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Auto Industry · Consumer Protection · Dealer Fees · FTC Regulation
The Federal Trade Commission (FTC) issued warning letters to 97 auto dealership groups in March, clarifying that advertised vehicle prices must include all mandatory fees, aiming to prevent deceptive pricing practices for car shoppers.
This action mandates that any fees necessary for a vehicle purchase, such as "dealer prep" or "lot fees," must be part of the advertised price. Government fees like title, registration, taxes, and optional add-ons such as extended warranties are explicitly excluded from this requirement.
The FTC's regulatory push forces dealerships to disclose full mandatory costs upfront, enhancing price transparency for consumers. Car shoppers are advised to document advertised prices with screenshots, immediately ask for an "out-the-door" price, and verify if financing conditions impact a car's pricing to protect against hidden charges.
While these new rules do not eliminate high vehicle prices, they compel dealerships to be transparent about mandatory fees before a sale is finalized, making the car buying process clearer for new vehicle shoppers.
