With the Federal Trade Commission’s (FTC) Combating Auto Retail Scams (CARS) Rule slated to go into effect this year, a recent poll showed over a third of Americans have experienced the practice the law is looking to combat.

KPA, a leading provider of compliance solutions for over 15,000 U.S. automotive dealerships, announced the results of its 2024 KPA Dealership Trust Survey conducted by The Harris Poll on Feb. 22.

And while a minority of Americans have experienced things like deceptive selling, hidden fees, or dishonest salespeople, 76% don’t trust dealerships to be honest about pricing.

Survey Findings

Among the results about their own relationships with dealerships:

• 34% have felt pressured to purchase ‘add-ons;’
• 30% agreed on the price and when they went to sign the paperwork found there were hidden fees;
• 28% felt like the salesperson was trying to ”trick” them into a deal; and
• 29% left one dealership and went to another because they didn’t think they were being honest in their pricing.

The issue for car buyers and dealers has been pushed forward over the past year as the FTC enacted additional rules for dealerships around pricing transparency, financing, unnecessary add-ons, and keeping customer information secure.

Dealerships that don’t follow these laws and regulations can face heavy fines from the FTC at over $50,000 per violation, which is roughly equal to the cost of an average car ($48,000) on the sales lot.

Opinion of Dealers

But the bigger issue for dealers is how they as a group are perceived about over three quarters of Americans. In responding to the online poll conduct between January 16-18, among 2,098 adults, 86% responded they concerned about hidden fees when buying/leasing a vehicle, 76% don’t trust car dealerships to be honest about pricing and 84% say price transparency is lacking at most car dealerships.

As KPA CEO Chris Fanning notes, Buying or leasing a vehicle is a major financial decision for many Americans.”

To that end, KPA recommends four practices for car dealerships to build trust and are compliant: create a dedicated compliance team; establish key performance indicators (KPIs); make sure to review programs, plans, and policies to identify gaps, including new CARS compliance ones; and conduct training and certification.