On March 13, the Federal Trade Commission (FTC) announced that it is sending warning letters to 97 auto dealership groups across the country, signaling a renewed focus on deceptive pricing practices in the retail auto sector. The letters stress that advertised prices must reflect the total price consumers will be required to pay, including all mandatory, dealer-imposed fees other than government charges like taxes. The agency frames this effort as part of a broader initiative to promote price transparency across sectors such as rental housing, ticketing and hotels, grocery delivery, and now auto sales and leasing.
Key points
The warning letters make clear that the FTC views “total price” advertising as a core consumer protection priority and expects dealers to ensure that advertised prices match the actual prices charged at the dealership. The agency identifies specific practices it considers deceptive, including advertising a price that omits required dealer fees; advertising prices that incorporate rebates or discounts not generally available to all consumers; advertising prices that do not clearly account for required down payments; conditioning advertised prices on the use of dealer financing; requiring consumers to purchase additional products or services that are not included in the advertised price; and advertising vehicles that are unavailable or nonexistent.
The letters emphasize that these practices can violate § 5 of the FTC Act, which prohibits unfair or deceptive acts or practices, and they expressly note current cases against multiple auto groups involving alleged misrepresentations about price, availability, and add-on products. At the same time, the template letter is careful to state that it is not a comprehensive statement of concerns and does not constitute a determination that the recipient has violated the law. Instead, the FTC is using the letters as both a warning and a compliance nudge, coupled with an explicit statement that it will continue to monitor the marketplace and “take additional action as warranted.”
Next steps
For auto dealers and groups, these letters are an invitation to take a hard look at pricing and advertising practices before the FTC takes the next step. Dealers should promptly review their advertising across all channels, including websites, third-party listing platforms, social media, and traditional media, to confirm that the advertised price is the actual price consumers will be charged, excluding only required government charges such as taxes and title fees. This includes assessing whether any advertised prices implicitly rely on conditional rebates, special discounts, required dealer financing, or mandatory add-ons that are not clearly disclosed and included in the headline price.