FTC Cracks Down on Deceptive Car Dealer Pricing: Dealers Must Report Competitors or Face Stricter Rules

FTC Targets Deceptive Car Dealer Pricing with New Reporting Rules

The Federal Trade Commission (FTC) is pushing car dealers to help combat misleading vehicle pricing by reporting competitors that violate federal advertising rules. The move aims to address consumer frustration over advertised prices that balloon once buyers reach the showroom floor.

Dealers Must Report Competitors for Deceptive Practices

During an April 17 webinar with the National Automobile Dealers Association (NADA), FTC official Christopher Mufarrige urged dealers to report rival stores that break federal advertising rules. FTC Chairman Andrew Ferguson highlighted ongoing consumer frustration:

“There remains consumer frustration with prices revealed in advertisements, and then the prices actually offered on the dealer floor.”

According to Automotive News, the FTC has already sent warning letters to 97 dealer groups over potential pricing violations. The agency now seeks to enlist the broader industry in policing deceptive practices.

New FTC Rules Require All-In Pricing in Ads

The FTC now mandates that dealers advertise the true all-in price, including document fees and mandatory charges, rather than hiding them until late in the buying process. This change targets long-standing industry tactics like hidden fees, mandatory add-ons, and fine-print disclaimers.

Can Dealers Be Trusted to Police Each Other?

However, the FTC’s reliance on dealers to report competitors raises concerns. Many dealers may avoid reporting rivals to maintain an unspoken truce, keeping advertising practices that drive traffic while avoiding regulatory scrutiny. Alternatively, a dealership could report a competitor, weaken their position, and then resume the same tactics once the competition is gone.

If the FTC is serious about reform, experts suggest that relying solely on self-reporting may not be enough. Instead, the agency may need to implement aggressive enforcement, random audits, and severe penalties to deter deceptive pricing.

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