WASHINGTON — Two groups representing auto dealers said on Friday they’d filed a legal challenge to the Federal Trade Commission’s latest sweeping consumer protection regulations finalized last month.
The FTC said the brand new rules will ban bait-and-switch promoting tactics, prohibit charging for add-on costs that don’t profit consumers and require dealers to make key disclosures to consumers, including accurate pricing disclosures in promoting and sales communications.
The principles were first proposed in 2022 and can take effect on July 30. In addition they require dealers to maintain records of certain advertisements and customer transactions.
The National Automobile Dealers Association (NADA) and Texas Automobile Dealers Association late Thursday asked the Fifth Circuit Court of Appeals to dam the brand new rules that “comprehensively regulates the promoting, sales, and financing of vehicles by auto dealers” saying they’re “arbitrary, capricious (and) an abuse of discretion.”
The FTC declined to comment.
The NADA said previously the FTC proposal would “upend the sales process for tens of thousands and thousands of consumers annually and hundreds of small businesses.”
The FTC said the brand new rules would bar junk fees like a service contract for an oil change for an electrical vehicle said it is predicted to avoid wasting consumers greater than $3.4 billion and an estimated 72 million hours annually purchasing for vehicles.
Dealers may even be required to acquire consent for any charges they add to a vehicle’s price and barred from charging for add-ons which can be useless to the customer, similar to selling nitrogen-filled tires that contain no more nitrogen than normal air.
The Alliance for Automotive Innovation, representing General Motors, Toyota Motor, Volkswagen and other major automakers, previously raised concerns concerning the FTC plan, warning of “excessive regulation and micromanagement of the sales experience.”
In November, a U.S. House committee said it was investigating the FTC’s consumer protection rules, arguing the regulation “threatens harm to consumers and small businesses by making automotive purchases harder and inhibiting innovation within the industry.”
A bunch of 17 Democratic lawmakers in June urged the FTC to “adopt strong regulatory protections for automotive buyers,” arguing that “unfair and deceptive practices involving motorcar dealers have widespread consequences.”
This Article First Appeared At www.autoblog.com
