It’s been about six weeks since the Federal Trade Commission said that it was sending letters to 97 auto groups nationwide, warning them that the prices they advertise must be the total price — including all mandatory fees — that consumers will be required to pay.

Despite multiple informational webinars hosted by the National Automobile Dealers Association and the National Independent Automobile Dealers Association, dealers still appear to be seeking clarity about how they should proceed. That’s based on the assessments from four legal experts contacted this week by Cherokee Media Group.

Patty Covington and Eric Johnson are partners at Hudson Cook and have a wide array of dealers in their client portfolios.

“The letters definitely caught the attention of most dealers,” Covington said. “I wouldn’t say either in a positive or negative way, but more of ‘you’ve got our attention, now what?’ Dealers want to know in a definitive way, ‘What are the rules? What exactly does the FTC want to be included in the advertised price?’

“Most dealers want to comply, and they also want all other dealers to comply,” using the same rules so that they are not at a competitive disadvantage,” Covington continued.

“I definitely agree that the FTC’s warning letters caught the attention of most dealers,” Johnson added. “If it’s true that the recent NADA/FTC webinar had over 4,000 attendees, then franchise dealers are interested in and paying attention to what the FTC has to say about dealer pricing.

“I wouldn’t say that the warning letters have created positive or negative attention. Dealers are interested in hearing what the FTC has to say about pricing and doing it right.  And most dealers want all dealers to be playing on the same even playing field when it comes to pricing,” Johnson went on to say.

Chris Capurso, who is counsel at Troutman Pepper Locke, offered similar observations about how dealers currently see the situation.

“From what we’re hearing, the letters are definitely making waves,” Capurso said. “Dealers did not necessarily expect this version of the FTC to embrace a stated price rule that is so similar to the CARS Rule that regulators abandoned at the beginning of 2025.

“For the letters specifically, many dealers have expressed frustration with the agency due to the ambiguity of some points in the letters,” he continued. “The FTC’s overall message, though, is clear: unlike the CFPB, the FTC does appear to be open for business and is obviously looking at the auto industry.

“Of course, the FTC is looking at pricing across the marketplace generally (see, for example, the ticketing pricing focus), but auto is clearly in the FTC’s view,” Capurso went on to say.

A quick search of social media posts after the webinars illustrated various forms of frustration from dealers, ranging from mosquito-level annoyance to near red-faced anger. Capurso started the dialogue with Cherokee Media Group by sharing why it’s been difficult so far for dealers to get clarity about what the FTC wants in connection with advertising and pricing.

“That has been interesting,” Capurso said. “Many in the industry were cheering a break from the high-activity days of the prior administration, yet the standards espoused by this version of the FTC do not seem materially different from its predecessor. Those in the industry are critical of employing UDAP authority based on a ‘you know it when you see it’ standard. However, it certainly seems the current iteration of the FTC believes that what it said in the letters and the enforcement actions referenced.”

Both Covington and Johnson leaned into their experiences involving matters connected with the FTC to decipher what might now be happening.

“Historically the FTC has not wanted to give guidance outside of their structured channels, which include publishing FAQs and formal guidelines,” Covington said. “They see themselves like an enforcer and not necessarily a rule maker because they have limited rulemaking authority.

“So, in an informal setting, they’ve historically hesitated to tell folks exactly what to do to comply with the FTC Act. Also, advertising can be very fact specific. That gives them some pause and angst because they want all scenarios to be covered,” she continued.

“I agree with Patty wholeheartedly here,” Johnson added. “To date, we’ve only seen ‘guidance’ from the FTC on advertising and dealer pricing in the form of enforcement actions against dealers and others.  The warning letters made it clear that this administration’s FTC is going to be more of an enforcer than out there to make more rules like the CARS Rule or provide guidance.

“However, thanks to industry association pressure, it appears the FTC will be issuing some FAQs and guidance on their expectations,” Johnson went on to say.

Well, we’ve focused on dealerships so far in this report. What about finance companies? How concerned should they be about this entire matter since the vehicle price certainly is connected to the credit they provide?

Troutman Pepper Locke partner Brooke Conkle first addressed how the Holder Rule might be tied into these developments and what auto finance companies should be considering in the wake of the letters and webinars.

“While the Holder Rule is not going to come into play for the FTC’s purposes, this price disclosure focus is another reminder that states impose their own price advertising requirements that may bar similar advertising practices that the FTC is focused on, and those violations of state law could carry Holder Rule risk if they include a private right of action,” Conkle said.

“With the threat of attorneys’ fees, it is ever more important for auto finance companies to monitor their dealer partners and make sure their dealer agreements take into consideration the evolving regulatory landscape,” she continued.

Covington and Johnson touched on the connection to finance companies, too, since both work with credit providers often, as well. In fact, Johnson also is part of the executive committee for the National Automotive Finance Association, which will host its 30th annual Non-Prime Auto Financing Conference on June 2-4 in Plano, Texas.

“At this point, I see this as a dealer issue,” Covington said. “Sure, the FTC could try to take an aggressive position with respect to the Holder Rule (Preservation of Claims and Defenses), but I don’t see them chasing finance companies under this administration. The FTC is focused on acts and practices that are clearly unfair or deceptive.”

Johnson said, “Auto finance companies should consider whether the dealers from whom they buy paper are complying with the warning letters and the FTC Act Section 5 (UDAPs).  If a dealer isn’t complying with the law, their noncompliance could come back on the auto finance company by way of the FTC’s Holder Rule (where a consumer could assert claims against the holder of the contract).

“Or, if the FTC were to enforce Section 5 against a dealer and obtain civil monetary penalties, depending on how many zeros were in the CMPs, it could have a really negative impact on the dealer’s ability to stay in business,” he added.