FTC issues warnings against deceptive price advertising

The Federal Trade Commission is cracking down on dealership advertising and pricing practices in a wave of letters to auto groups nationwide. On March 13, the FTC announced it was sending letters to 97 auto groups urging them to ensure their advertised prices include “all fees consumers will be required to pay when buying a vehicle,” according to a commission release. The letter warns the groups that they may be “advertising prices for cars that are lower than what you actually charge consumers,” calling such practices “deceptive” and harmful for consumers and for competition. The FTC did not publish which dealers will receive the letters. Pricing and dealership practices are part of the FTC’s larger focus on anything it deems deceptive for consumers, Ken Rojc , managing partner of the Auto Finance Group at law firm Nisen & Elliott , told Auto Finance News . “It underscores the fact that the FTC has been constantly monitoring those types of deceptive trade practices,” he said. While auto finance companies are not the focus of the warnings, lenders must be mindful of ways they could be on the hook if a dealer is found to be engaging in practices deemed deceptive by the FTC, Rojc said. “The finance companies are implicated to the extent those contracts are then signed by [them]." -- Ken Rojc, Nisen & Elliott “The finance companies are implicated to the extent those contracts are then signed by [them],” he said. “It could have an impact on the contracts they're taking assignment of, and they need to identify if they are doing business with any of those 97 dealers.” The FTC letter noted it is focused on “promoting price transparency” in markets such as auto sales and housing. The National Automobile Dealers Association said in a published statement it would cooperate with the agency regarding any industry violations: “While the overwhelming majority of America’s 17,000-plus 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.” What’s considered illegal? Per the FTC, pricing practices that could be considered illegal include: Not reflecting all required fees in the advertised vehicle price; Advertising rebates or discounts that aren’t available to all consumers; Advertising prices that are conditional on using captive or dealer financing; Not considering the additional down payment required in the advertised price; Requiring consumers to buy additional items that are not reflected in the advertised price; and Advertising unavailable vehicles. The letter states: “When consumers do not know the true price of a car — or any product — consumers and others suffer related consequences, including that consumers cannot comparison-shop and make informed decisions, sellers trying to deal honestly with consumers are put at a competitive disadvantage and the market cannot operate efficiently.” The warnings come after the FTC acted against several automotive companies in recent years: In February 2025, the FTC reached a record $20 million settlement with Chicago-based Leader Automotive Group and its parent company AutoCanada on allegations that the group had used bait-and-switch pricing tactics; In August 2024, the FTC filed an action against auto dealer group Asbury Automotive alleging discrimination against Black and Latino consumers and for charging for “unwanted add-ons. Asbury challenged the complaint, and the case is pending. In December 2024, the FTC alleged that Lindsay Automotive Group was “deceiving and overcharging car-buying consumers for years, costing them millions of dollars in junk fees and unwanted add-on products,” according to a release. The case is pending. Lindsay Auto has 12 dealerships across the Washington metro area. Actions against dealer groups are a sign that the FTC is “still out on the enforcement trail,” even after the FTC’s Combating Auto Retail Scams (CARS) Rule was vacated in 2025, Rojc said. “They will be protecting consumers against these types of potentially abusive practices,” he said. FTC settlements ramp up In fact, FTC enforcement activity, as measured by combined settlements, totaled $57.3 million from 2020 through 2024, according to data shared with AFN from automotive compliance software and consulting services provider KPA . KPA provides workforce, environment and health and safety compliance services for more than 15,000 dealers nationwide, Adam Crowell , chief legal and strategy officer, told AFN . FTC’s combined settlements landed at $33.6 million in 2024 compared with $1.1 million in 2023 when the FTC had announced the final version of its CARS rule, according to KPA. By comparison, settlements tallied $13.4 million in 2022 and $7.7 million in 2021. Many of the actions included an element of transparent advertising in prices, Crowell said, noting that KPA’s data tracks large-scale settlements. The FTC’s letters to dealers, he said, serve as “a warning shot to put the industry on notice about these various activities” and is a bi-partisan issue that has gained traction under Democratic and Republican administrations. Clear disclosures needed The FTC, Crowell said, is “taking the position that there needs to be total price advertising that's transparent about all fees with the exception of things like tax, title, registration.” Dealers must be clear that aftermarket products are optional, be mindful of how clear and easy it is to find disclosures related to advertised prices and ensure “at the end of the day the consumer knows what he or she is buying,” Nisen & Elliott’s Rojc said. “If there are hidden fees added after, or they didn't understand what they're buying, then that presents a problem.” Meanwhile, the warnings aren’t the only action regulators have taken in the automotive industry in the past week. The New York Attorney General and 12 other state attorneys general filed a lawsuit on March 16 against lender OneMain Financial alleging it included added insurance policies and other add-on products on consumers’ auto loans without the customers’ knowledge or misled the borrowers regarding the products’ terms and costs. Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with Auto Finance Summit East and Auto Finance Capital Summit in May. Register by March 27 for early-bird savings. To see event agendas and register, visit autofinance.live .

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FTC issues warnings against deceptive price advertising

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