The FTC has sent letters to 97 auto groups, warning them that they must advertise the total price of vehicles that consumers will be required to pay; that figure must include all mandatory fees.

“When consumers do not know the true price of a car—or any product—consumers and others suffer related consequences, including that consumers cannot comparison-shop and make informed decisions, sellers trying to deal honestly with consumers are put at a competitive disadvantage, and the market cannot operate efficiently,” Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, wrote, in a template of the letter being sent to the auto groups.

The letters encourage auto dealers to review their advertising and pricing practices, including making certain that advertised prices match actual prices that consumers will be charged. FTC officials said they will continue to monitor the marketplace and will take other action to ensure that dealers are in compliance with the FTC Act and other rules.

“The Trump-Vance FTC is committed to preventing auto dealers from misleading consumers with low advertised prices and then adding on mandatory fees at the end of the purchasing process,” said Mufarrige said, in a statement.“The FTC will remain focused on monitoring auto dealerships to ensure that the market functions efficiently and competitors are transparently competing on price.”

The letters cite several examples of illegal pricing practices in the auto industry, including:

  • “Advertising a price that reflects rebates or discounts not available to all consumers.
  • Advertising a price that fails to take into account the amount of an additional required down-payment.
  • Conditioning the advertised price on consumers using dealer financing.
  • Requiring consumers to buy additional items not reflected in the advertised price, and
  • Advertising unavailable or non-existent vehicles.”

Many of these practices would have been prohibited under the FTC’s CARS Rule.  However, the Fifth Circuit overturned the Rule on procedural grounds over a year ago.  Instead of reissuing the Rule, it appears that the FTC will now follow its more traditional path of issuing warning letters to industry members.  While warning letters are not formal enforcement actions, recipients are typically directed to correct any problems and to confirm to the FTC that they have done so, although that apparently was not the case with the auto dealer letters.  

Importantly, warning letters are not the same as penalty offense notices, which list conduct that the FTC has specifically determined to be unfair or deceptive in one or more administrative orders (other than consent orders).  Companies that receive penalty offense notices from the FTC, and that continue to engage in the same conduct, can be subject to civil penalties that, as of January 17, 2025, were up to $53,088 per violation, under Section 5(m)(1)(B) of the FTC Act and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.  (The FTC has yet to announce any inflation adjustments for 2026.)