21 Jun, 2024

FTC reveals new rule targeting auto dealership scams that hurt shoppers

The Federal Trade Commission announced a new rule Tuesday intended to stop auto dealers from using hidden fees and bait-and-switch price tactics on buyers.

The agency says such fees and tactics cost people in the US $3.4 billion a year and add 72 million hours to their time spent shopping for vehicles.

The FTC calls the new regulation the Combating Auto Retail Scams Rule.

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The agency says the rule bans misrepresentations about price, cost and other key information. It also requires dealers to provide the actual price consumers have to pay for vehicles, to disclose that additional items such as extended warranties aren’t mandatory and to state the full monthly payment consumers are accepting upfront.

Stacy Lupo of Winter Haven, Florida, said she and her son were victimized by those kinds of sales tactics when she bought a car for him at a Toyota dealership in 2021. They were offered an extended warranty and turned it down, but Lupo was concerned about the way the financing manager behaved afterwards.

She said she later reviewed the lease paperwork and

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Daihatsu, Toyota’s small car subsidiary, shuts down factories due to falsified safety tests

Daihatsu, a subsidiary of Japanese car maker Toyota, has shut down production lines at all four of its factories as the Japanese government investigates reports the company faked safety test results on some car models for more than 30 years.

The shutdown came a week after the company announced it was suspending all vehicle shipments in and outside Japan after admitting to improper testing involving 64 models.

That led transport ministry officials to launch a deeper probe into problems that reportedly persisted for decades.

So far there have been no reports of accidents or deaths due to the falsified tests.

The stoppage is expected to affect thousands of auto parts makers and their employees, potentially dealing a blow to local economies across Japan.

It is just the latest number of safety or other violations revealed to have taken place to at least five of Japan’s major automakers in recent years.

The shutdown

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Ontario car dealerships are gouging customers: survey

When you buy a car, you’ll be offered warranties, rust protection and other add-ons you can usually accept or decline.

However, a new survey by Car Help Canada, a non-profit group that provides assistance to customers buying cars, finds that some car dealers are forcing customers to buy add-ons, and if they don’t, the dealer will refuse to sell them the car.

“Many dealerships are price gouging consumers charging them excessive fees and forcing them to pay for add-on products they don’t necessarily want or need,” said Shari Prymak, executive director of Car Help Canada.

The Canadian Car Buyers Survey asked 1,500 adult Canadians who purchased a car within the past two years about their car buying process.

Thirty-seven per cent of new car buyers said they were forced to pay a mark-up over the Manufactured Suggested Retail Price (MSRP) and 85 per cent of those profit mark-ups ranged from $1,000 to over $10,000.

Some of the options customers were forced to buy included extended warranties, paint protection, tinted windows, key fob insurance, rust protection, tire and rim protection and VIN etching.

According to the survey, some dealers told customers they had to pay for the add-ons or they couldn’t

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