FTC proposes rule to ban junk fees, bait-and-switch tactics plaguing car buyers (opens in new tab)

I mean Pink Himalayan Salt is funny marketing too. “Pink Pakistani Mine Salt” just doesn’t have the same ring to it.

There is a legitimate use case for dry nitrogen in tires, it just doesn't apply to the average person's situation.

When the interior of the tire can become very hot, such as due to compressive loading in heavy construction equipment, there is a risk of accelerated oxidation and weakening of the tire material. In more extreme cases, the oxygen can react with atomized tire bits inside the tire causing an explosion via the same mechanism by which a Diesel engine works. It is exceedingly unlikely that the tires on a normal road car will ever become hot enough for this to matter.

Some bottled water brand had a tagline "no other water hydrates better"

in case anyone does want to use nitrogen in their tires, I think at least US Costcos with tire centers have free self-service nitrogen inflators for members.

I once saw a big display in my local grocery for "organic salt" a few years ago. Which struck me as just fundamentally wrong. We are talking about non-organic material. Of course they meant "organic certified" which just meant they didn't includes additives. But still ... it seems so misleading.

I think the point of “nitrogen” is more that it’s dry and impurity free, vs shop air that can have a lot of moisture and other junk in it. Ever drain an air compressor tank off the water that accumulated inside? They get filthy with rusty water.

> Charging customers for nitrogen filled tires that contain no more nitrogen than air (hey 78% is a lot!)

Are dealerships claiming to use nitrogen and just pumping in regular air, or are you talking about the unnecessary upselling of it? It's common in racing to use nitrogen, but yea, totally unnecessary for a Camry or whatever. One of my cars displays a warning telling me to visit the dealer when the tire pressure is low because the manufacturer recommends using nitrogen. I laughed the first time I saw the message on my gauge cluster before I knew the reason...still a ridiculous thought going to the dealer to top off my tire pressure even for nitrogen.

We've been selling nutritional supplements online for over a decade and I remember reading once about how some dirt on food really helps the microbiome. I considered selling dirt pills for a while. I think we'd have some success.

"Nitrogen. It's what tires crave!"

Internet sales is a low-touch, low-margin business. It made sense because the internet sales manager could move higher volume and still make the dealership money. Now that supply is constrained and the dealership has people beating down the doors to buy every can they can get their hands on, they don’t have much reason to play ball. It’s a waste of inventory.

I bought a car in-person in 2020, and tried a "get a quote emailed" search earlier this year. 100% prefer the in-person experience.

Response to my online quote request came back with "we don't have any of that model/year in stock" and then thus far, 15-20 marketing follow-up emails trying to sell me other cars, following up on my experience, etc, in addition of course to the modern marketing "guilt trip" emails ("Hi chucksmash, I sent you an email the other day with a few other models you might be interested in but never heard back, hope everything is okay, please let me know" 3x times). When all I did was click an "email me a quote" button because the web page didn't show a price.

Adding insult to injury, the page for unsubscribing cannot process a "+" in an email address.

At least when I walk into a showroom I can also walk out. Giving anybody your email address in 2022 is basically subscribing to CatFacts.

I tried to do the same a year ago. None of the dealers responded with a quote. All of them required me to come in before they would even consider discussing a price.

Dealers have gotten savvy to internet pricing so there isn't as much haggling on price as there used to be. You occassionally find a good deal online only to find out it was a ruse to get you to come in.

I think it depends on the state you're in and the inventory of the car you're buying. Some states have already implemented strong consumer protections that would have encouraged this style of transaction and eliminate many of the mechanisms where it could go wrong.

Further, in the last two years there have been a strong demand and low supply for vehicles. Many dealerships were selling out of cars months before they were even delivered - meaning they're bought sight unseen. Finally they get marked-up 10% or more. So even the cheapest bid is still well over the sales price established by the manufacturer.

Source: Bought a car in 2021, did a lot of research.

Supply is low. Why would the dealer even reply to you when they sell their entire allotment instantly and for way over book?

I did this in 2017 and it worked great, but the pandemic broke this for many dealerships. With both new and used inventory being so tight they can often sell the car the day it rolls off the truck for MSRP or even more with zero effort. The US is still at least 1-2 million vehicles per year behind replacement and population growth, let alone the backlog from the past two years. The knock-on effect has also dramatically shrunk the used market which causes a feedback loop with the new car market.

