National Auto Dealers Association CEO Mike Stanton on Thursday blasted a series of proposed Federal Trade Commission regulations on retailer advertising and F&I as "completely unwarranted, redundant and ineffectual requirements."
He said it would raise prices and yield "inefficiency and complexity ... at a time when the entire auto industry is united behind an effort to simplify and streamline vehicle sales and pricing policies, shorten transaction times and improve the customer experience."
NADA spokesman Jared Allen said Thursday the group also would seek an extension on the upcoming 60-day window for public comment on the proposal, No. P204800. The 14 pages of new regulatory language (and another 113 pages of associated discussion) were posted June 27 after a 4-1 vote by commissioners.
The Federal Trade Commission proposes banning finance and insurance coverage and physical vehicle add-ons "that provide no benefit" and requiring expanded disclosure and consent on such optional products — including a list of prices online.
It also is considering requiring dealerships to produce a true "Offering Price" for any specific vehicle they promote. It's effectively the "out-the-door" price the dealership would charge to purchase the vehicle, not counting any government taxes and fees.
Dealerships also are prohibited from misleading customers on whether the terms they advertise online are for a lease, include rebates not available to all or involve a vehicle that isn't available.
"As auto prices surge, the commission is taking comprehensive action to prohibit junk fees, bait-and-switch advertising and other practices that hit consumers' pocketbooks," FTC Bureau of Consumer Protection Director Samuel Levine said in a statement June 27. "Our proposed rule would save consumers time and money and help ensure a level playing field for honest dealers."
But Stanton challenged the rule with the following statement Thursday:
"The FTC's proposed rule would impose a vast array of new, completely unwarranted, redundant and ineffectual requirements that will cause great harm to consumers by increasing prices, extending transaction times, and making the customer experience much more complex and inefficient," Stanton said.
"Unfair and deceptive acts or practices in any part of the vehicle advertising, sales or financing process are reprehensible and should continue to be policed by federal regulators, including the FTC. But the Commission has failed to support or justify that this proposed rule is warranted in the market.
"It is imperative that regulators conduct proper, thorough and evidence-based analyses before proposing rules that would have such drastic ramifications on consumers and market participants, especially small businesses.
"Instead, what the FTC is proposing here would inject massive amounts of inefficiency and complexity into the vehicle sales process at a time when the entire auto industry is united behind an effort to simplify and streamline vehicle sales and pricing policies, shorten transaction times and improve the customer experience."