Americans expect the worst from car dealerships. Sometimes, they get the worst. But more car shoppers anticipate problems than actually have them, according to a new survey.
The survey should be taken with a grain of salt because of who funded it. KPA is a company selling software that helps keep car dealerships compliant with laws and regulations. However, KPA hired the reputable polling firm Harris to conduct the study.
Harris polled more than 2,000 car shoppers to ask about their experiences with dealers.
More Feared Hidden Fees Than Saw Them
They found that more than three-quarters (76%) “don’t trust dealerships to be honest about pricing.” Even more – 86% – were concerned that dealers would add “hidden fees” to the purchase. Another 84% felt that dealers lack transparency with customers.
In practice, though, just 30% had found hidden fees after agreeing to a price on their most recent purchase. Just over a third – 34% – felt pressured to buy add-ons like supplemental warranties or paint protection plans.
Twenty-eight percent felt that a car salesman tried to trick them, and 29% left a dealership and purchased from another because of it.
Dealerships have an image problem. But they’re better than their public reputation would have led you to believe. The numbers suggest that a minority of dealerships are responsible for giving the industry a black eye.
The federal government has a plan to deal with that, but it’s on hold.
Government Rules, Now On Hold, Would Punish Junk Fees
Last year, the Federal Trade Commission proposed a new rule that would ban hidden fees and require dealerships to honor advertised prices. It was scheduled to take effect this July. The rule included hefty fines that might be enough to stop many questionable sales tactics.
But the agency has paused the rule pending the outcome of a lawsuit filed by – you guessed it – dealerships.
The ban could still hit this summer, depending on how quickly the court moves. If it does, the industry’s public reputation could gradually improve as hidden fees and useless add-ons disappear. Or the dealerships that are doing things right (which might even be the majority, according to the poll’s numbers) could pressure the ones spoiling the pot to clean up their act.
The FTC, however, has a backup plan. The rules currently on hold would apply specifically to car dealerships. A second set currently making its way through the bureaucratic process would ban surprise fees everywhere, from concert ticket sales to hotel room rentals.
That rule would apply to car dealers, too, unless the first set of rules is enacted. It’s less specific and includes lighter penalties, but could still limit some junk fees in car sales.
