17 U.S. lawmakers are urging the Federal Trade Commission (FTC) to finalize new consumer protections for car buyers. This comes as automobile dealerships argue that the proposed regulations would actually raise the cost of the car buying process.
According to a report from Reuters, the group of Democratic lawmakers is urging the FTC to require dealers to provide a legally enforceable offering price that includes all add-on products, and finalize new regulations to prohibit misrepresentations.
The lawmakers argue that “unfair and deceptive practices involving motor vehicle dealers have widespread consequences.”
In response, the National Automobile Dealers Association is claiming that the proposal will “upend the sales process for tens of millions of consumers annually and thousands of small businesses.” Furthermore, the association stated that this proposal is “premature, legally deficient, factually inaccurate, and exceedingly confusing for consumers and dealers.”
For context, the FTC proposed banning fees and bait-and-switch advertising tactics back in June 2022, along with requiring dealers to make key disclosures to consumers to accurately represent the true asking price of a vehicle. The FTC argued that these new regulations “would save consumers time and money and help ensure a level playing field for honest dealers.”
In fact, the FTC calculated that the proposed rule change would generate $29.7 billion in net consumer benefits over a 10-year period. Meanwhile, other analysts found that it would actually cost consumers $38.1 billion over the same time period, and would lead to lengthier sales transactions.
It’s worth noting that the National Automobile Dealers Association funded a study that found that compliance costs with this proposal would be significant. In addition, six Republican senators claimed that the regulations “would confuse customers, lengthen the transaction time to purchase a vehicle, limit consumer choice, increase paperwork, and mandate burdensome new record-keeping requirements.”