The 10-Second Version (AI Summary)
What happened: Most dealers now advertise all-in prices that meet the FTC's demands, but stragglers remain.
Why it matters: A level playing field changes who wins on price, and 48% of dealers say it has hurt their gross.
What to do: Check every advertised price for every mandatory fee, and hold gross through value instead of fine print.
AI-generated and reviewed by the ASOTU team.
Why are we still talking about advertised pricing?
On today's episode of the Automotive State of the Union, Kyle didn't mince words. CarEdge's Zach Shefska keeps finding dealers with misleading ads to post about, and that shouldn't still be happening.
"If you're doing this stuff, quit it. ... We owe the consumers, we owe the public, we owe ourselves a better way of doing business."
Kyle Mountsier
Paul pointed to a newer pressure: consumer AI tools. He's seen an AI voice bot pull out-the-door pricing on eight cars in one go. Few shoppers use tools like that yet, but when a bot asks every store the same question, a price that doesn't hold up gets caught fast.
Most dealers are now advertising prices the FTC's way.
In March, the FTC sent letters to 97 dealer groups. Automotive News reports that most of the industry has since come into line. Advertised prices must include every mandatory charge, like doc fees, with only government taxes and fees left out. They also can't depend on dealer financing, a down payment, or rebates not everyone qualifies for.
How much has changed since April?
Before April 1: most of the roughly 50 dealers in a Stephens survey said the majority of their competitors were violating the rules.
By September: 70% said at least 61% of their competitors were compliant.
The cost: 48% said the shift hurt their gross, and 28% said it cut their leads.
CarMax, Carvana, and AutoNation all say a level playing field works in their favor. Sonic's new-vehicle gross per unit rose from Q2 to Q3 while most public peers declined. President Jeff Dyke credited a "mindset change" call with sales managers about refusing to give cars away.
Enforcement has been light so far. The FTC's settlements with Greenway Automotive and Stream Auto Outlet carried no restitution or financial penalty, and Dyke says it will take "some hand slapping" before margins level out.
Our take: Transparent pricing is the baseline now. The stores holding gross are winning on value, not on what they leave out of the ad.
What else did Paul and Kyle say about the FTC?
Watch the full conversation above, including Kyle's case for a level playing field and Paul on what AI pricing bots could mean for your ads. New episodes of the Automotive State of the Union drop every weekday.
