FTC Proposal Comment Period Opens

The Federal Trade Commission published its proposed Motor Vehicle Dealers Trade rule in the Federal Register today. The move opens the comment period for 60 days, closing Sept. 12.

Interested parties can submit comments online by visting www.Regulations.Gov by searching for “Motor Vehicle Dealers Trade Regulation Rule” or RIM 3084-AB72.

Commenters interested in submitting by paper can mail comment letters to Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex C), Washington DC 20580.

The Federal Trade Commission (FTC) proposed a rule governing RV and auto dealers to ban certain add-on fees and bait-and-switch advertising tactics consumers encounter while buying a motor vehicle.

Among add-on items and financial products potentially affected by the proposed rule are:

• Extended warranties
• GAP coverage
• Nitrogen-filled tire plans

The proposal would prevent “charging for add-on products that provide no benefit to the consumer.” Dealers would be required to disclose that “the optional add-on product or service is not required and that a consumer can purchase or lease the vehicle without the add-on.”

Among products the proposed rule defines as optional add-on products or services that offer consumers no benefit are “extended warranties that merely duplicate coverage already provided on the vehicle.”

A preliminary regulatory analysis estimates the rule would create a $29 billion net economic benefit over the next 10 years.