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January 5, 2024

By: Thomas S. Vangel and James F. Radke

Last month, litigation partners Tom Vangel and Jamie Radke co-authored an article for Massachusetts Auto Dealer on new developments in the automotive industry that may pose challenges for automotive dealerships in the year ahead.

In the first part of the article, Tom and Jamie discuss a recent partnership between Amazon and Hyundai, which will allow Hyundai to sell new inventory on Amazon's sales platform while allowing customers to finance and pay for the cars "within the Amazon experience." The program will begin testing this month, evoking concerns that the arrangement will greatly lessen or eliminate contact between the dealer and the customer.

The second half of the article discusses proposed and enacted regulations that would affect dealerships throughout Massachusetts. A proposed regulation announced by Attorney General Andrea Joy Campbell in November would require businesses across various industries to clearly disclose the total price of goods, services, and programs (all defined as “Products”) when the price is first presented to consumers and to provide clear information concerning associated fees. The Attorney General's office will be holding public hearings and taking comments concerning the proposed regulations as the implementation process moves forward.

Recently enacted on December 12th, the Federal Trade Commission's (FTC) Vehicle Shopping Rule, now pejoratively renamed the Combating Auto Retail Scams (CARS) Rule, targets junk fees and bait-and switch tactics and attempts to provide more transparency in the car buying and leasing process. The CARS Rule also adds certain protections for military service members and seniors, who the FTC says have been targeted with unnecessary add-on products. The FTC commissioners unanimously passed the CARS Rule, and it will take effect on July 30, 2024.

In the meantime, Tom and Jamie recommend that dealerships foster a transparent sales process and begin preparing for these changes so they are ready to hit the ground running when the CARS Rule goes into effect and if the Attorney General's regulations are passed. 

Read the full article.

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