Parts shortages are just now clearing up so even in a recession situation it may take a year or two to clear up the backlog and get back to stable inventory levels. As that happens dealerships will go back to being flexible and working to make their sales.

FWIW: our current vehicle is a Tesla. I put an order in on the website, got a simple quote with about 5 optional extras I could click on or not. Waited 3-4 months and the vehicle arrived as described for the quoted price. In other words a completely normal buying experience with no stress or question marks. The one time I needed service I scheduled it in the app with pictures, they quoted me, then a tech showed up and did the work at my house for the price quoted.

I will NEVER EVER go back to the dealership "experience".

I've done the same in the past certainly. With the relative paucity of new cars available on the market due to supply chain issues, getting an actual out the door quote with real numbers without being in the dealership has been a lot harder for the past year. It's easing up a little bit as demand softens and more supply becomes available.

That approach would break down now if none of the local dealers has the car you want in stock and has already pre-sold all of the inventory they ordered. It really depends on where you're located and which model you want to buy. Good luck getting something like a Bronco.

Nederlands has this rule in the law (as far as I know). You cannot sell a $50 ticket with a surprise $10 fee.

The product you sell must be fully usable at the advertised price.

Hear hear, make it include tax and tip, too.

Nathan is one step ahead of you

https://youtu.be/XbC0-tuYE2o?t=114

These are the kind of regulations that the government can introduce that actually help, not hurt markets.

When you take on a mortgage today, every mortgage has a standard coversheet that is identical between all lenders and lays out all the costs, interest rates and monthly payment in the exact same way.

That's a positive - increased transparency for consumers with minimal burden on businesses.

Australia has extremely strong consumer protections on things like this. It's really nice.

Shouldn't the same reasoning apply to search results? It should be illegal to claim "500000 results" but require additional spending of time, attention, data, and AI training work for each additional 200.

Be patient. There's about to be a glut of available vehicles [1] in the near future. The boat market is also showing the same signs.

[1] https://www.nbcnews.com/business/consumer/gen-z-millennials-...

Cast a wide net using the dealerships' Internet Sales desk ONLY and expect your search to take longer than pre-COVID times. You might be able to find the car you want at a reasonable price... a few hundred miles away. And don't be afraid to walk if the dealership tries any shenanigans when you show up. If they know you drove X hours to get there, they may try to leverage that information.

I bought a new car recently that there was very little haggle room on but at least no markup (other than the doc fee, etc.) Also took 6 weeks. But I did get a $15K trade-in on a 75K mile, 11 yo car with visible body damage. I was shocked. That must suggest something about used car prices.

Used car prices have been dropping a lot recently. Like almost 1% each week in the wholesale market over the last 6-8 weeks.

This YouTube channel discusses it: https://www.youtube.com/watch?v=vb8H8sTNiRc

Prices are still too expensive on used cars, but the prices are getting better and likely will continue.

Is there a reasonable chance that the vehicle you want will be ready by then? In your shoes I'd try to place the order. Otherwise I'd get something a few years old (2018+). In 24 months it'll be ridiculously messy anyways, and I think a 20k mile difference is negligible these days.

If you can afford to risk $250 (non-refundable order fee), then put in an order for a Model Y. At least to have the option. Then go test drive one. Don’t brush this idea off without doing an actual test drive. Not a ride. A drive. Orders put in now have delivery as soon as December.

My guess is that they don't expect you back since no one is masochist enough to buy a Land Rover twice...

Most car dealers don't care about establishing a long-term relationship so their level of "give a shit" varies dramatically with the state of the market.

I bought a new car at a low point of the 200x financial crisis in the worst month for new car sales (population adjusted) in decades. The sales manager tried the "go to another room to run numbers and come back" strategy but while he was gone the sales guy told me to stand firm and they'd meet my price. I bought a really hot vehicle for $7k off MSRP, something completely impossible 6-12 months prior to that - the best you could hope for at that time was $2k over MSRP. The discount was so good I wasn't even underwater on the loan when I drove it off the lot.

By contrast you see what dealers are doing right now with low used and new car inventory.

