Yahoo Finance 4 Sneaky Car Dealership Scams That Might Be Illegal Soon
Buying a car can feel like walking through a minefield of shady sales tactics. Some deceitful dealerships have long employed a bag of tricks to nickel-and-dime consumers out of their hard-earned cash. However, a new ruling by the Federal Trade Commission aims to put the brakes on these shady practices once and for all.
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The FTC’s new “Combating Auto Retail Scams” (CARS) rule may take effect later this year. It would crack down on four of the most common scams that car buyers have had to navigate.
Here’s what these slimy tactics look like and how the CARS rule would protect consumers.
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The Bait and Switch
You see an ad for your dream car at an unbelievably low price. But when you get to the dealership, the salesperson hits you with the old “just kidding!” They might claim the advertised price was a typo or that the car is no longer available. Their real goal? Using that too-good-to-be-true offer as bait to lure you in, before switching you to a much pricier option.
Under CARS, this bait and switch on pricing, discounts, rebates and inventory would be 100% illegal. Dealers could not falsely advertise to pull one over on you.
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Feeding You Junk Fees
You’ve decided on the car and price, but the paperwork is filled with random fees you never agreed to — things like $500 for “nitrogen-filled tires” or a useless warranty for services your vehicle will never need. These buried “junk fees” can blow up the total cost by thousands.
With CARS in place, dealers would have to get explicit consent for every single charge. They could not sneak anything in without your knowledge and approval. You also would have the right to refuse any add-ons you did not want.
Targeting the Troops
Military members have been frequent targets for unscrupulous dealers. They face unique challenges, such as dealing with relocations and special repossession protections. Shady salespeople often lie about their military affiliations or make false claims about issues service members care about.
CARS would make it illegal for dealers to misrepresent their ties to the military or feed misinformation that could impact active duty personnel and their families.
Burying the True Costs
At the end of the deal, many shoppers realize the quoted costs and payments don’t match the final numbers. That’s because dealers often hide fees or exclude important expenses from their initial pricing.
Under CARS, dealers would have to disclose the full “offering price” that includes all costs except basic government fees like registration. They also would have to outline the total price if they’re advertising monthly payments.
The New Road Ahead
The National Auto Dealers Association is crying foul over the new rules, claiming the FTC overstepped. But most consumer advocates are cheering the long overdue crackdown on anti-buyer behaviors that have become standard practice at too many dealerships.
If CARS is enacted, the FTC estimates it would save car buyers over $3.4 billion and 72 million hours per year in headaches. Dealers who play fair also would benefit by no longer losing business to competitors using deception as a sales tactic.
While the new rule can’t completely remove the stress of car buying, it should eliminate some of the shadiest schemes that consumer advocates have been calling foul on for decades. Emerging from the dealership without feeling cheated? That would be a nice change of pace.
Brooke Barley contributed to the reporting for this article.
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