FTC Warns 97 Auto Dealership Groups About Deceptive Pricing

The Federal Trade Commission is sending letters to 97 auto groups nationwide, warning them that the prices they advertise must be the total price—including all mandatory fees—that consumers will be required to pay.

The letters encourage dealers to review their advertising and pricing practices, including ensuring advertised prices include all fees consumers will be required to pay when buying a vehicle. At a minimum, this includes evaluating advertised prices to ensure they match actual prices charged to consumers. The FTC will continue to monitor the marketplace, the letters state, and will take additional action as warranted to ensure compliance with the FTC Act and other rules the Commission enforces.

“The Trump-Vance FTC is committed to preventing auto dealers from misleading consumers with low advertised prices and then adding on mandatory fees at the end of the purchasing process,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “The FTC will remain focused on monitoring auto dealerships to ensure that the market functions efficiently and competitors are transparently competing on price.”

The letters are part of the FTC’s ongoing work to ensure price transparency across multiple markets, including rental housing, ticketing and hotels, grocery and delivery services, and auto sales and leasing. To help support affordability in the marketplace, the agency is dedicated to ensuring that consumers only pay the advertised price for products and services, and are not subject to undisclosed fees, hidden charges or other illegal conduct.

The letters the FTC sent to the auto dealers cite several examples of illegal pricing practices in the auto industry including:

• 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, and
• advertising unavailable or non-existent vehicles.

The letters also note several pending actions the FTC has brought to address deceptive pricing practices in the auto industry including cases against Lindsay Chevrolet, Leader Automotive Group and Asbury Automotive Group.