4 Sneaky Car Dealership Scams That Will Be Illegal in 2024
Buying a car can feel like walking through a minefield of shady sales tactics. Some deceitful dealerships have long employed a bag of tricks to nickel-and-dime consumers out of their hard-earned cash. However, a new ruling by the Federal Trade Commission aims to put the brakes on these shady practices once and for all.
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The FTC’s new “Combating Auto Retail Scams” (CARS) rule, set to take effect in July 2024, cracks down on four of the most common scams that car buyers have had to navigate.
Here’s what these slimy tactics look like and how the CARS rule will protect consumers.
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The Bait-and-Switch
You see an ad for your dream car at an unbelievably low price. But when you get to the dealership, the salesperson hits you with the old “just kidding!” They might claim the advertised price was a typo or that the car is no longer available. Their real goal? Using that too-good-to-be-true offer as bait to lure you in, before switching you to a much pricier option.
Under CARS, this bait-and-switch on pricing, discounts, rebates, and inventory will be 100% illegal. Dealers can’t falsely advertise to pull one over on you.
Feeding You Junk Fees
You’ve decided on the car and price, but the paperwork is filled with random fees you never agreed to – things like $500 for “nitrogen-filled tires” or a useless warranty for services your vehicle will never need. These buried “junk fees” can blow up the total cost by thousands.
With CARS in place, dealers must get explicit consent upfront for every single charge. They can’t sneak anything in without your knowledge and approval. You’ll also have the right to refuse any add-ons you don’t want.
Targeting the Troops
Military members have been a frequent target for unscrupulous dealers. They face unique challenges like dealing with relocations and special repossession protections. Shady salespeople often lie about their military affiliation or make false claims about issues service members care about.
CARS makes it illegal for dealers to misrepresent their ties to the military or feed misinformation that could impact active duty personnel and their families.
Burying the True Costs
At the end of the deal, many shoppers realize the quoted costs and payments don’t match the final numbers. That’s because dealers often hide fees or exclude important expenses from their initial pricing.
Under CARS, dealers must disclose the full “offering price” that includes all costs except basic government fees like registration. They must also outline the total price if they’re advertising monthly payments.
The New Road Ahead
The National Auto Dealers Association is crying foul over the new rules, claiming the FTC overstepped. But most consumer advocates are cheering the long-overdue crackdown on anti-buyer behaviors that have become standard practice at too many dealerships.
Once CARS is enacted, the FTC estimates it will save car buyers over $3.4 billion and 72 million hours per year in headaches. Dealers who play fair will also benefit by no longer losing business to competitors using deception as a sales tactic.
While the new rule can’t completely remove the stress of car buying, it should eliminate some of the shadiest schemes that consumer advocates have been calling foul on for decades. Emerging from the dealership without feeling cheated? That will be a nice change of pace in 2024.
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