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Car Dealers Can’t Lie Anymore – FTC Enforcement

If you’re involved in an automotive transaction, whether you’re buying or selling a car or you’re a dealership, you should be aware of the new changes to section five of the law or regulation from the FTC. These changes will drastically transform the way vehicles are sold in the future. As a car buyer, this benefits you because you no longer have to haggle over price or worry about a dealership mistreating you with their pricing strategy.

Although not all dealerships engage in unfair practices, some do, and the changes to section five will make a big difference in how they operate. Dealerships can no longer rip you off on price; if they do, you can defend yourself with severe consequences for the dealer. This is all on the federal trade commission website, which explains that the overall theme of section five is whether a dealership’s actions are an unfair method of competition.

For instance, if a dealership quotes you a price or payment for a vehicle that turns out to be different from what was promised, you have the right to leave without buying it. However, wasted time, lost opportunities, or being pressured into purchasing a vehicle are all considered violations of FTC regulations. This goes beyond fair competition, which involves evaluating a dealership based on merits, such as superior business strategies or inventory.

The rule would prohibit dealerships from making misrepresentations or engaging in deceptive practices surrounding motor vehicle transactions. This includes misrepresentations concerning the cost, terms, financing, or leasing of a vehicle, as well as deceptive practices surrounding total costs, added features, and the availability of discounts. Deceptive advertising or marketing that creates or maintains market power, even if the dealership is not selling anything, is also prohibited.

To capitalize on this rule as a car buyer, it’s important to document all activities and try to get everything in writing via email or text message. This way, you can hold the dealership accountable for any misrepresentations or deceptive practices. Remember, the conduct doesn’t have to cause actual harm but instead has a tendency to generate negative consequences, such as limiting choice, lowering quality, or impairing other market participants.

In conclusion, the new changes to section five of the law or regulation from the FTC are a big deal. They aim to promote fair competition and protect consumers from unfair practices. As a consumer, it’s essential to be aware of your rights and hold dealerships accountable for any misrepresentations or deceptive practices. And as a dealership, it’s crucial to comply with the new rules to avoid serious consequences.

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