Under the FTC's plan, every dealership must first tell the customer the cost of buying a vehicle for cash without any physical aftermarket accessories or F&I products. The consumer must decline this offer in writing before moving to the financing or F&I product stage of the transaction.
The proposal also says that if the customer wants to arrange financing, the dealership must provide the total cost of financing the vehicle to term — again without add-ons. If the borrower wants to buy F&I products or accessories for a financed vehicle, he or she must decline that core financed-vehicle price in writing as well first.
If either the cash or financed vehicle transaction will feature add-ons, the dealership must also provide a final disclosure itemizing the vehicle and those products.
Though its language permits dealerships to discuss F&I products with a consumer without triggering the cash-price form, the agency's proposal is much stricter on that disclosure with regards to finance. The form must be produced and signed prior to "referencing any aspect of financing for a specific vehicle ... or before consummating a non-financed sale, whichever is earlier," the FTC draft regulations state.
The automakers pointed out that a mandated disclosure before "any aspect of financing" could be a hassle.
"First, what if a customer is driving a vehicle during a test drive and asks a question about financing?" Bright wrote. "Does the salesperson need to hand a written document to the customer while the customer is driving before answering the customer's question? Or must the salesperson refuse to discuss financing until the test drive is over? ...
"Second, what if a salesperson is explaining the many features in a vehicle's infotainment system to a family and one family member asks whether a feature could be included in the financing package. Must the salesperson decide between refusing to answer that question until after finishing the demonstration of the infotainment system or interrupting the discussion to provide a disclosure? Neither choice improves the shopping experience."
The FTC should reconsider its method and timing for disclosure, Bright said, calling the issue an example of how parts of the rule could be "frustrating and unbeneficial to consumers and the automotive industry."