Federal Trade Commission (FTC) has proposed comprehensive rules changes regarding dealership advertising and how finance and insurance offices are handled. However, dealers, specifically the National Automobile Dealers Association (NADA), aren’t happy with these new ideas and have issued formal challenges to the regulatory scheme.
We would wager our combined annual salaries – a sum roughly equal to the value of a half dozen donuts from Krispy Kreme – that every single soul reading this website has a story or three about being blitzed with products in a dealer’s F&I office. Vehicle etching, useless warranties (sorry – this paper only covers mechanical fuel pumps), and p-packs up the wazoo are the bane of most shoppers’ existence when trying to buy a car.
Make no wonder some people call it the “Effin’ Eye” office.
This environment may change if the Federal Trade Commission gets its way. According to a report by Automotive News, a new proposal by the FTC would ban finance/insurance coverage and physical vehicle add-ons “that provide no benefit” while also requiring expanded disclosure on such items.
Visiting a dealer’s Finance and Insurance office is usually the last excruciating step when buying a car. The F&I rep will go through an endless stack of documents to finalize the sale while attempting to sell as many pointless add-ons as possible.
Many of us know to avoid add-ons like pin striping, paint protection, and extended warranties since they are either overpriced or valueless — but we may be letting the worst offender of all slip by.
Car alarms seem like sensible choices, especially if they’re offered at a good price, but the alarm that many buy in the F&I office can barely be considered more than a dealer profit device. These alarms are often presented as add-ons to the factory alarm that are supposed to improve on the factory security system, but in reality are usually nothing more than a shock sensor and some hacked wires.
Spending hours or days negotiating for a vehicle can be a taxing experience, so reaching an agreeable price feels like a big accomplishment for car shoppers. It seems reasonable to let your guard down and relax as you enter the F&I office to finish up the paperwork, but that can lead to a big mistake.
The finance manager or clerk will start going over the paperwork, representing the car as sold and financed while showing you a specific rate. You skim through the mountain of paperwork and quickly sign all of the forms so you can drive off in your new car.
At this point, most people are brimming with excitement — they show off the car to their friends and family and share pictures on social media — but that jubilation can quickly be deflated with a call from the dealer telling you that the financing has fallen through and you don’t own the car after all. (Read More…)
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