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Beware of Advertised Car Deals Under MSRP, New FTC Rules

New cars are becoming more available, and some dealers may have new vehicles that are marked under MSRP. However, according to Jalopnik, advertised deals under MSRP may be too good to be true. In addition, there is more inventory at the end of 2022 due to new laws that make certain pricing tactics by dealerships illegal. The Federal Trade Commission (FTC) has released new rules that require dealerships to offer a good deal on a car, which may be a new law. It’s important to know how to ask for and expect a good deal.

Let’s explore the federal register and FTC policy. Jalopnik highlighted a Volkswagen sale that advertised a good price, but the fine print revealed that the discount was only available with a trade-in and dealer financing. If you didn’t have those, you would pay significantly more. Another deal had dealer-installed items that added $3-4k to the price. Even if you found out and didn’t buy, the FTC may consider the misleading price as anti-competitive behavior. They will crack down on practices that divert consumer attention from competitors, even if the business owns up to it later. This is part of a 16-page document on unfair competition adjudicated in November 2022.

The Federal Register’s Motor Vehicle Dealers trade regulation rule prohibits dealers from misrepresenting during the sale, lease, financing, or arranging of financing. It requires accurate pricing disclosures, prohibits selling add-ons that don’t benefit the consumer, and mandates record-keeping of advertising and consumer transactions. The FTC recognizes that the buying or leasing process is time-consuming and arduous, taking five hours or more at a dealership, not including time spent visiting dealerships without purchasing. Misleading advertisements can cause significant harm, diverting consumers from honest dealerships. Prohibited practices include ad-ons and deceptive pricing. Protracted paperwork can hide add-ons that weren’t agreed upon, taking advantage of the consumer’s weariness to add the additional cost. Misrepresentations affect the consumer’s choice to visit a dealership or not.

Even if a misrepresentation only makes you visit a dealership, it’s still prohibited. Misleading ads can divert business from truthful dealerships and waste customers’ time. The FTC rule prohibits misrepresentations concerning the cost of financing, purchasing, or leasing a vehicle, including the total cost, features, and other charges. Dealerships can’t advertise prices with rebates that aren’t available to all consumers. They must disclose the true offering price of a vehicle, excluding only required government charges, and cannot add additional fees later. These practices are unfair as they cause substantial injury, including wasting customers’ time pursuing unattainable offers.

To avoid inaccurate pricing, get a documented firm offering price in writing from the dealership. Ask for the best price on the vehicle and document it. Motor vehicle dealers are required to keep all advertisement sales scripts, training materials, marketing materials, financing information, and quotes to consumers for 24 months. Bad deals on cars are almost illegal now, so as a consumer, you have more rights when buying a car. Use this to your advantage, and don’t be misled by dealers. They cannot waive these rules, and if you’re misled, you can pull their records to support your case. Remember to ask for written price information and use this rule (463-4) as leverage as a buyer. Be aware of your rights and get a documented offering price from the dealership to avoid wasting time and being misled later.

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