FTC Warns 97 Car Dealers Over Deceptive Pricing

The US Federal Trade Commission has released a list of 97 car dealers it warned about alleged “deceptive pricing” practices. The names include major automotive groups like Lithia Motors, AutoNation, and Hendrick Automotive Group. The letters, sent in March, urged dealers to review their advertising and pricing practices, emphasizing transparency in fees and advertised prices.

The FTC’s letters focus on ensuring that advertised prices reflect all costs consumers face. The agency highlighted concerns about practices such as hiding fees, requiring dealer financing for advertised deals, and promoting cars that aren’t available. However, the letters do not accuse the dealers of wrongdoing. One line states, “This letter is not intended to represent any conclusions about your dealership’s practices.”

The agency did not publicize the names of the dealers it contacted until late May. The 97 dealers now named range from large chains to smaller independent groups. The FTC’s goal is to prevent pricing tactics that obscure total costs, which it says can mislead buyers. The letters serve as a warning rather than a formal accusation.

According to the letters, dealers may be promoting prices that are lower than what consumers actually pay. The FTC says this includes conditioning deals on using dealer financing or failing to include fees like taxes or insurance in advertised prices. The agency has not yet taken legal action against any of the named dealers.

Some of the practices outlined in the letters include advertising vehicles that don’t exist or aren’t available for purchase. The FTC says such tactics can confuse buyers and erode trust. The agency emphasized that its focus is on ensuring all pricing information is accurate and complete.

The named dealers include both national chains and regional groups. Hendrick Automotive Group, for example, operates dealerships across the US. Lithia Motors is one of the largest automotive retailers in the country. The FTC’s action signals a broader effort to address transparency in car sales.

Consumer advocates have pointed to this as a step toward clearer pricing. However, some industry experts say the letters may not be enough to change long-standing practices. “Dealers have used these tactics for years,” said one analyst. “It’s unclear how much pressure this will put on them.”

The FTC’s letters do not automatically lead to enforcement. The agency may follow up with investigations if it finds evidence of illegal activity. For now, the focus is on encouraging dealers to self-correct. The letters also include examples of problematic practices to guide dealers in reviewing their own policies.

Industry observers note that this is not the first time the FTC has targeted car dealers. Similar efforts in the past focused on odometer fraud and false claims about vehicle history. This latest action, however, centers on pricing transparency, a growing concern for buyers.

Some consumers have expressed frustration with the current system. “It’s exhausting to see a price listed online, only to find out at the dealership it’s much higher,” said one buyer. The FTC’s warnings may help address this, though enforcement remains a challenge.

The letters include a list of possible violations, but they do not name specific dealers as guilty. The FTC says it is not making legal claims in the letters. Instead, the agency is encouraging dealers to examine their own practices and ensure compliance with federal rules.

car sales remain a key part of the US economy. With dealerships facing increasing scrutiny, the agency’s focus on pricing could shape how the industry operates in the coming years. The letters are a starting point, not an endpoint.

For now, the 97 dealers named in the letters must decide how to respond. The FTC has given them a chance to self-correct before taking further steps. The outcome of this effort may set a precedent for how pricing practices are handled in the future.