Servicemembers: Combating Auto Retail Scams

According to the FTC’s Consumer Sentinel, auto-related issues are in the top ten report categories for military consumers. Why would cars — or trucks or other vehicles — be such a problem for the military community? Servicemembers often need vehicles for transportation in and around military bases. They have a steady income, which is why they’re a particular target. And when younger personnel and those new to the service buy or lease a vehicle, their minimal credit history means they qualify for less advantageous credit terms.

If the dealer uses deceptive sales practices, there’s even more pressure and stress added to the experience. But the FTC has a new Rule that requires the car-buying process to be more transparent — with some special protections for the military community. Read on for what you need to know.

The FTC’s new Combating Auto Retail Scams (CARS) Rule, which takes effect July 30, 2024, requires accurate information and transparency during the vehicle-shopping process. For instance, a dealer must tell you the offering price. (That’s the all-in price for the vehicle, excluding only required government charges.) If the conversation turns to monthly payments, the dealer must tell you the total amount you’ll pay for the vehicle. The dealer also has to tell you if a lower monthly payment would increase the total amount you’ll pay. Another important protection is that a dealer can’t charge you for products or services that won’t benefit you, like a warranty that’s duplicative of a manufacturer’s warranty. To learn more about the rule, get the details.

For military personnel and their families, there are a few additional protections of special interest.

• Military affiliation. Some businesses try to gain your trust by stretching the truth about a military or government connection. Under the Rule, a dealer can’t misrepresent whether they are affiliated with, approved by, or endorsed by the military.
• Taking your car or truck with you. Servicemembers may frequently need to move and may not be able to take their new car to another state or country unless they have permission from the lender who financed the vehicle. The FTC’s new Rule says a dealer can’t misrepresent whether you’d be allowed to move the vehicle across state lines or out of the country.
• Repossession. The Servicemembers Civil Relief Act creates an extra layer of protections when it comes to repossession. Under the new Rule, a dealer cannot misrepresent those protection.