Mr Sarcastic
Mr Sarcastic
5 months ago
Reply to  JunkerDave

Here’s a star

Arrest-me Red
Arrest-me Red
5 months ago

The rules. too many ways around them.

Mr Sarcastic
Mr Sarcastic
5 months ago
Reply to  Arrest-me Red

But if the NITSA announces dealership issues like food safety inspections at restaurants and grades the Dealerships instead of taking a payoff to ignore violations that would work.

Thi
Thi
5 months ago

The fact that the NADA is saying a consumer protection rule is bad for consumers tells you all you need to know about the NADA and the scum they represent.

Last edited 5 months ago by Thi
Jason Smith
Jason Smith
5 months ago
Reply to  Thi

I mean, it’s kind of right there in their name…
If you work as a dealer, I assume you’re a garbage human until proven otherwise…

Last edited 5 months ago by Jason Smith
129
0
Would love your thoughts, please comment.x
()
x