Most of the practices addressed already are illegal under state or federal laws, the FTC said in a 16-page filing in the Federal Register.
The FTC, which was given expanded rule-writing authority over dealers last year, said it would try to determine "what consumer-protection issues, if any, exist that could be addressed through a possible rule-making or other initiatives."
Five representatives from the National Automobile Dealers Association participated.
"Dealers have millions of dollars invested in their community. Our continued success to stay in business is our reputation," said David Westcott, president of Westcott Buick-GMC-Suzuki in Burlington, N.C., and chairman of NADA's Dealership Operations Committee. "It behooves us as dealers to try to please you as a consumer as much as we can."
Westcott said that there is no advantage to misleading customers or trying to get them a loan they will be unable to pay. Subprime loans should still be an option for customers who are deemed less creditworthy, he said.
John Van Alst, an attorney with the National Consumer Law Center said some auto dealers are still abusing consumers through higher risk lending.
"A lot of people who don't know their credit score end up at a buy-here, pay-here dealer and don't think they have a choice," he said. "We have a really inefficient market here that lacks clarity."
Chris Kukla, senior counsel for the Government Affairs Center for Responsible Lending, said dealers have an undue amount of discretion in which type of loan they offer the customer, and this is where abuse could occur.
"The dealer can present a loan option even though there may be a loan that the customer would have preferred," Kukla said. "The customer is not going to know what that offer is. They are going to see the offer the dealer presents to them."
Most panelists agreed, however, that the consumer is generally more educated in dealer finance and insurance because of information and shopping tools available on the Internet.
The FTC will hold up to four more roundtable discussions around the country.