The Rule is comprehensive and will fundamentally change the way dealers do business. “ Total Lease or Finance Payments and Comparisons A purported common practice that the FTC aims to curtail is dealers emphasizing a low monthly payment while diverting a consumer’s attention away from the overall cost of financing or leasing the vehicle. Therefore, anytime you advertise or mention a monthly lease or finance payment, you must also identify the total amount the consumer will pay to lease or purchase the vehicle at that monthly payment after making all payments as scheduled. Comparing Monthly Payments Many of the complaints the FTC received were about dealers lowering monthly payments without telling consumers that the length of the loan is extended, thus making the purchase or lease of a vehicle more expensive over the life of the payments. Now, anytime you compare two monthly payments (such as via a desking tool’s proposal sheet or payment quote), you must include a clear and conspicuous disclosure that the lower monthly payment will increase the total amount the consumer will pay to purchase or lease the vehicle. OTHER PROHIBITED ACTIVITIES Add-Ons That Provide No Benefit You cannot charge a consumer for an addon that provides no benefit to the consumer. The FTC provides some examples: 1. Nitrogen-filled tire-related products or services that contain no more nitrogen than naturally exists in the air; 2. Sale of service contracts that are duplicative of manufacturer warranties; 3. Supposed rust-proofing add-ons that do not actually prevent rust; 4. Add-ons that the vehicle itself cannot support (like engine oil-change services on an electric vehicle); 5. Software or audio subscription services that the vehicle cannot support or use; and 6. GAP agreements on vehicles with a low LTV. Charging a Consumer Without Consent You cannot charge a consumer for any item unless you obtain the consumer’s “express, informed consent” to be charged for that item. The FTC defines “express, informed consent” as “an affirmative act [that communicates] unambiguous assent to be charged, made after receiving and in close proximity to a Clear and Conspicuous disclosure, in writing … of the following: 1. What the charge is for; and 2. The amount of the charge, including if the charge is for a product or service, all fees and costs to be charged to the consumer over the period of repayment with and without the product or service.” 18
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