“The total amount that my son would finance was different on the printout paper than we had signed on the computer. It was all of a sudden almost $4,000 more,” she said.
The agency says these predatory fees and tactics cost auto consumers in the U.S. $3.4 billion per year, and they add 72 million hours to their time spent shopping for vehicles, according to NBC News. The new rule bans misrepresentations about price, cost and other important information when shopping for a car. It’ll also require dealers to provide the actual price consumers have to pay for vehicles, tell them that additional items like extended warranties aren’t mandatory and state the full monthly payments consumers will be paying upfront.
The Federal Trade Commission has announced new regulations, called the Combating Auto Retail Scams Rule, that are meant to stop car dealers from screwing customers with hidden fees and other bait-and-switch pricing tactics. Oh, happy days!
“This rule by the FTC is really going to help ensure a more fair and honest marketplace so that Americans can buy cars without worrying about getting tricked or deceived,” Kina Khan, FTC Chair, said in an interview.
Khan went on to say that every year for the last four years, the FTC has gotten over 100,000 complaints from people trying to buy cars who say they are hit with all sorts of bogus products and services that were snuck into paperwork they had to sign.
In November, we reported that Toyota’s credit division was ordered to pay $60 million by the Consumer Financial Protection Bureau because of deceptive and downright shitty behavior. It illegally prevented borrowers from canceling product bundles, which resulted in higher monthly car loan payments. $12 million of that money went to a fine, and the rest was part of a refund to customers.
It also bans add-on items that the FTC described as “providing no value to consumers” like duplicative warranties, software and auto subscriptions for vehicles that don’t have the tech, or service contracts for oil changes on EVs that don’t need motor oil. It’s really shitty stuff, NBC News reports. Another provision in the new rule will prohibit dealers from trying to trick members of the military by falsely suggesting that dealerships are affiliated with the military – something that is super shitty.
“I sold my car a while back, and I still haven’t bought a new one, because I’m scared to death to go into a dealership because of being taken advantage of. It’s a horrible feeling,” she said.
Lupo said that after numerous phone calls, she was able to cancel the extended warranty on her son’s car but that it took a lot of work. And her son is stuck with higher monthly payments over the life of the lease.
Stacy Lupo of Winter Haven, Florida, said she and her son were victimized by those kinds of sales tactics when she bought a car for him at a Toyota dealership in 2021. They were offered an extended warranty and turned it down, but Lupo was concerned about the way the financing manager behaved afterward.
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NBC News spoke with one consumer who described how she was completely boned by a Toyota dealer:
She said she later reviewed the lease paperwork and found a charge from an extended warranty company.
Lupo also confirmed that her daughter, who had bought a nearly identical car the week before and hadn’t dealt with that financing manager, was paying less than her son.