Feds Tell 97 Car Dealerships To Knock It Off With The Hidden Fees Already

Car dealers can be nightmarish to deal with (not all of you, we love some of you), thanks to shady salespeople and infuriating hidden fees. Many dealerships tack on ridiculous, expensive nonsense to the end of your price, like advertising fees, nitrogen tire inflation, and dealer prep fees, but that could be coming to an end, as the Federal Trade Commission just told 97 dealership chains to knock it off. 

"The Trump-Vance FTC is committed to preventing auto dealers from misleading consumers with low advertised prices and then adding on mandatory fees at the end of the purchasing process," said Christopher Mufarrige, Director of the FTC's Bureau of Consumer Protection in a recent statement. "The FTC will remain focused on monitoring auto dealerships to ensure that the market functions efficiently and competitors are transparently competing on price."

In the letters to dealers, Mufarrige listed six specific no-nos that dealers have to stop doing: 

• Advertising a price that does not reflect all required fees,
• Advertising a price that reflects rebates or discounts not available to all consumers,
• Advertising a price that fails to take into account the amount of an additional required down payment,
• Conditioning the advertised price on consumers using dealer financing,
• Requiring consumers to buy additional items not reflected in the advertised price, and
• Advertising unavailable or nonexistent vehicles.

While the FTC didn't name any dealers specifically, it did release the letter template that was sent to all them, saying: "This letter is to advise you that you may be advertising prices for cars that are lower than what you actually charge consumers. Such deceptive tactics harm not only consumers, but
competition, by making it hard for law-abiding businesses to compete on an even playing field." 

It's unclear what happens to dealers if they continue to violate any of those rules, especially since the FTC limited the scope of its Rule on Unfair or Deceptive Fees. Originally, car dealers were included in the rule, which helped prevent them from slapping hidden charges on customers at the last second. But in December, 2024, that rule's effectiveness was whittled down to just covering live ticketing and short-term lodging companies. No penalties for violating the new rules were included in the most recent letter to dealers. 

In response to the FTC's letters, the National Automobile Dealers Association (NADA) issued a statement. "While the overwhelming majority of America's 17,000+ dealers service their customers in a consumer friendly and compliant manner, NADA takes any potential advertising violations in the marketplace very seriously. We will continue to work with the FTC to address areas of concern."