Read The New Mandatory Car Dealership Rules That Could Save Shoppers ‘$3.4 Billion A Year’

The Federal Trade Commission has released its final rules for the Combating Auto Retail Scams (CARS) Rule and it’s a strong set of requirements that should save consumers billions of dollars by helping make them aware of unnecessary extra charges. It should also, according to the FTC, save consumers 72 million hours of wasted time each year.

Welcome to The Morning Dump, our daily roundup of the most important news in the automotive world. I’m consumer-focused today, and I’ll kick off with a discussion of the CARS Rule and how it could impact consumers.

Speaking of Ford and dealers, I’m also planning to look at a Ford dealership with a Michelin Star chef in Florida. Finally, why don’t I end the morning with a look at wholesale used car values and a change at the top at NHTSA? That seems like a great way to start a Monday.

How The Cars Act Could Save You Time And Money

I talk to people all the time who are worried about buying a new or used car because there are so many complex factors and it’s unreasonable to expect the average consumer to have enough education to cut through it all. This is one reason why direct-to-consumer has worked so well for Tesla.

In an attempt to protect consumers, the FTC has been working for more than a year to set a series of rules that it says would “add truth and transparency to the car buying and leasing process by making it clear that certain deceptive or unfair practices are illegal.”

These rules apply to dealers and will go into effect on July 31st, in order to give dealers time to adjust their paperwork and practices to meet the requirements of these rules. If you’re a dealer, or curious, you can read the full guidelines here.

This new rule is expected to save more than $3.4 billion and an estimated 72 million hours of wasted consumer time annually. If you want to see the math on it, there are 372 pages of background showing how the regulators came to those numbers and it should take about 72 million hours to read it (I skimmed).

From the FTC:

The CARS Rule prohibits dealers from using bait-and-switch claims to lure vehicle buyers to the lot, including about the cost of a car or the terms of financing, the availability of any discounts or rebates, and the actual availability of the vehicles being advertised. It also tackles hidden junk fees – charges buried in lengthy contracts that consumers never agreed to pay. In some cases, these fees are for services or products that provide no benefit to consumers.

As you can see in the graphic above, this means: No misrepresenting cost/price, no bogus add-ons like oil change contracts on electric cars, and consent for all charges.

How is the dealer industry taking this change? About as well as you might expect according to Automotive News.

“It’s just not workable,” National Automobile Dealers Association CEO Mike Stanton said Friday of the regulations. “It’s bad for consumers on a number of accounts. … We’re very disappointed and frustrated.”

Rhett Ricart, CEO of Ricart Automotive Group in Columbus, Ohio, said he is concerned the rule will lead to more customer anxiety if it results in vehicle transaction times becoming lengthier.

“We will be ready for it when it happens, but hopefully the FTC takes a harder look at this thing and understands this overreach they have is … going to be damning customers,” Ricart said. “There’s so much redundancy in it.”

Not all dealers interviewed were so negative, though, with one noting that it’ll level the playing field for dealers who do follow “good consumer practice.”

Ford Dealerships Have The Best Restaurants

Well, if you’re going to get stuck at a dealer, make sure it’s one with a great restaurant. The place where I sometimes take my Subaru to get warranty work done is nice enough, but you’re lucky enough to get a green banana.

Head on down to Sarasota Ford in Sarasota, Florida and you might find yourself a little better off at the “Le Mans Restaurant” inside the dealership. This joins the dealership’s 11-room movie theater and relaxation room.

This story came to me via Automotive News, which includes some interesting tidbits on the background of the crew here:

A Ford dealership in Florida says it’s the only place that sells both Michelin tires and food from a Michelin-starred chef.

Sarasota Ford last week opened Le Mans Kitchen, an upscale restaurant that’s open only to its customers. Matt Buchanan, president of Buchanan Automotive Group, which owns Sarasota Ford, proposed the idea to chef Jose Martinez as a way to build loyalty to the dealership, which also has an 11-seat movie theater and a relaxation room with massaging chairs.

Martinez owns Maison Blanche, a renowned restaurant on Longboat Key, and previously had an award-winning restaurant in Paris.

Dammit Nick Bunkley, that’s a good opening to a story. You get me, Nick, you get me.

Of course, our partner in The Autopian, Galpin Ford, also has a restaurant and I’d put Chef Geovanni at The Horseless Carriage up against any and all dealership-based dining establishment chefs. In particular, Jason’s a big fan of the tuna melt and I’m a sucker for a Geovanni Salad with a cup of buffalo chili on the side. Order it now, thank me later.

NHTSA Continues To Not Have A Full-Time Administrator

Here’s a weird fact: Over the last nine years there have only been two Senate-confirmed leaders (called Administrators) of the National Highway Traffic Safety Administration. In 2017, Mark Rosekind (appointed by President Obama) was replaced by President Trump-appointee Heidi King, who was nominated but never could get past the Senate.

She stepped down and James C. Owens worked as the acting administrator until President Biden appointed Steven Cliff, who was approved by the Senate, but quickly took a job heading up the California Air Resources Board. His replacement, Acting NHTSA Administrator Ann Carlson, has been in charge since then, but she’s got to leave on December 26th as she reaches the legal limit for non-appointed officials.

Why couldn’t she just be appointed? Per Reuters:

In May, President Joe Biden withdrew his nomination of Carlson to serve in the top job on a permanent basis after she faced Republican opposition, and Biden has not made a new pick. Attempts in Congress to reduce her salary to $1 over Republican ire about electric vehicles were voted down.

The Senate is hard on NHTSA Administrators and four-star generals for some reason.

Used Car Inventory Is Up, But Not Pacing Demand

The lack of used cars has been a real bummer for price-strapped consumers, but there’s some mid news from Cox Automotive. According to their analysis of vAuto Available inventory data the total inventory rose to 2.36 million units this month, up 2.4% from November.

Why doesn’t that mean we can expect prices to lower all of a sudden? First of all, the increase in inventory still means the market is below where it should be. Also, this:

Using estimates of used retail days’ supply based on vAuto data, an initial assessment indicates December began with 52 days’ supply, little changed from the revised start-of-November number of 53 days’ supply. One year ago, days’ supply was 56 days, suggesting inventory levels now are slightly tighter than they were one year ago.

Eventually, people have to come off the sidelines and buy a car and that’s starting to happen. And to the surprise of none but the consternation of many, cheaper cars are harder to come by:

As with new cars, and as has been the case for months, the lower the price segment, the tighter the inventory. Used vehicles priced under $10,000 had a days’ supply of 37, with days’ supply increasing with every higher price segment to the over $35,000 category with the highest days’ supply of 63.

Now’s the perfect time to get that used Range Rover, I guess.

What I’m Listening To While Writing This:

Wilco’s timeless and perfect “Yankee Hotel Foxtrot.”

The Big Question

What do you think of these dealership rules? Too harsh? Not enough? Just right?