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Consumer Reports: FTC proposal would target shady car dealer tactics

Posted at 7:07 AM, Sep 06, 2022
and last updated 2022-09-06 08:07:29-04

NASHVILLE, Tenn. (WTVF/CONSUMER REPORTS) — Have you ever left a car dealership with the promise of a great deal only to realize that smooth-talking car salesman took you for a ride?

Those days could be coming to an end thanks to new guidelines being proposed by the Federal Trade Commission.

"The FTC received more than 100,000 complaints each year over the last three years about shady dealership practices and now they’re trying to put into place some protections to keep them from happening to consumers," said Keith Barry, Consumer Reports auto expert.

Some of the practices the FTC would ban? Not disclosing the full price of a car to any consumer who asks.

"Until then you’re going to want to get as much information in writing from the dealer as possible. Ask for an itemized, out-the-door price," Barry said.

Including add-ons that have already been installed on that car that is apparently the last one in stock. Sound familiar?

"Under those new rules, you wouldn’t have to pay for those extras but in the meantime, you’re going to want to negotiate to get them taken off," Barry said.

Did you know that half a dealer’s profit — about $1,200 for new cars, and about a third of the profits or $900 for used — comes from extra financing, leasing, and services fees?

"At the end of the whole process check the paperwork, check the math. If there is an extra that you want to buy, negotiate the price on that and don’t fall for unnecessary extras," Barry said.

Like those nitrogen-filled tires. Consumer Reports has seen charges as high as $495, even though one company says dealers should charge only $8 to $12 for a fill.

Consumer Reports recommends skipping nitrogen altogether, no matter the price.

And how about when you go pick up the car only to be told there was a mistake, the car just got sold and the only one left is more expensive.

"It’s the classic bait and switch. In some states it’s illegal, and it’s at the very least an unfair trade practice so this is your sign it is time to walk away," Barry said.

Not surprisingly, car dealers and their trade groups aren’t too happy about the proposed rules, saying they’re complicated, and could negatively affect business. But if you feel you’ve been wronged by a dealership, Consumer Reports says complain, complain, complain to the Federal Trade Commission, which already has the power to go after businesses for deceptive practices.

Lastly, if you're buying a used car, do not take the dealer or whoever is selling the car's word that it's fine and in great shape. Before you hand over any of your hard-earned money, take that car to your own trusted mechanic and have them check it out. It'll probably cost you $75 or $100 — but that will be money well spent.