With COVID-19 spurring a wider adoption of digital retailing tools by dealers, there has been "a lot of misunderstanding or misinformation" about when the cooling-off period applies, said Shannon Robertson, executive director of the Association of Finance & Insurance Professionals.
"We saw a lot of dealers move to an online strategy ... during the pandemic and were forced to find alternative or different ways to be able to sell vehicles and products and move to a full online or over-the-phone transaction style," he said.
While dealers can primarily rely on an exception that says the FTC's rule does not apply if a sale is the result of prior negotiations — including those done online or by phone — careful consideration should be taken upon delivery of the vehicle.
"If I'm delivering the vehicle to the customer at their house and I'm presenting those contracts, and I negotiate aftermarket products at that time, then the cooling-off period would apply," Robertson said.
To prevent triggering the rule, dealers should make sure the transaction is completed in full before vehicle delivery and avoid sending salespeople to the customer's home, several compliance experts said.
For employees assigned to delivering vehicles, Robertson said, it should be stated in their job description that they're not allowed to negotiate or have any kind of pricing conversation with customers.