Is It Really the End of Sleazy Behavior by Car Dealerships?

If the Federal Trade Commission (FTC) has its way, then car dealerships will have to be honest with consumers and charge them a fair price for a car.  In the summer of 2022, the FTC proposed a set of new regulations regarding advertising practices in the automotive industry and useless additional fees attached to consumers’ auto loans.  It is just part of the FTC’s fight against junk fees that businesses in a variety of industries add to consumers’ service contracts and loans.  If everything goes according to plan, then consumers who buy cars in the summer of 2024 will not encounter any surprises regarding the price of the car, and they will not have to pay any junk fees, which will make the car buying process simpler and monthly car loan payments more affordable.  As you could probably guess, car dealers’ groups have opposed the new rules and filed several legal challenges to them.  A Plantation debt lawyer can help you if you are struggling to keep up with payments on an unaffordable car loan burdened by junk fees.

What’s All That Junk Stuck on Your Car Loan?

Junk fees, defined as additional charges on a service contract or loan agreement that do not provide any additional value for the consumer, are a widespread problem in many industries, but consumers feel their effects most strongly when it comes to car loans.  The average monthly payment on auto loans is much higher than it was several years ago, even though the repayment terms have also gotten longer; a car loan with a repayment term of more than five years was unheard of a decade ago.  Automobile shortages in 2021 drove up car prices, which is part of the reason for the astronomical car payments you see today, but junk fees are also a big part of the problem.

These are some of the ways in which the FTC wants car dealerships to clean up their act:

• Advertisements for cars must include accurate disclosures about the prices of cars. Prices quoted in direct communications between dealers and customers must also be accurate.  The new rules ban bait and switch advertising tactics, where dealers advertise cars at lower prices than are actually available.
• Car dealerships must keep accurate records of transactions and communications with customers.
• Car dealerships may not charge additional fees for extras that do not benefit the buyer. Some of the most egregious junk fees that the FTC cited include oil change service contracts for electric vehicles and additional fees for nitrogen-filled tires when these tires do not contain more nitrogen than less expensive tires.

Unless the legal challenges delay them, the new rules will go into effect in July 2024.

Work With a Debt Lawyer About Coping With an Unmanageable Car Loan

A South Florida debt lawyer can help you if your car loan is unaffordable; you may be able to renegotiate the repayment term or waive some of the fees.  Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.

Source:

reuters.com/legal/auto-dealers-challenge-new-us-ftc-car-buyer-consumer-protection-rules-2024-01-05/