The FTC Put 97 Auto Dealerships on Notice — See Whether You Might Be Owed a Refund
Buying a new car is already daunting enough, but buyers also have to beware of hidden fees that the sticker price doesn’t reflect.
In March, the Federal Trade Commission sent warning letters to 97 auto dealerships, putting the industry on notice about pricing practices that may violate federal law. The FTC’s message was clear: Dealerships must be transparent in their pricing and advertising or risk enforcement action.
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For consumers in the market for a vehicle, the crackdown highlights a common frustration: Seeing one price online but a much higher one when it's time to sign the paperwork. Here's what to know and how to determine whether you have grounds to file a complaint.
Auto Dealers Face Pressure Over Hidden Charges
Shoppers are fed up with shady dealerships and the FTC is doing something about it by stepping up enforcement against dealerships that bury fees in the fine print.
In a press release, Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said the agency is focused on ensuring consumers are not misled by low advertised prices that later increase due to mandatory fees.
He also said the FTC is working to ensure that "competitors are transparently competing on price" and that consumers are not surprised by charges added at the end of the purchase process.
The initiative to stop dealerships from engaging in inaccurate pricing is part of the FTC's broader efforts to promote transparency for short-term lodging, live event tickets, rental listings and food delivery services.
The Hidden Fees Drawing FTC Attention
The FTC's warning letters highlighted several pricing methods that can trick customers into thinking they’re paying one price and then are hit with a higher amount later in the negotiations.
Here are the six examples cited in the letters:
Advertising a price that does not reflect all required fees
Advertising a price that reflects rebates or discounts not available to all consumers
Advertising a price that fails to take into account the amount of an additional required down payment
Conditioning the advertised price on consumers using dealer financing
Requiring consumers to buy additional items not reflected in the advertised price
Advertising unavailable or non-existent vehicles
These practices can make it challenging for buyers to know the true cost until the final paperwork is drafted.
How To Know Whether You May Have a Complaint
Before paying for a car, document everything. If you see a price online, take a screenshot of it. If additional mandatory charges appear later that were not disclosed upfront, consumers may want to reconsider the deal. While dealerships can charge certain fees, they are generally expected to clearly disclose any costs in advance. If a buyer believes a vehicle was advertised at one price but sold at a higher price due to undisclosed fees, they can file a report at ReportFraud.ftc.gov.
The FTC’s warning letters do not guarantee refunds, but do assure shoppers that the agency is closely watching dealerships and their pricing tactics. Sticking to your budget, reading the contract thoroughly and paying attention to the full out-the-door price — not just the advertised sticker price — will help protect yourself from unscrupulous dealers.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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