Full Steam Ahead: FTC Declines To Extend Public Comment Period For New Car Dealer Rule

The Federal Trade Commission (FTC) on August 23, 2022 announced that it has decided by a vote of 5-0 to decline requests to extend the public comment period for proposed rules for dealers in connection with the advertising and sale of new cars. The FTC’s decision leaves in place the September 12, 2022 deadline to submit public comments concerning a sweeping set of proposed regulations that would impose significant limits on how new car dealers advertise to bring customers into dealerships, and also require dealers to make substantial disclosures about pricing at the outset of negotiations with consumers.

In declining to extend the 60-day public comment period, the FTC acknowledged requests by a number of trade associations representing new car dealers—including the National Automobile Dealers Association (NADA), the American International Automobile Dealers Association (AIADA), the National Independent Automobile Dealers Association (NIADA), and the National Association of Minority Automobile Dealers (NAMAD)—seeking an extension of the public comment period by at least 120 days. The FTC also acknowledged equally vociferous opposition to an extension of the public comment period, including a letter submitted by eight consumer advocacy groups led by the National Consumer Law Center and the National Association of Consumer Advocates.

In its request for an extension, NADA complained that “[w]hile it is extraordinary that this effort to collect such widespread and extensive market information was not initiated prior to the promulgation of a proposed rule, stakeholders now find themselves with a very limited window of time to attempt to provide the Commission with accurate and meaningful responses” to “an extremely broad and open-ended set of 49 questions” posed by the FTC in its request for comment. NADA has already announced its opposition, declaring that the rules if adopted “will cause great harm to consumers by increasing prices, extending transaction times, and making the customer experience much more complex and inefficient.”

Sen. Elizabeth Warren and Rep. Katie Porter submitted a comment urging the FTC to act quickly to adopt the proposed rules, noting that abuses by new car dealers “have become even more acute over the past year, as ongoing supply chain shocks empowered dealers to ‘routinely’ charge thousands of dollars more than the advertised prices.” These comments are among the more than 2,400 public comments that have been submitted to the FTC, many of which complain about dealers charging retail prices far in excess of the Manufacturer’s Suggested Retail Price (MSRP) during a time of constrained supply. Given the FTC’s latest decision, dealers and their trade associations will need to move quickly to respond to arguments in favor of these rules advanced by the FTC, lawmakers, and consumer advocates.