Cars are essential for most households in the United States, but access to a safe, affordable vehicle is increasingly limited for many consumers by sharply rising prices, burdensome accompanying debt obligations, and problematic dealer practices. The cost of a vehicle represents such a significant proportion of many American households’ total annual income that over 88% of new car purchases and 45% of used car purchases are financed.
Enforcement actions by federal and state consumer protection agencies, as well as private litigation, have highlighted auto dealer practices that exploit the inherent power imbalance in vehicle sales, effectively further driving up the cost of many vehicles. The unfair and deceptive practices focused on in these actions include:
- Misleading advertising that conceals the vehicle price and the limited applicability of offers or rebates.
- The deceptive inclusion of Add-on products or services at inflated prices, many of which have little to no benefit for consumers.
- Discrimination against people of color in the pricing of Add-ons and finance interest rates.
- Selling unsafe and damaged vehicles.
- Engaging in yo-yo sales transactions in which dealers trick consumers into financing agreements with more expensive terms than previously.
- Verbally negotiating terms of the sale in a language other than English but presenting the consumer with contracts in English that contradict the negotiated terms.
- Installing devices to abusively facilitate electronic repossessions and harass consumers.
- Using electronic signatures and electronic records to facilitate fraud.