FTC warns auto dealers about deceptive pricing

March 25, 2026 6:25 pm
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The FTC has sent warning letters to 97 auto dealership groups nationwide, telling them that many common advertising and pricing practices may be deceptive and must stop if they violate the FTC Act.

What the FTC just did

  • On March 13, 2026, the FTC announced it is sending warning letters to 97 auto dealer groups across the U.S. about potentially deceptive pricing and advertising.

  • The letters do not publicly name the specific dealers, but they include a sample letter and are clearly meant as an industry‑wide shot across the bow.

Key practices the FTC flagged

In the letters, the FTC lists examples of “illegal pricing practices,” including:

  • Advertising a price that does not include all required dealer‑imposed fees (only taxes and similar government charges may be excluded from the headline price).

  • Basing the advertised price on rebates or discounts that are not available to all consumers (for example, requiring military, recent college grad, or loyalty status without clear disclosure and inclusion in the headline price).

  • Failing to reflect a required down payment in the advertised price or payment amount.

  • Conditioning the advertised price on using dealer‑arranged financing.

  • Requiring consumers to buy add‑ons (service contracts, protection packages, accessories) that are not included in the advertised price.

  • Advertising vehicles that are unavailable or nonexistent (bait‑and‑switch inventory).

What “total price” means

  • The FTC is emphasizing that the advertised vehicle price must reflect the total price the consumer is required to pay to get the car from the dealer, excluding only government‑imposed charges like taxes and title/registration fees.

  • The initiative aligns with the FTC’s broader “junk fees” and price‑transparency push in other sectors such as housing, ticketing, hotels, and grocery delivery.

Example table: pricing practices

Practice FTC’s view
Online price omits mandatory doc/dealer fees Likely deceptive; must be baked into advertised price.
Price only if buyer uses dealer financing Likely deceptive; finance condition must not control headline price.
Price includes conditional rebates for few buyers Likely deceptive if presented as general price.
Mandatory add‑on not in advertised price Likely deceptive; must be included in the advertised total.
Listing cars already sold Likely deceptive bait‑and‑switch.

Enforcement posture and next steps

  • These are warning letters, not lawsuits, but the FTC explicitly reminds dealers that violations of the FTC Act can lead to law enforcement actions, injunctions, orders, and monetary relief.

  • The letters come as the FTC already has pending cases against several dealer groups for similar practices, underscoring that this is an active enforcement area, not a hypothetical threat.

  • The Commission urges dealers to review advertising on their own sites, third‑party listing platforms, and social media to ensure that the price consumers see is the price they actually pay at the store, apart from government charges.

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