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The Federal Trade Commission (FTC) created a rule last year to help consumers against unfair practices and fees. Known as the Combating Auto Retail Scams (CARS), this was supposed to take effect on July 30th, 2024. Now, lobbyists were able to get this paused indefinitely. This new development of CARS was fought by the National Automotive Dealers Association (NADA) and the Texas Automobile Dealers Association. They filed a petition with the Fifth Circuit Court of Appeals and challenged the law. The Court agreed with NADA and the Texas Automobile Association to stop CARS from happening. One of the biggest issues with this legal battle concerns if the FTC has the jurisdiction to impose this. Both dealership groups called the rule "an abuse of discretion" which they used in court to stop the rule from being implemented. The FTC agrees, saying the rule "does not impose substantial costs, if any" for non-shady dealerships. They guarantee a more even playing field for consumers and dealerships by eliminating hidden costs and junk fees. If the courts decide to rule for the FTC, the FTC thinks the CARS rule will be delayed by a few months. This means CARS could be enacted before 2025. Even with the FTC fighting and possibly winning this, dealerships have pressured Congress to make laws removing the FTC from regulating car sales. If a dealership breaks the rules, they would have a violation of $50,120. View full article -
The Federal Trade Commission (FTC) created a rule last year to help consumers against unfair practices and fees. Known as the Combating Auto Retail Scams (CARS), this was supposed to take effect on July 30th, 2024. Now, lobbyists were able to get this paused indefinitely. This new development of CARS was fought by the National Automotive Dealers Association (NADA) and the Texas Automobile Dealers Association. They filed a petition with the Fifth Circuit Court of Appeals and challenged the law. The Court agreed with NADA and the Texas Automobile Association to stop CARS from happening. One of the biggest issues with this legal battle concerns if the FTC has the jurisdiction to impose this. Both dealership groups called the rule "an abuse of discretion" which they used in court to stop the rule from being implemented. The FTC agrees, saying the rule "does not impose substantial costs, if any" for non-shady dealerships. They guarantee a more even playing field for consumers and dealerships by eliminating hidden costs and junk fees. If the courts decide to rule for the FTC, the FTC thinks the CARS rule will be delayed by a few months. This means CARS could be enacted before 2025. Even with the FTC fighting and possibly winning this, dealerships have pressured Congress to make laws removing the FTC from regulating car sales. If a dealership breaks the rules, they would have a violation of $50,120. -
This year will likely go down as the one with the most recalls for automobiles. From ignition switches that can easily turn to the accessory or off position, to peeling safety labels, automakers in the U.S. have recalled almost 60 million vehicles. With the high number of vehicles being recalled, people are calling for the recall system to be fixed. But no one can agree on how to fix it. "A recall's a recall, and that's a problem. There needs to be a sophistication of how serious is the recall? And that has to be really clear to a customer. I think the industry is beginning to do that," said Mark Reuss, GM's head of global product development at the LA Auto Show last month. The issue at hand is defining a severity level for a recall. At the moment, there is really no difference between a recall for a missing sticker or a slipping ignition switch. Now the industry has began to solve this problem by categorizing recalls as "safety" or "noncompliance". But they still fall under the recall umbrella which means an automaker has to send a notice out. The problem with this is that some car owners either mistake it for junk mail or pay no attention to it. According to the National Highway Traffic Safety Administration (NHTSA) the, average recall completion rate in the U.S. is about 75 percent each year. But for older vehicles, the number drops. The worry is that with the number of recalls that have been happening this past year could cause less people to get their cars fixed. "Whether it's an ignition cylinder or a sticker on a door, a recall is a recall. I do worry that that fatigue sets in and consumers may not act as quickly as they should on big safety issues," said Toyota North America CEO Jim Lentz. The idea has been floated around of classifying recalls by severity. But the idea was shot down by former head of NHTSA David Stickland last year. "There is one standard for safety that the National Highway Traffic Safety Administration follows and enforces. We deal with unreasonable risk to safety. We don't gradate them. If there is a judgment that it is an unreasonable risk, it's an unreasonable risk and it needs to be repaired. The notion that there should be some gradation of unreasonable risk is frankly counter to the policy for safety, and frankly, dangerous," Strickland said to a Senate panel last year. Another idea that has been floating around is withholding vehicle registrations until outstanding recalls are fixed. "It clearly is the most effective way to go," said Clarence Ditlow, executive director of the advocacy group Center for Auto Safety. Ditlow goes onto say that this method is used in Germany and it achieves 100 percent in recall fixes. The problem with this idea is that each state controls vehicle registration. That puts the burden of responsibility on the state and not the national government. There's also the problems of tracking the fixes and delays in parts availability. Source: The Detroit News -
This year will likely go down as the one with the most recalls for automobiles. From ignition switches that can easily turn to the accessory or off position, to peeling safety labels, automakers in the U.S. have recalled almost 60 million vehicles. With the high number of vehicles being recalled, people are calling for the recall system to be fixed. But no one can agree on how to fix it. "A recall's a recall, and that's a problem. There needs to be a sophistication of how serious is the recall? And that has to be really clear to a customer. I think the industry is beginning to do that," said Mark Reuss, GM's head of global product development at the LA Auto Show last month. The issue at hand is defining a severity level for a recall. At the moment, there is really no difference between a recall for a missing sticker or a slipping ignition switch. Now the industry has began to solve this problem by categorizing recalls as "safety" or "noncompliance". But they still fall under the recall umbrella which means an automaker has to send a notice out. The problem with this is that some car owners either mistake it for junk mail or pay no attention to it. According to the National Highway Traffic Safety Administration (NHTSA) the, average recall completion rate in the U.S. is about 75 percent each year. But for older vehicles, the number drops. The worry is that with the number of recalls that have been happening this past year could cause less people to get their cars fixed. "Whether it's an ignition cylinder or a sticker on a door, a recall is a recall. I do worry that that fatigue sets in and consumers may not act as quickly as they should on big safety issues," said Toyota North America CEO Jim Lentz. The idea has been floated around of classifying recalls by severity. But the idea was shot down by former head of NHTSA David Stickland last year. "There is one standard for safety that the National Highway Traffic Safety Administration follows and enforces. We deal with unreasonable risk to safety. We don't gradate them. If there is a judgment that it is an unreasonable risk, it's an unreasonable risk and it needs to be repaired. The notion that there should be some gradation of unreasonable risk is frankly counter to the policy for safety, and frankly, dangerous," Strickland said to a Senate panel last year. Another idea that has been floating around is withholding vehicle registrations until outstanding recalls are fixed. "It clearly is the most effective way to go," said Clarence Ditlow, executive director of the advocacy group Center for Auto Safety. Ditlow goes onto say that this method is used in Germany and it achieves 100 percent in recall fixes. The problem with this idea is that each state controls vehicle registration. That puts the burden of responsibility on the state and not the national government. There's also the problems of tracking the fixes and delays in parts availability. Source: The Detroit News View full article
