NADA Challenges Proposed FTC Dealer Rule

Friday, July 22, 2022 9:00 AM | Anonymous member (Administrator)

[From Automotive News] The National Automobile Dealers Association criticized as shaky the foundation for the Federal Trade Commission's new proposed dealership regulations. Among its counterpoints:

  • The FTC said it received more than 100,000 auto-related complaints in 2021. NADA says there were 42 million new- and used-car sales last year.
  • The FTC said motor vehicle roundtables in 2011 revealed consumer confusion with financing and people surprised not to get the advertised price. NADA said the FTC didn't take action then.
  • The FTC said a 2017 qualitative study showed consumers felt confused about vehicle price, rushed through final documents and surprised about add-on charges. NADA said the introduction to an FTC report on that research states, "The data generated are not useful for forming quantitative or generalizable conclusions."
  • The FTC said more than 50 FTC enforcement actions and 246 actions involving other law enforcement agencies justify the rule changes. NADA said just 3 of the FTC actions involved voluntary protection products, despite them being a major focus of the agency's new proposal, and 16 weren't against dealerships. As for the actions involving other law enforcement agencies, "a whole slew" of those weren't against dealers either, NADA said.
  • The FTC said consumers will save 3 hours per transaction, which works out to a $30 billion-plus benefit to society over a decade. NADA said the FTC never explains how it came up with that 3-hour figure.

More information can be found in the July 18, 2022, Automotive News article.

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