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I Federal Trade Commission (FTC) issued warnings to 97 car companies across the country, reminding them that their advertised prices must be the total price, including all mandatory fees, that buyers will have to pay.
The FTC said its letters are encouraging car dealers to review their advertising methods and costs to ensure that the advertised prices cover all the fees that consumers must pay when purchasing a vehicle.
It said, at a minimum, it includes checking advertised prices to ensure they match the actual prices charged by consumers. The agency added that it will continue to monitor the marketplace and will take action as necessary to ensure compliance with the FTC Act and other laws.
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“The Trump-Vance FTC is committed to preventing auto dealers from misleading consumers with low advertised prices and then adding mandatory fees at the end of the purchase process,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection.
“The FTC will remain focused on monitoring auto dealerships to ensure that the market operates efficiently and that competitors compete on prices transparently.”
The FTC has sent letters to 97 auto dealerships to encourage price transparency. (Stock)
The agency said the letters to auto dealers are part of the FTC’s broader enforcement efforts transparent price across multiple markets, including rentals, tickets and hotels, grocery and delivery services and car sales and rentals.
The FTC’s efforts aim to support market accessibility by ensuring that consumers pay only the advertised price for products and services and are not subject to undisclosed fees, hidden charges or other illegal conduct.
“When consumers do not know the true price of a car – or any product – consumers and others face related consequences, including that consumers cannot compare shops and make informed decisions, sellers who try to deal with consumers honestly are put at a competitive disadvantage, and the market cannot function properly,” a sample version of the warning letter posted on the FTC website.
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The FTC has notified nearly 100 auto dealerships that it is investigating the dealers’ pricing practices. (David Paul Morris/Bloomberg via Getty Images)
Letters the FTC sent to auto dealers provide several examples illegal pricing practices in the automotive industry.
Those include to advertise the price that does not show all required payments, price advertising that shows discounts or rebates not available to all consumers and price advertising that fails to take into account the amount of additional payment required.
It also includes placing advertised price conditions on consumers using merchant financing, requiring consumers to purchase additional items not shown at the advertised price and advertising that is not available or missing cars.
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The FTC told retailers to make sure their advertised prices match the actual sales price. (David Paul Morris/Bloomberg via Getty Images)
The FTC’s template letter informs the recipient that the agency is concerned that the recipient may be engaging in one or more of those practices.
It also encourages the recipient to “review your procedures, including making sure that the prices you advertise include all necessary fees and charges other than required government fees, to ensure you are in compliance with applicable laws. This will include, at a minimum, checking your advertised prices against actual prices and making sure they match.”
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The template letter adds that the notice “is not intended to be a complete statement of concerns that may exist about your brokerage firm or group” and is also not intended to “represent any conclusions about whether your broker or broker group is involved in these practices.”
