Car-buying transparency is crucial to customers—and the FTC

Transparency gives buyers a better auto retail experience

In June 2022, The Federal Trade Commission in June 2022 proposed rules to bring more transparency to the car-buying process. With its latest regulations, the FTC has stated these rules will protect consumers by increasing pricing transparency and “making the car buying process more clear and competitive.”

While 77% of car dealers think the process is transparent, only 26% of car buyers agree. So some dealers will see this as business as usual while others might need some help in leveling up their transparency to customers. After all, enacting transparency measures as a GM or GSM is one thing—enforcing them on the floor is another matter. 

But in the general push for car dealer transparency, adopting technology like a digital retail tool can help bring clarity, detail, and consistency to customers and sales teams. It can also unify what “transparency” means to either side of the desk, so both customer and dealer have optimal visibility. 

What are the FTC’s proposed new car dealer rules?

In its own words, the new FTC auto dealer rules “ban junk fees and bait-and-switch advertising tactics that can plague consumers throughout the car-buying experience.” With car prices soaring—due to the inventory shortage and other forces—the FTC hopes to reduce costs incurred by consumers, especially those they don’t understand or don’t even know about. 

The agency’s goal? To make “the car-buying process more clear and competitive,” it says. It believes the rules will not only save car buyers time and money, but level the playing field of dealer competition.

The proposed rules include: 

  • A ban on bait-and-switch claims that use “deceptive advertising claims to lure in prospective car buyers”
  • A ban on fraudulent junk fees, such as the FTC’s example of ”’nitrogen filled’ tires that contain no more nitrogen than normal air” 
  • A ban on surprise junk fees, or charges made “without their clear, written consent”—this also requires clarity around “the price of the car without any of optional add-ons”
  • Disclosing costs and conditions upfront, giving the consumer the “‘offering price’ for a vehicle that would be full price a consumer would pay, excluding only taxes and government fees” and also disclosing any nonessential “add-on fees, including their price and the fact that they are not required as a condition of purchasing or leasing the vehicle, along with disclosures to consumers with key information about financing terms”
  • Maintaining records for at least two years, which as proposed would include marketing materials, consumer transaction documents, and other records to show compliance with rule requirements.
    (Read the proposal in full at

While the rules are not final and are open for public comments (from July 13-September 12), the FTC claims there  would be over $29 billion dollars in net economic benefit over the next ten years. They also believe it would trim three hours off the consumer’s time spent researching online, talking with and visiting dealers, and negotiating their deal. 

To most dealers, the practices outlined in the FTC’s rules are likely a no-brainer. They want to gain their clients’ trust and business with open, honest car deals. The FTC’s desire to save time rings true on both sides, too. While 90% of consumers think the dealer transaction process is inefficient, 80% of dealers are right there with them. 

So if the FTC wants transparency, and customers want transparency, and dealers recognize the value of transparency—for speed, satisfaction, efficiency, and more—shouldn’t transparency be core to the dealer’s business strategy?

Transparency as part of a dealer business strategy

It’s hard to argue the benefits of transparency in car buying. Car buyers—and dealers—will rejoice if they do in fact save time and create happier customers. In fact, many dealers using digital retail already report not only higher profits, but increased client satisfaction and faster deals. 

Those are among the biggest reasons to embrace transparency in a dealer’s business strategy: it can help improve customer experience, sell cars faster, and make sales team’s jobs easier. 

Even without considering the FTC’s proposed rules, it’s interesting to explore the benefits of transparency. 

  • How would a dealer benefit if they had a technology-driven experience that drove transparency at every stage of the deal? 
  • What if they could implement a tool that doesn’t disrupt their business, yet helps them be more transparent? 
  • How would embracing a leading-edge approach to transparency in car sales benefit the dealer’s reputation and business?
  • What if the dealer became known as a sales operation without surprises? 
  • Beyond the business value, how would sales teams react if they could simultaneously provide a more transparent experience, while closing their deals faster?

Getting or staying ahead of the game when it comes to transparency can give car buyers what they want and make dealers stand out against the competition. Yet making sure that transparency rings true for every salesperson and every deal can seem impossible to manage. Many features within a digital retail tool can help. 

Ingraining transparency with digital retail

Transparency and simplicity in auto retaill with customizable payments

Online retail is arguably the most critical component, since buyers spend so much of their time researching online. But what’s just as crucial is a seamless and accurate handoff between online and in-store. That’s when in-store digital retail needs to be able to pick up exactly where the shopper left off online—and preserve all of the information they provided and were shown, such as pricing and personal details. 

When the online and in-store retail experiences align perfectly, clients experience consistency and transparency. That continues through the credit application process, when the digital retail tool captures their information and, if approved, presents real-time approvals with terms and fees all laid out clearly. 

When a digital retail tool includes additional tools for managers, sales consultants have a direct and instant connection with leadership. Using live chat, streamlined desking, and real-time status updates, consultants can do everything without leaving the client’s side while keeping management informed. 

At the end of the deal clients want to feel like they’ve seen and understood everything clearly. When digital retail provides a transparent experience from browsing, to trade-in, to financing, and beyond, clients can walk away with more confidence, trust, and satisfaction. And dealers benefit with more appointments, faster sales, higher PVRs, and lifts in profits. 

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