NJ CAR and NADA recently submitted comments opposing the Federal Trade Commission’s (“FTC”) proposed Motor Vehicle Dealer’s Trade Regulation Rule (“proposed rule”). NJ CAR joined with NADA and scores of other dealer advocacy groups in mounting a comprehensive and detailed response to the proposal, which will defend the highly competitive and pro-consumer benefits of the optional, dealer-assisted financing model, and show that, in fact, the FTC’s proposal is likely to harm consumers.
If approved, the proposed rule would dramatically transform, and complicate the process for consumers to purchase, trade-in, and finance new and used cars and trucks, and optional products like extended service contracts and GAP Waiver. The proposed rule would also massively expand the liability exposure for dealers related to advertising and vehicle sales and expose dealers to large monetary fines from the FTC that are not available today.
In June, NJ CAR notified dealers of the proposed rule and outlined a summary of the regulation. In our comments, NJ CAR highlighted that the proposed rule will lengthen the car buying process for consumers by adding unnecessary forms and complicate the process by adding layers of compliance to existing regulations in New Jersey.
Our comments drew attention to the fact that the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 et seq., is one of the strongest and most effective consumer protection laws in the United States. Its resulting regulations promulgated by the Division of Consumer Affairs, N.J.A.C. 13:45A-1.1 et seq., contains many of the prohibitions that the proposed rule is aimed at combating and includes:
- J.A.C. 13:45A-26A.4. Bait and Switch
- J.A.C. 13:45A-26A.5. Advertisements; mandatory disclosure requirements in all advertisements for sale
- J.A.C. 13:45A-26A.6. Advertisements: mandatory disclosure in advertisements for lease of a new or used motor vehicle
- J.A.C. 13:45A-26A.7. Unlawful advertising practices
- J.A.C. 13:45A-26A.8. Certain credit and installment sale advertisements
- J.A.C. 13:45A-26A.9. On-site disclosures
- J.A.C. 13:45A-26A.10. Record of transactions
These and other laws and regulations places New Jersey at the forefront of consumer protection, which is why it is unnecessary to add complicated, duplicative, and burdensome layers of compliance that will only serve to confuse consumers and lengthen the car buying process. NJ CAR will continue to monitor the FTC’s actions regarding the new rule and continue to oppose it.
A full text of the rule may be found here: https://www.ftc.gov/legal-library/browse/federal-register-notices/16-cfr-part-463-motor-vehicle-dealers-trade-regulation-rule-nprm
If Dealers have questions about this topic or any other questions, they can contact Greyson P. Hannigan, NJ CAR’s Director of Legal & Regulatory Affairs at (609) 883-5056 – ext. 340 or via email at email@example.com.