The FTC has proposed new rules to limit bad behavior by car dealers. Members of the public are encouraged to comment.
are consistently high on the list of things consumers complain about to the FTC, otherwise known as Federal Trade Commission, which has logged more than 100,000 complaints over the past 3 years. If you think that number is low, consider that only a small fraction of people bother to file official complaints. The actual number of instances in which consumers are taken advantage is probably closer to 1 million over the last three years rather than 100,000.
Sharp-eyed readers will note the proposed rules do not address dealers which mark up vehicles that are in short supply or which require customers to pay additional fees to preserve their place on a reservation list — two of the common practices that annoy customers the most. The manufacturers often try to address those issues directly with dealers, but because franchise dealer laws are so strong in many states, there is often little automakers can do to rein in even the most rapacious dealers.
“Attempts to narrowly tailor rules are frequently unsuccessful. Technologies and markets evolve in ways regulators are unable to predict, leading either to mission creep — the expansion of regulatory regimes to address these unforeseen developments — or to ossification, given the opportunity cost of frequent updates to reflect emerging market realities.
“Notably, the motor vehicle industry has benefited from innovation in all areas — safety, performance, options, and sales. For example, in the 1980s, GM created the Saturn project, introducing a then-revolutionary way to manufacture, market, and sell cars. More recently, consumer car shopping has moved online with services that assist consumers in price negotiation and location of desired vehicles.
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