If you had a bad experience at a car dealership, there often isn’t much you can do. In some cases you can get a lawyer involved, but if you truly think a dealer isn’t operating within the confines of the law, you can report them to the Federal Trade Commission who can investigate and even fine dealers who are in violation of their regulations. Here’s how.
The FTC is, in case you don’t know, the regulatory agency designed to protect consumers from fraudulent or illegal business practices in various areas. Part of their jurisdiction even includes car sales. Because the FTC is a federal agency and not a state one, when it comes to dealerships their enforcement powers fall under intrastate commerce, meaning that because most dealers advertise their vehicles online and have the ability to sell to customers out of state their ads are subject to FTC enforcement.
Recently some friends of mine were in the market for a used minivan. They saw an ad for a Nissan Quest with an asking price of $14,995. (As the dealership isn’t under any investigation that we’re aware of, I’m not naming them here—just using them as an example.)
The visited the dealership for a test drive and sat down with the salesperson to possibly make a sale. That is when they got the following quote:
As you can see, there is a $3,000 dealer prep fee and almost $1,300 in additional dealer fees on top of the sales tax. Needless to say these people walked away from the deal.
Unfortunately, this kind of thing happens all the time. Dealers advertise an attractive price online only to hit the buyer with some insane back end fees.
But dealerships need to be careful on how they do this because they could be subject to investigation if these extras are not clearly disclosed. According to the FTC’s primer on automobile advertising:
“... the law requires that if a dealer advertises discounts, prices, or special low payments, the ads must clearly explain the important details of the offers and how a buyer may qualify for them.”
On this Nissan dealer’s website the the additional fees and charges are disclosed as part of the fine print. However, on their AutoTrader ad online, there are no such disclosures available as these details would normally be found under “Seller Comments”, which means this store could be in violation of FTC’s advertising regulations.
That’s just one example. If you bought a car or attempted to buy a car that hit you with a bunch of fees that you didn’t expect and/or a you think a dealership was not forthright with their financing disclosures, all it takes is a few clicks to file a report and initiate a possible investigation. The first step is to locate the FTC’s complaint assistant portal. Then select “Other” and go to “Automobile.”
From there you can follow the steps, submit your situation, and whatever other evidence you have. The key is to provide as many details as possible; pictures and screenshots are super helpful in having the FTC determine whether or not the dealership violated the regulations.
In some cases, the FTC has forced dealerships to settle for millions of dollars due to unfair or deceptive practices. Many times these investigations start with complaints from regular people, but most folks don’t know that there is a way to file a complaint even if they never signed a sales contract.