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The
FTC said the new rules will ban bait-and-switch advertising
tactics, prohibit charging for add-on costs that do not benefit
consumers and require dealers to make key disclosures to
consumers, including accurate pricing disclosures in advertising
and sales communications.
The rules were first proposed in 2022 and will take effect on
July 30. They also require dealers to keep records of certain
advertisements and customer transactions.
The National Automobile Dealers Association (NADA) and Texas
Automobile Dealers Association late Thursday asked the Fifth
Circuit Court of Appeals to block the new rules that
"comprehensively regulates the advertising, sales, and financing
of vehicles by auto dealers" saying they are "arbitrary,
capricious (and) an abuse of discretion."
The FTC declined to comment.
The NADA said previously the FTC proposal would "upend the sales
process for tens of millions of consumers annually and thousands
of small businesses."
The FTC said the new rules would bar junk fees like a service
contract for an oil change for an electric vehicle said it is
expected to save consumers more than $3.4 billion and an
estimated 72 million hours annually shopping for vehicles.
Dealers will also be required to obtain consent for any charges
they add to a vehicle's price and barred from charging for
add-ons that are useless to the buyer, such as selling
nitrogen-filled tires that contain no more nitrogen than normal
air.
The Alliance for Automotive Innovation, representing General
Motors, Toyota Motor, Volkswagen and other major automakers,
previously raised concerns about the FTC plan, warning of
"excessive regulation and micromanagement of the sales
experience."
In November, a U.S. House committee said it was investigating
the FTC's consumer protection rules, arguing the regulation
"threatens harm to consumers and small businesses by making car
purchases more difficult and inhibiting innovation in the
industry."
A group of 17 Democratic lawmakers in June urged the FTC to
"adopt strong regulatory protections for car buyers," arguing
that "unfair and deceptive practices involving motor vehicle
dealers have widespread consequences."
(Reporting by David Shepardson in WashingtonEditing by Matthew
Lewis)
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