Virtue signaling at its finest.
Yeah, dealers will find new ways to make money. Plus seems nobody pointed out if this happens our discounts will get smaller and all have to pay relatively equal pricing. I mean equality is good but unlike the usual american, I have experienced that equality they offering.
Yes, i know there are money made by financing, service, etc. But just like my well meaning liberal friends were clamoring for oil price gouging action, once gov takes this away, they will go after everything else as well in dealership business. Initially it is a slow roll, till it picks up speed.
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You mean, it’ll be almost exactly like it is now?
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I work in the mortgage field, the government overreach after the 2007-2008 housing bubble was the same way. Started with borrowers saying “I don’t know what I signed, the loan officer deceived me, I didn’t know I was in a negative amortizing arm” when values went down 20%. If values continued to rise do you think the borrowers would have said anything?
Now the government has all kinds of restrictions on fair lending, making sure EVERY fee is spelled out and tolerance on what can change and by how much from the original quote. Caps on commissions to sales people, how often that can change, how they are paid etc. If enough people complain the government can and will step in to “even out the playing field” I’ve seen it done firsthand!
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It’s always someone else’s fault that they can’t read a contract or at the very least pay a lawyer to do so for them. It’s not like they’re signing away 30 years of payments and $250k+ of interest payments.
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Business as usual for us and most of the dealers I worked for in the past. Hurts more your big volume, low front end margin dealers that make all their money on the backend. Just means that discounts from those dealers will get smaller if there is less revenue from other sources (not that I condone misleading fees/BS products).
But FTC, please ban the national advertised lease offers. There isn’t a single customer, dealer, or sales person that likes those. They are the epitome of bait and switch advertising from OEMs.
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Fair point. However, this is transitory, right?
We can still get discounts on some dealers that want to build volume. You think they would offer those if they did not have other customers pay more or FTC decides what a fair price is? I am all for not scamming people and against it, but unintended consequences occur when gov intervenes. Hence college costs or 2008 crisis.
This will shut down the good-for-this-market strategy of buying F&I products to drive dealer discounts and then canceling them as soon as you’re burning gas. Boo!
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I don’t see anything that would prevent a dealership from 1. ADMs or 2. Marking up the MF/APR. Dealers can charge whatever they want they just have to be a little more upfront about it. The great majority of buyers only care about monthly payment and I don’t think this limits a dealerships ability to do a 84 month loan at 7% to make a fat profit and get that buyer to his payment target. Perhaps they have to be a little more upfront but again, most buyers don’t care, or read anything, except the monthly payment.
These regs seem pointless to me. The disclosure requirements are fine since that’s just a computer generated printout but I’d forget about the rest.
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These are people used to paying 27.99% apr. 7% is a deal!!!
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My genuine belief is that this will is the new normal… until it is not. The general public seems fine paying MSRP+ b/c, when you need a car, you need a car. And b/c many/most customers weren’t getting great deals to begin w/.
I guess I’m confused about the premise of your question. I don’t know enough about the cash flow of a specific dealership to say why they’re offering a discount to a specific customer on a particularly day. Is it b/c they want to build “volume?” Is it b/c you came in w/ a “fair” deal and you seem like you’d be quick and easy to work w/? Was the sales manager just in a randomly good mood that day?
And customers will still be paying more. They just won’t be paying more for stuff that’s billed as useful when it’s actually BS. As others have mentioned, the proposal does not affect ADMs (among other things). ::shrug::
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If dealers do not have these profit centers they will not be so inclined to offer volume pricing. Thats my point. Less profit from people buying stupid stuff less discount for the savy shoppers. If you ok with that, i reccomend you pay extra next time just like you can donate extra tax to the IRS.
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I already see how this dealer removed all the ‘Junk Fees’
OMG 1k mats…they are made of gold.
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Do the $995 “wheel locks” come with 4 additional stock rims and tires?
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And the trunk tray has a stash of meth underneath it too.
But all in scope of this ‘junk fee’ bill.
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$995 is my mental limit for “all season” mats. They lost the sale for a mere $10.
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Looks like the FTC is starting to flex their muscles, and in this case Passport blinked
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Nice, that’s definitely a bait and switch, double charging for reconditioning eh?
Federal govt gets involved, adds regulations, sues companies and somehow the end result is lower prices for consumers LOL. If you believe that, I have some awesome oceanfront condos in Nebraska for sale. Great deals, call me.
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