A new National Automobile Dealers Association video portrays the Federal Trade Commission’s proposed dealership regulations as something that would bog down physical and digital car sales.
The video, posted on NADA’s website Thursday, opposes the proposed FTC rules and urges viewers to tell the agency that the changes aren’t needed.
“New regulations would make the transaction even more complicated and confusing, if bureaucrats in Washington have their way,” the narrator states.
The video argues the proposed changes would result in three new forms being added to a transaction should a customer take out a loan and buy finance and insurance products such as extended service contracts.
The FTC also would require a new form “each time you ask about a different vehicle,” the narrator says. Any inquiry about a vehicle or its financing triggers new disclosures, and any question about monthly payments on different vehicles calls for new documents signed “over and over,” NADA argues.
The new regulations also could “thoroughly frustrate progress” in online sales, which are now enabled at 80 percent of car dealerships for new-vehicle transactions, according to NADA’s video. The FTC would add new forms and disclosures to the process, it argues.
“It’s 2022. The whole world is online, including car sales,” the narrator says. “Today’s transactions should be easier and simpler, not more complex and burdensome for consumers. Tell the FTC its new rule on vehicle sales is unnecessary.”
The proposed regulations are intended to curtail practices including bait-and-switch advertising and unwanted F&I products buried within deals.
The wording of the FTC’s proposal suggests less formality than what’s depicted by NADA regarding disclosures. And contrary to NADA’s video, inquiries around some topics such as trade-ins don’t seem to trigger a disclosure at all in certain scenarios. But once financing talk enters the picture or it’s time to close a cash deal, NADA’s interpretation fits with the FTC’s language. The agency has acknowledged its plan could mean more documentation.
“Portions of the proposed rule contemplate additional disclosures in an already lengthy, confusing and disclosure-heavy but low-comprehension transaction,” the FTC says. It asks the public, “Would any of the additional proposed disclosures do more harm than good? If so, is there another measure that should be used to address the consumer protection concerns described herein?”
Dealers and consumers can share their views on the proposed regulations through Sept. 12, the last day in the FTC’s 60-day public comment period. The FTC had received more than 3,800 comments as of Tuesday.