Last week, the Federal Trade Commission (FTC) announced it is sending warning letters to 97 auto dealership groups nationwide, reminding them that the price they advertise to consumers must reflect the total price consumers will be required to pay for the vehicle—including all mandatory fees but excluding taxes.
According to the FTC, advertising a price that does not include all required fees or other mandatory costs may constitute a deceptive practice under Section 5 of the FTC Act. The agency stated that transparent pricing is a current enforcement priority to ensure that the marketplace “functions efficiently and competitors are transparently competing on price.”
The letters encourage dealerships to review their advertising and pricing practices to ensure that advertised prices match the actual prices charged to consumers. The FTC also stated that it will continue monitoring the marketplace and may take additional enforcement action where appropriate.
Link to FTC Targets Deceptive Auto Dealer Pricing FTC Targets Deceptive Auto Dealer Pricing
In its letters, the FTC identified several pricing practices that may be unlawful, including:
- Advertising a price that does not reflect all required fees
- Advertising a price that reflects rebates or discounts not available to all consumers
- Advertising a price that fails to take into account the amount of an additional required down payment
- Conditioning the advertised price on consumers using dealer financing
- Requiring consumers to buy additional items not reflected in the advertised price
- Advertising unavailable or non-existent vehicles
The warning letters also reference several pending FTC enforcement actions involving alleged deceptive pricing practices in the auto industry, including cases against Lindsay Chevrolet, Leader Automotive Group, and Asbury Automotive Group.
The FTC noted that the warning letters are part of its broader effort to promote price transparency across multiple industries, including rental housing, ticketing, hotels, grocery delivery services, and auto sales and leasing, with a focus on preventing undisclosed fees and other misleading pricing practices.
Link to Auto Dealers Must Ensure Total Price Transparency Auto Dealers Must Ensure Total Price Transparency
Given the FTC’s attention to this area, as well as similar efforts by state AGs and private plaintiffs, businesses should review their pricing to ensure that advertised prices reflect the total amount consumers are required to pay.
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