FTC Law for Used Cars Buyers

There is a common law doctrine that places the burden on buyers to reasonably examine the property before making a purchase also known as “caveat emptor” (from Latin: “let the buyer beware”). This simply indicates that it is the buyer’s responsibility to do their study before making a purchase and that it is their own fault if they make a poor choice. As for the car market, due to the fact that sellers are more knowledgeable about vehicles than consumers, they, in this paradigm, set the rules for the market. Unfortunately, it is a common practice for dishonest car brokers to entice customers with car pricing on used cars that are below market rates and then they upsell add-ons (warranties, insurances, tires, keys, etc.) when a buyer expresses interest in a vehicle, which, in the end, significantly raises the price that was initially stated.

The good news is that the used-car market will become a buyers’-oriented-market as a result of the new Federal Trade Commission (FTC) regulations. In other words, buyers won’t be tricked into paying more than they should, and car dealers are going to be entitled to be completely honest with their customers.

To know more about the new FTC regulations, watch an exclusive interview with Grand Prix Motors CEO Lenny Komsky to find out how customers and respectable car brokers will benefit from it.

The FTC regulations

FTC is aware of the tricks and traps that make it difficult for customers to compare car prices or force them to pay thousands of dollars in unnecessary fees. The discussion has been going on for several years now. But since the used car market is so in-demand lately, it is time to establish a system of rules that would give customers essential remedies against merchants who wrongfully impose unnecessary fees or use deceptive advertising. According to the FTC’s announcement, the measures might include:

• prohibit dealers from using a variety of false promotional promises to entice potential car customers;
• prohibit brokers from billing customers for unauthorized add-on services and items that don’t benefit them;
• dealers would be required to disclose the price of the automobile without any optional add-ons and would be prohibited from charging customers for an add-on without their explicit, written approval;
• oblige dealers to provide important information to customers, such as a genuine offering price for a vehicle that represents the whole cost a customer would pay, excluding only taxes and government levies.

As a result, the next time you receive the vehicle’s price, it will include all you must pay, and you won’t be duped any longer.

The Advantages of the New FTC Regulations for Customers

When you buy something, you want to get a full picture. The benefits of the mentioned FTC regulations for customers are not hard to name:

• Significant consumer protection.
• The used-car-buying process is going to become more transparent.
• The customers are going to be equipped with substantially more information about the prices actually available for vehicles and add-ons before they invest time in going to a dealership.
• Additionally, it would provide the Commission the ability to get money back from customers who have been duped or charged without permission.

The Advantages of the New FTC Regulations for Honest Dealers

The regulations are going to “level the playfield”. While the dishonest vehicle brokers defrauded customers and lured them in with absurdly low pricing, the respectable dealers that played by the rules incurred significant losses. But those days are coming to an end. The two main benefits of the new FTC regulations for honest dealers include:

• Negative reputation of dishonest traders selling used vehicles won’t affect other dealers anymore.
• The car-selling business will become competitive and free of any cheats and tricks.

When Grand Prix Motors sell used cars, we make sure to fully explain what the customer will receive and not put any pressure on them if they decide not to purchase the vehicle. We don’t try to deceive people because our offers are always at the market price. 

Given the opportunity to select and lease your ideal vehicle on fair terms & conditions, you wouldn’t want to miss it! You may contact us, and request a custom quote and our lease expert will give you a more detailed consultation!