Posted on 01/19/2024 5:43:19 PM PST by Responsibility2nd
Junk fees plague industries like hotels and airlines and end up costing consumers billions every year in add ons, “administrative fees” and other overpriced nonsense. The fees really come out of the woodwork at car dealerships, it seems. While it was enough of a problem for the federal government to take notice, things have changed in favor of dealers.
First spotted by Motor1, the Federal Trade Commission paused a ban on dealer junk fees that were originally set to take effect this summer. The ban comes after the National Automobile Dealers Association protested the move by filing a petition.
The ban was a long time coming. After watching and receiving complaints about dealer fees over the last decade, the FTC decided to take action. In a 126 page proposal, the agency set out to target and ban four main tactics/behaviors that dealers use to get over people. One of those were junk fees. The rule would have cracked down on things like doc fees, markups disguised as protection packages and non negotiable add ons. The official set of rules was dubbed Combating Auto Retail Scams (CARS) and was announced in December 2023.
Dealers naturally protested losing their fat slice of money cake. How are they going to continue to screw people over if the feds block these fees? So both the National Automobile Dealers Association and the Texas Automobile Dealers Association pushed back by filing a petition in the Fifth Circuit Court of Appeals. The whole point was to tie up the rule in court so it won’t be implemented come its July 30 deadline, which is exactly what happened. The court has agreed to hear the petition. The issue, as Motor1’s (and friend of Jalopnik) Victoria Scott points out, is if the FTC even has the legal authority to enact the rule.
The main issue in the legal battle is whether the law is actually within the FTC’s jurisdiction to impose. The dealership groups, in the petition to the Fifth Circuit, called it “an abuse of discretion” and seek the court to block its implementation. The FTC maintains that the rule “does not impose substantial costs, if any” on law-abiding dealerships, and instead simply guarantees a more even playing field for both dealerships and consumers by eliminating junk fees and hidden costs.
Even though the dealers are getting what they want by interrupting implementation of the rule, the order for the postponement says that it could still take effect. So while dealers may be celebrating this result, they’re likely only delaying the inevitable.
However the price did not inclue a mandatory Junk Fee of $2,499 adding a "protection package" that included a year's worth of free car washes, anti theft phantom fingerprints (whatever that is), 2 years of tire rotation and 2 year guarantee of paint and fabric protection.
I refused to pay that. They refused to back it off, so I left. I told my wife; "They'll call me back." And sure enough they did. They backed off this junk fee, so I bought the truck.
Can Trump as POTUS federalize all the local cops and make them cooperate with deportation orders? If a Sheriff or DA refuses to cooperate due to sanctuary city status could he have them fired?
Yep you just have to refuse to pay the fees.
Profits over fairness and honesty. But I suspect it will change because these fees are typically not taxed. Eventually the government will either ban them or tax them.
Exactly. And refuse to pay 10 or 20 thousand dollars over MSRP for a “must have” car.
I know the days of deep discounts and 20% off sticker are over, but to pay that kind of money is nuts.
You want 20% off MSRP? Do what I do. Buy a one year old model.
Yes a one or two year old car with low mileage is a better deal.
There are reasons why the manufactures are phasing down on dealerships. Among these are:
1. Efficiency/ cost savings
2. Customer relations (eliminate bait- and- switch, junk fees, markups, hidden charges, and bull sheit sales practices that leave customers unhappy or feeling ripped off )
3. Technological developments - the internet enables customers to order easily exactly what they want (and avoid getting coerced into paying for features they don’t want)
There is a hate/hate relationship between manufacturers and dealers. Most states even have tried to pass legislation protecting the consumer against stealerships. No deal.
The ideal solution would be to eliminate the middle man (dealer) and go direct from manufacturer to consumer.
I understand Kia and Amazon are trying to iron this out. I hope they do.
Side note on the hate/hate relationship: Buick has said dealers must spend $400,000 on retrofitting for EV’s. Dealers said no. They can’t afford that. so half the Buick dealers in the US have quit that franchise. Can you blame them?
What does Trump have to do with junk fees?
Got me pal. I was hoping you’d know. 9 responses in 2 hours.
My normal response would be Who cares?
i’ve never had any problem with avoiding “junk fees” ... i’ve always negotiated with a dealership manager or fleet salesman ... and i’ve always stated what i’m willing to pay bottom line + sales tax ... no other fees, period ... i guess they knew not to F with me, because no one ever tried to alter the agreed upon deal when the paperwork was filled out ...
It’s not the sales personnel you have to watch out for. It’s the Finance officer. Where they complete the sales paperwork and high pressure you for protection packages, extended warranties and etc.
I’m retired now, but when I worked in banking I did a fair amount of dealer finance which put me on the inside track of how finance managers screw you over. I know their tricks.
Plus the fact that I’ve bought dozens of cars over the years helps in knowing what to expect.
Buying a car is not for the novice.
We walked out of a local dealer when it attempted to extract an extra premium of ... get this ... $50,400... on a vehicle.
your “stealerships” designation is Right On!
I had a similar situation recently with the opposite result. I was at the point of buying a used car when I noticed a $350 “processing fee” on top of the usual title fees, prep fees, and etc. I refused to pay it, but the dealer insisted it was mandatory, so I walked away from a $20K purchase. They did not back down, although the dealer called two weeks later and asked if was still interested. I told them not if the processing fee is still there and that ended the conversation.
i don’t have problems with that part either as i pay cash and turn down flat all addons, extended warranties, etc. ... i do extensive research in the first place and buy only cars that have excellent top notch track records for quality and i mention that to ‘em ...
these people seem to know who they can F with and who not to F with ...
Always do your research before buying a car and before selling your old car as a trade in. Car Max will give you an offer over the internet.
Last August I traded in my Tiguan to buy a bigger one year old minivan. Car Max gave me an internet offer of $20,000 to buy the VW. Plus they had a comparable minivan for a few dollars more than the dealer I was at.
The dealer said the top dollar they would give me for my trade in was $18.5K. Despite the detailed internet offer but if I would bring back a signed written offer from Car Max, they would match it.
I said; “Do you really want to send me away to Car Max? You know I won’t be back. Buy my car for $20,000 and we got a deal.”
They bought it for $20,000.
Also. They tried to stick a $300 fee on top of things for window tinting. They said they tint all their vehicles and that can’t be undone and that fee cannnot be waived.
I said “Come with me.” I marched the sales gal out to the van - showed her the vehicle had dark factory tint windows with no aftermarket film attached. Of course they apologized and removed that junk fee.
You’re right. Dealers will eff you over all they can.
i just love how you handled all of that ... the way it SHOULD be handled!
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