FTC Implements New Rule to Combat Car Dealership Scams and Protect Consumers

The Federal Trade Commission has introduced new regulations, known as the Combating Auto Retail Scams Rule, to prevent car dealers from engaging in deceptive practices such as hidden fees and bait-and-switch pricing. These tactics cost US auto consumers $3.4 billion annually and add 72 million hours to their shopping time. The rule prohibits misrepresentations about price, requires dealers to disclose the actual price, and bans add-on items that provide no value to consumers. It also prevents dealers from falsely suggesting military affiliations. The FTC hopes these regulations will create a fair and honest marketplace for car buyers.