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Attorney General Bonta Expresses Support for FTC Proposal to Establish Nationwide Protections for Car Buyers

OAKLAND – California Attorney General Rob Bonta today expressed his support for Federal Trade Commission (FTC) rulemaking that would establish a number of new protections for car buyers nationwide. For many Americans, a car is a necessity for work, school, child care, groceries, medical visits, and other important daily tasks. It is also one of the most expensive purchases many Americans will make, second only to a house. In a letter filed today, Attorney General Bonta joins 17 state attorneys general in applauding the FTC’s efforts to enact national rules protecting consumers during the sale, financing, and leasing of new vehicles. Although California law already provides some of these protections, the FTC rules would have a national effect while still allowing states to impose stricter protections.

“Buying or leasing a car is one of the biggest and most important purchases many Californians will make,” said Attorney General Bonta. “Unfortunately, car dealers too often fail to honor the advertised price, tack on unnecessary add-on products, or engage in other deceptive practices. Earlier this year, I sponsored legislation to strengthen protections for car buyers here in California, and I welcome the FTC's efforts to establish a national baseline of protections for consumers looking to buy, lease, or finance a new vehicle.”

In the letter, the coalition expresses their whole-hearted support for the FTC’s rulemaking, which would enact the following important consumer protections on a nationwide level:

  • Prohibit car dealers from making certain misrepresentations when selling, leasing, or arranging financing for vehicles;
  • Require accurate pricing disclosures in dealers’ advertising and sales discussions;
  • Require dealers to obtain consumers’ express, informed consent for charges;
  • Prohibit the sale of any add-on product or service that does not benefit the consumer; and
  • Require dealers to keep records of advertisements and customer transactions.

The coalition also offers the FTC the following suggestions to strengthen its rulemaking to better protect consumers:

  • Explicitly prohibit bait-and-switch tactics used by dealers to raise the price at the point of sale;
  • Build on the disclosure requirements by requiring that dealers disclose the “offering price” in writing in all circumstances and include anticipated government charges;
  • Clarify that dealers must clearly disclose any mandatory add-ons and whether those add-ons are required in order to obtain offered financing; and
  • Extend the recordkeeping period to at least the length of the leasing or financing contract.

Attorney General Bonta is committed to expanding and enforcing protections for low-income car buyers. Earlier this year, the Attorney General sponsored legislation to address the sale and administration of guaranteed asset protection (GAP) waivers, a costly add-on product of little value to consumers that is often sold by car dealers along with auto loans. Attorney General Bonta is also involved in litigation against Paul Blanco’s Good Car Company, a network of motor vehicle dealerships, relating to allegations that the company engaged in a variety of unlawful business practices while targeting vulnerable predominantly low-income consumers with subprime credit. 

In filing today's comments, Attorney General Bonta joins the attorneys general of Illinois, Iowa, Maryland, Massachusetts, Pennsylvania, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island and Washington.

A copy of the letter is available here.