• by Tanya Gazdik , 3 hours ago

The Federal Trade Commission is putting dealership groups on notice that their advertising practices must fall in line with federal law.

“The agency announced on March 13 that it has dispatched letters to nearly 100 dealership organizations, cautioning them against what it describes as six specific ‘illegal pricing practices,’” according to GM Authority. “These include advertising a price that fails to include mandatory fees, conditioning advertised prices on dealer financing, and marketing unavailable vehicles."

The only costs dealers may omit from an advertised price, the FTC wrote, are “required government charges, like taxes.”

“The letters stress the need for truthful and transparent pricing in the automotive industry,” according to WardsAuto. “The warning letters note FTC actions are pending against three dealer groups accused of one or more of the illegal pricing practices, but otherwise do not identify specific dealer groups.”

Shopping for a car and feeling like the price magically changes at checkout is a familiar experience for some Americans.

“According to the FTC, dealerships should make sure advertised prices reflect the full cost customers must pay, aside from government charges like taxes,” according to CarScoops.  “The agency says it’s keeping an eye on the marketplace and could take enforcement action if misleading pricing practices keep popping up.”

The agency said it had not concluded that each dealer that received a warning was engaged in these practices.

“The move partly replicates an abandoned Biden-era effort to rein in ‘junk fees’ in car shopping,” according to Kelley Blue Book. “Under the prior administration, the agency wrote a proposed federal rule that would have made those same practices illegal. It failed a court challenge on technical grounds, with a judge finding that the agency had not provided the public sufficient notice of its plans.”