Auto dealers, manufacturers and lenders must ensure vehicle pricing and advertising is clear after the FTC sent warning letters to 97 auto groups related to deceptive pricing.
The FTC sent letters around March 13 urging auto groups to ensure prices include all fees that consumers pay when buying their vehicle and avoid advertising lower prices than what the customer will end up paying.
The letters serve as an “indication of what the FTC is looking at,” John Redding, senior counsel for banking and finance at law firm Husch Blackwell, told Auto Finance News.
Read more on the FTC’s letters to dealers about deceptive pricing
Warning letters indicate that the FTC “will pay closer attention, or it … may take fewer complaints for them to initiate investigation,” Redding said, adding that the volume of letters sent to auto groups is significant. “It serves as a warning to market participants, in this case dealers, that you want to make sure that you are keeping good records should the FTC come calling.”
Dealers must ensure vehicle pricing is consistent in all forms of advertising, Tom Kline, founder of consulting firm Better Vantage Point and previous owner of Virginia Beach, Va.-based RK Auto Group for 30 years, told AFN. Better Vantage provides risk and regulatory compliance services for dealers.
“There’s going to have to be consistency between the price that [dealers] email to the customer with the price that’s on the internet [and] with the price that’s on the vehicle on the lot,” he said. “From my experience, that’s not how dealers are operating at the moment. The FTC wants consistency across all media so that there are no surprises when the customer comes in.”
Dealers must demonstrate they aren’t engaging in deceptive pricing activities, while financiers need to be aware of activity at dealerships that may prompt consumer complaints, Redding said.
“These letters aren’t necessarily an indication that every one of the dealer groups that received them is somehow engaging in this conduct, but rather that the FTC has received a sufficient amount of complaints about this conduct that they want to try and prevent it,” he said. “To the extent the consumer who financed the vehicle may have a claim against the dealer, that claim can flow to the holder of the contract.”
Emphasis on transparency, complaints
Pricing transparency is a priority for the FTC across multiple industries, including entertainment tickets and goods or services where fees may be added, with auto being a large driver of consumer complaints regarding pricing, people familiar with the matter at the FTC told AFN. An FTC rule targeting unfair or deceptive fees went into effect on May 12, 2025, as part of a larger crackdown on what are viewed as junk fees.
The letters also came after the FTC’s Combating Auto Retail Scams (CARS) Rule was vacated in January 2025.
“From my experience, regulators get involved when there are consumer complaints,” Better Vantage’s Kline said, adding that consumers have shared grievances related to convenience fees and added costs across a mix of industries. “The automotive industry isn’t being singled out here, but the regulatory action indicates that it’s in the top industries that have complaints.”
In fact, during the past 12 months, consumers have filed more than 2,900 complaints related to a vehicle loan or lease, with more than 1,000 related to managing the loan or lease, including problems with fees charged or additional products purchased with the loan, according to an AFN analysis of the Consumer Financial Protection Bureau’s complaint database on March 25.
By comparison, consumers filed about 1,700 vehicle finance-related complaints with the CFPB during the corresponding period a year ago, with about 550 complaints related to managing a loan or lease.
“In order to eliminate customer complaints, the dealership is going to be in a better position if they satisfy the customers, regardless of whether [they] did or didn’t do anything wrong,” Kline said. “That doesn’t mean that they have to give the store away to every customer, but it does mean they need to satisfy every customer [and] come to some understanding.”
“The dealership is going to be in a better position if they satisfy the customers, regardless of whether [they] did or didn’t do anything wrong.” — Tom Kline, founder, Better Vantage Point
Clear and visible price disclosures are also key, Kline said.
“If you look on some dealer websites, you will see that the disclosures are not clear and conspicuous,” he said. “This is an attempt by the FTC to level the playing field and penalize the bad guys who are not doing things correctly, and they hope [to] reward the people who are trying to do it correctly.”
Previous actions in auto
In its March 13 announcement of the letters, the FTC listed its actions against Alexandria, Va.-based Lindsay Chevrolet, Chicago-based Leader Automotive Group and Duluth, Ga.-based Asbury Automotive Group as examples of ways it aims to “address deceptive pricing practices in the auto industry.”
In a statement provided to AFN on March 24, representatives of Asbury Automotive said the dealer group does not believe the letters were directed at Asbury.
“Neither Asbury nor its dealerships are aware of having received a copy of the letter from the FTC,” the statement reads. “Instead, the letter appears to be providing an update to the market concerning the FTC’s position on pricing practices.”
The FTC in August 2024 accused Asbury of discrimination against Black and Latino consumers related to the sale of aftermarket products.
“In regard to the action previously filed by the FTC against Asbury in 2024, Asbury disputes the FTC’s claims as alleged in that lawsuit,” the March 24 statement read. “Asbury notes that the FTC has already dismissed its claims of Equal Credit Opportunity violations and Asbury’s defense against the FTC’s remaining claims is ongoing. Asbury continues to operate as an industry leader in compliance.”
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