FTC to look at car financing

The Federal Trade Commission (FTC) has given notice that it plans a major study on car buying and financing, and is seeking to interview buyers about their dealership experience in selecting, purchasing and financing their vehicle, including taking a look at their purchase and finance documents.

Explaining its decision to launch the review, the FTC said: “Cars are one of the biggest purchases a consumer will ever make. Researching models and options is only part of the process. Prospective buyers also have to consider price negotiations, trade-in, and financing. Since 2011, the FTC has brought more than 25 cases challenging illegal practices in this area.”

To learn more about what consumers understand about the purchasing and financing process at the dealership, the FTC plans to conduct a survey of people who recently bought an automobile and financed it through a dealer.

The survey would involve consumer interviews on topics like: How did price negotiations go? How about the trade-in process? How did the financing go? Did the dealer offer additional products or services? Has the dealer been in touch since the consumer drove off the lot?

The FTC also plans to review the consumers’ purchase and financing documents during the interview, and explore the consumers’ understanding of them.

Before undertaking its research, the FTC is asking for public comment, which includes the views of dealers and auto finance companies, which it is required to do under US law and which will be used as feedback on its proposed questions. The study is likely to take place in the second quarter of 2016.