The best strategy is not to be in a position where you must get a vehicle. If you can afford to downsize (eg 2 -> 1) then do that while used car prices are high. If you can avoid buying a new vehicle do so. Inventory will recover and dealers will eventually get desperate to make sales again.

Similar story here attempting to buy new. I went to a Toyota dealership that had the model I wanted to buy in stock. I looked up the price online first and it all looked good.

Got in there and they tacked on a bunch of junk that wasn't listed. I asked them if they could do anything to get the price back to the online price, and they said they couldn't. They did suggest that they had a used car on the lot - which came in at the same price the new one did on the website, all told. I walked away.

Never heard back. I assume that somebody probably came in the same week and gladly opened up the wallet.

The experience in general suggested to me that I should hold onto my 15 y.o. car as long as it still rolls, rather than trying to buy a new one right now. Hopefully it outlasts this insanity.

You were interested in buying a used Land Rover, of course they’re going to try and soak you. People that are good with money generally don’t buy used Land Rovers.

How we handled this for the last couple of purchases was to ignore all that stuff--we made it clear from the start we were asking for the out-the-door price. Whatever it's labeled on the page is irrelevant, all that counts is the final number.

I'm not going to defend deceptive dealership sales practices, but as long as you have a good credit rating they often offer very good APRs. Most manufacturers have captive finance arms to juice their sales numbers and the financing terms can be better than what you would get from an independent lender. For example, Toyota is offering 2.49% on a 4-year loan which is lower than the US Treasury yield so if you do have to buy a car then you can literally make a profit by borrowing from them.

I generally hate treating anyone like a bad person but I figured out about 15 years ago that car dealers are only in it to extract as much money out of you as possible and there's no need to treat them as nice people. I've had success with my last few trucks emailing a dealer when I see the truck in stock that I want, saying "Attached please see pictures of my trade in, here's the VIN, here's the mileage. Please tell me the exact amount I will need to bring with me to your dealership in a cashier's check to get the new truck. I will only reply to one more email with a yes / no response. I will also not do any sort of credit check at your dealership so know that going in. I will walk away if your finance person claims that I have to do one."

Submitting forms to the DMV is a separate line item (Title and Registration). Doc fee is just profit in disguise.

> I live in a city that is friendly towards alternate transportation

Good for you. Most of us don't; that's why we buy cars.

I'm guessing you don't have a family? I easily went without a car when single living in SF. Now with a house and kids, two cars are used daily.

>Today, car ownership is a horrible value proposition

Owning a car was literally the only asset I had that appreciated from 2020-2022. Everything else got inflated to hell or burst in the stock crash. My new vehicle was worth more with 20k on the dash than before I drove it off the lot.

It's just like privacy and VCR rentals.

The car dealers in particular lost the "lobbying vs. public opinion" battle, but the other constituent business lobbies remain protected.

As I understand, many of these practices are generally illegal, but this is more of a targeted refinement to address a topical pain point.

What the junk fees actually are must be specifically stated. That's why it won't work for all types of products

"Some people are not doing it anymore" is a ridiculous reason to not-ban something that absolutely should be banned.

No surprise based on the bio.

https://en.wikipedia.org/wiki/Christine_S._Wilson

> "oh we just sold it"

Damn. This is exactly what happened to me when I bought my current car a few years ago. I found it used on the dealer website, it had everything I wanted and had <20k miles. I setup an appointment to see it on a friday, called thursday night just to make sure, "oh we just sold it, but we have a new one you can look at." I never even considered that they could just be lying.

Oh well, lesson learned I guess. It's paid off now, but I am looking at upgrading, and I'm gonna assume everything anyone at the dealership says is a lie until I see paperwork.

> Subaru, for example, requires dealers to sell cars at MSRP

I'm glad they do that now. I know one dealer local to me tried to pull a markup on me... 10 years ago (when it was easy to find another dealer that was able to give me invoice due to a TrueCar thing.)

I will say, one of the best things about Saturn was No-Haggle, consistent pricing. As relatively pleasant as the dealer I bought my WRX from was, it was still a pretty big 'jolt' compared to my previous experiences with Saturn.

Yes. See § 463.5(b)(3)

Rather then adding brokers, wouldn't it make more sense to just get rid of dealers and have cars sold at fixed prices?