New rule would negatively impact the used vehicle industry and its customers.  -  IMAGE: NIADA

New rule would negatively impact the used vehicle industry and its customers.


ARLINGTON, Texas – The National Independent Automobile Dealers Association strongly opposes a proposed rule recently released by the Federal Trade Commission adding additional regulations to the already heavily regulated car-buying process.

The Motor Vehicle Dealers Trade Regulation Rule, announced June 23, would place extensive restrictions on the sale, financing and leasing of motor vehicles and, more important, would harm the very customers the FTC is trying to protect.

The proposed rule aims to ban so-called “junk fees” for add-on products and F&I services that “provide no benefit to the consumer” and requires written disclosure and consent for optional coverages and products, as well as requiring dealers to provide a true “offering price” including all costs other than taxes and government fees.

It would also tighten advertising claims and misrepresentations during the sales and financing process and require dealers to maintain stringent advertising records.

In practice, however, the added regulatory burden on dealers would cost the industry at least $1.4 billion over the next 10 years, driving up prices for consumers and making the car-buying process longer and more difficult – even as surveys continually show consumers are demanding faster and simpler transactions.

In addition, many of the issues addressed in the proposed rule are already covered by regulations currently in effect.

“Independent auto dealers are small business owners, and the proposed rule from the FTC has the potential to negatively impact the ability of our members to operate their businesses,” NIADA CEO Robert Voltmann said.

“We look forward to working with the commissioners and their staff to ensure NIADA members’ voices are heard.”

The full text of the proposed rule is available at

The FTC is seeking public comments about the proposal. NIADA – the independent dealer's voice in Washington D.C. – is preparing to submit comments and encourages dealers to submit comments as well.

Comments can be filed online at once the Federal Register Notice is posted. Reference File No. P204800. Comments must be filed within 60 days of the notice being posted.

Originally posted on Auto Dealer Today

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